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The Litigation Funding Agreement is essential in situations where a party requires financial support to pursue legal claims in South Africa. This document has gained increasing importance as South African courts have progressively recognized and accepted third-party litigation funding arrangements, particularly following landmark cases that have shaped the legal framework. The agreement is structured to comply with South African legal requirements while protecting both the funder's investment and the funded party's interests. It typically includes detailed provisions on funding mechanics, success fee calculations, control over litigation strategy, and risk allocation. The document is particularly relevant in complex commercial litigation, class actions, or situations where claimants lack the financial resources to pursue legitimate claims. The agreement must carefully balance the funder's need for returns and control with the funded party's interests and autonomy in the litigation process, while ensuring compliance with South African legal principles and regulatory requirements.

1. Parties: Identification of the Funder and the Funded Party, including full legal names and registration/identification details

2. Background: Context of the funding arrangement, brief description of the underlying dispute, and purpose of the agreement

3. Definitions and Interpretation: Definitions of key terms including 'Claim', 'Funding', 'Success Fee', 'Proceeds', and interpretation rules

4. The Funded Proceedings: Detailed description of the legal proceedings being funded, including case reference numbers if available

5. Funding Commitment: Specifics of the funding to be provided, including amount, drawdown conditions, and payment mechanics

6. Success Fee and Return Calculations: Formula for calculating the funder's return and success fee, including scenarios for different outcome levels

7. Conditions Precedent: Conditions that must be satisfied before the funding obligation becomes effective

8. Representations and Warranties: Standard and specific warranties from both parties regarding capacity, information provided, and litigation prospects

9. Funded Party's Obligations: Ongoing obligations including information provision, cooperation, and conduct of litigation

10. Control and Conduct of Litigation: Decision-making rights and consultation requirements regarding the litigation

11. Settlement: Process for settlement decisions and allocation of settlement proceeds

12. Termination: Termination events, process, and consequences

13. Confidentiality: Confidentiality obligations regarding the agreement and funded proceedings

14. Dispute Resolution: Process for resolving disputes between the parties to the funding agreement

15. General Provisions: Standard boilerplate clauses including notices, amendments, assignment, and governing law