Legal Funding Journal is dedicated to informing and engaging the global legal funding community through daily news, insight, analysis and original content.

The Michigan House of Representatives has approved House Bill 5281, a Republican-sponsored measure that would impose registration, disclosure, and contracting restrictions on third-party litigation funders operating in the state, advancing the bill to a Senate where Democrats hold a narrow majority.

As reported by The Center Square, the bill cleared the chamber on a 60–45 vote, with four Democrats joining Republicans in support: Tulio Liberati, Peter Herzberg, Angela Witwer, and Will Snyder. Sponsor Rep. Mike Harris framed the legislation in floor remarks by asking, "Who does it benefit to allow outside investors to influence decisions in Michigan courtrooms?"

The bill requires litigation funders to register with the Department of Insurance and Financial Services, pay a $10,000 application fee, and file annual reports on funding activity. It mandates a ten-day consumer cancellation window for funded contracts, prohibits kickbacks and referral fees, prohibits funder influence on case strategy, bans funding by foreign adversaries, and imposes caps on funder spending and recoveries from awards.

Backers cited industry analyses suggesting third-party litigation funding raises household costs through higher prices and lost tax revenue. The measure now heads to a Senate where Democrats hold an 20–18 majority and where the bill's path is uncertain. The House passage adds Michigan to the list of states considered most active on third-party funding regulation, alongside parallel efforts under way in Colorado, Florida, and Pennsylvania.

The UK Financial Conduct Authority has set the terms of reference for a market study into claims management services, with third-party litigation funding squarely within scope. The review is the first time the regulator has formally examined whether funding structures behind claims firms are driving consumer harm.

As reported by Pinsent Masons, the FCA will explore how "various funding structures," including private equity, private credit, and "third party litigation funding, including portfolio funding," shape claims management firms' operational strategies and growth incentives. The study will also examine how firms find and advertise to consumers, the quality of information provided, value for money, fee arrangements, and financial resilience.

Among the consumer detriments the regulator has flagged are unwanted communications, misleading advertising, unrealistic return promises, unfair cancellation fees, unauthorized sign-ups, and fraudulent signatures. A central inquiry, the FCA said, is whether "volume over outcomes" incentives are driving these harms. The study will also probe regulatory arbitrage between claims management companies, which fall under FCA oversight, and law firms, which are supervised by the Solicitors Regulation Authority.

Stakeholders have until June 19, 2026 to provide input, with a final report due May 18, 2027. The FCA will work with the SRA and other regulators throughout. The inclusion of portfolio litigation funding within scope marks a notable extension of UK regulatory attention from PACCAR-related questions into the broader economics of claims firms and their capital structures.

Senator Thom Tillis (R-N.C.) is again pressing for a federal tax on third-party litigation funding, this time as a revenue offset within the Senate's emerging reconciliation package built around immigration enforcement funding. The renewed push follows the parliamentarian's ruling last summer that struck a similar Tillis levy from the 2025 reconciliation bill under the Byrd Rule.

The vehicle for the tax is the Tackling Predatory Litigation Funding Act (S.1821), which would treat funder returns as ordinary income rather than capital gains and add a 3.8% surcharge, with prior versions of the proposal scored as raising approximately $3.5 billion over ten years. Tillis's office has framed the measure as a curb on what it describes as foreign and opaque capital influencing U.S. courts.

In a Washington Examiner op-ed, Regina Thomson, president of the Colorado Issues Coalition, criticized the proposal as one that would dry up funding "ordinary Americans" rely on to pursue claims against well-resourced corporate adversaries. She cited the financing of Gina Carano's suit against Disney, the litigation of baker Jack Phillips, and coach Joe Kennedy's free-exercise case as examples of funded claims with conservative resonance, arguing the proposal would, in effect, "give the Left a courtroom advantage."

The reemergence of the Tillis tax inside the reconciliation framework places the litigation finance industry once again at the center of a contested federal revenue debate, with funders, plaintiff-side advocates, and tort-reform groups likely to intensify lobbying in the coming weeks.

Anthropic has released Claude for Legal, an open, modular suite of AI plugins, skills, and scheduled agents built for legal practice, including a dedicated litigation module with direct relevance to how funded matters are assessed and monitored.

According to Anthropic's Claude for Legal repository, the system bundles ten practice-area plugins spanning commercial, corporate, employment, privacy, regulatory, IP, AI governance, and litigation work, deployable either as interactive plugins or as headless "managed agents" that run on a schedule. The litigation plugin handles matter intake and portfolio tracking, demand letters, deposition preparation, privilege log review, and claim charts for both patent and civil disputes.

Several components map onto core litigation finance workflows. A scheduled "docket watcher" monitors court filings and deadlines, corporate diligence tools produce tabular reviews with citation-per-cell sourcing, and connectors integrate court-data services such as CourtListener and Trellis alongside Westlaw research. For funders and their counsel, who bear the cost of underwriting and continuously monitoring portfolios of funded cases, such tooling speaks directly to the economics of case assessment.

Anthropic positions every output as "a draft for attorney review, not legal advice," with built-in guardrails for source attribution, privilege awareness, surfaced jurisdiction assumptions, and verification flags when citations are not confirmed through a research connector.

The release reflects the accelerating integration of AI into the litigation lifecycle, an efficiency vector litigation funders are watching closely as they work to lower diligence and monitoring costs across larger case portfolios.

