Third-party litigation funder
A company that funds litigation in exchange for a financial return from the outcome. In family law, they are not currently regulated in the same way as consumer credit lenders — which means fewer consumer protections apply to you.
Compound interest
Interest calculated not just on the original loan amount, but on the accumulated interest as well. This means debt grows faster the longer it runs. A £20,000 loan at 18% compound annual interest over 3 years does not cost £20,000 — it can cost over £31,000 before any other fees are added.
Litigation funding / Litigation loan
Money provided by a third-party company (not a bank or the government) to pay the legal costs of a court case. In divorce, it is repaid — with interest — from the final settlement. Unlike a standard loan, the funder often takes their repayment before you receive any settlement money.