Litigation funding has moved from a niche tool to an established component of dispute resolution across Europe, with Spain emerging as one of the continent's most active markets, according to RAMCO Litigation Funding chief executive Cristina Soler.

As reported by Leaders League, Soler said Spain's litigation finance market has expanded exponentially since 2017 and now ranks fourth in Europe, behind the United States, Australia, and the combined United Kingdom and Germany. She attributed much of the demand to competition-law damages claims, alongside growth in restructuring, insolvency, tax, and intellectual property matters. Construction, infrastructure, and energy disputes lead by frequency, and arbitration accounts for more than 55% of funded matters.

Soler framed funding primarily as an access-to-justice mechanism, enabling claimants without sufficient resources to pursue meritorious claims while drawing on funders' specialized expertise and professional networks—particularly valuable in complex competition enforcement. On regulation, she advocated a "proportionate and flexible" approach that distinguishes between consumer cases and business disputes, preserving freedom of contract while ensuring transparency and managing conflicts of interest.

Looking ahead, Soler pointed to portfolio-based financing and judgment monetization as evolving structures that broaden access to capital while mitigating funder risk. Her comments underscore the maturation of continental European markets at a moment when funders elsewhere face tightening disclosure rules and regulatory scrutiny, positioning Spain as a notable growth center within the broader European legal finance landscape.

The global litigation finance conference series LITFINCON will hold its first Asia-focused event on June 3–4, 2026 at Marina Bay Sands in Singapore, a signal of the sector's accelerating expansion into the Asia-Pacific region.

According to PR Newswire, LITFINCON Asia 2026, organized by Siltstone Capital, will convene senior institutional investors, law firms, litigation funders, insurers, and dispute resolution professionals across six panels. Programming will address Asia-Pacific legal finance trends, intellectual property as an asset class, international arbitration, insurance risk transfer, cross-border capital formation, and the secondary market.

Jim Batson, chief investment officer of legal finance at Siltstone Capital, will deliver opening remarks, with co-founder Robert Le speaking on capital allocation strategies. "The window in Asia is open right now," Batson said. "Singapore and Hong Kong have built the infrastructure. The deal flow is there." HOZU Capital is the diamond sponsor, with supporting partners including Deminor, Omni Bridgeway, and Bailey & Glasser LLP.

The event qualifies for 5.75 CPD credits, with registration available at litfinconasia.com. The launch follows LITFINCON's earlier European debut and reflects growing institutional interest in funded disputes across jurisdictions where Singapore and Hong Kong have established arbitration and funding frameworks. It underscores how litigation finance is consolidating as a global asset class with maturing infrastructure in major Asian dispute resolution hubs.

Consumer legal funder Legal-Bay has announced that it is actively providing pre-settlement funding to plaintiffs in the Depo-Provera product liability litigation, offering non-recourse advances as the coordinated proceedings move through early discovery.

According to PR Newswire, lawsuits involving Pfizer's injectable contraceptive Depo-Provera are in mid-stage litigation across U.S. courts, with plaintiffs alleging the product caused serious health complications including decreased bone density and meningioma brain tumors, as well as inadequate warnings about long-term risks. Cases are being organized through coordinated proceedings, with bellwether trials expected to shape future settlement values; no global settlement has been finalized.

Legal-Bay's funding is non-recourse, meaning plaintiffs repay advances only if they prevail or settle, with no repayment obligation absent a recovery. The funder said applications from lawyers and plaintiffs in active Depo-Provera matters are typically approved within 24 to 48 hours of receiving case documentation. "We are very active in this litigation and are a preferred funder to many of the top Depo Provera firms in the country," said Legal-Bay chief executive Chris Janish.

The announcement illustrates the continued role of consumer legal funding in large mass tort dockets, where plaintiffs often face extended timelines before resolution. It also reflects funders' practice of positioning early in emerging product liability litigation as bellwether outcomes begin to define potential settlement frameworks.

Nkosana Makate, the inventor of Vodacom's "Please Call Me" service, has asked the Pretoria High Court to set aside a 2011 funding agreement that entitles UK-based investor Errol Elsdon to 40% of the multimillion-rand settlement Makate is set to receive after a 17-year dispute with the telecommunications group. The challenge places the enforceability of third-party litigation funding contracts squarely before a South African court.

As reported by Sowetan, Makate entered into an arrangement under which Black Rock, a British Virgin Islands company associated with Elsdon, would fund all of his legal costs against Vodacom in exchange for a 40% share of any eventual recovery. Makate's legal team now argues that Black Rock "breached the contract from the start because it never had the money to fund the litigation," noting that the company was deregistered in 2014 after failing to file financial statements.

Makate further alleges that Elsdon and his associates made fraudulent misrepresentations about Black Rock's financial standing before the agreement was signed. Elsdon counters that his company advanced approximately R2.9 million toward Makate's legal fees before encountering cash-flow difficulties.

The case has not yet been heard. Its outcome could carry broader implications for how courts assess funder capacity, disclosure, and the proportionality of contingent returns in cross-border litigation funding agreements.

The UK Competition Appeal Tribunal (CAT) is applying markedly closer scrutiny to collective proceedings at the certification stage, a shift that practitioners describe as significant and that carries direct consequences for the litigation funders backing opt-out class actions.

As reported by The Law Society Gazette, the tribunal is increasingly testing the viability of claims early rather than deferring those questions to trial. In Waterside Class Ltd v Mowi ASA, the CAT declined to certify a 44-million-person salmon cartel claim, citing proportionality concerns where a £21 million costs budget was weighed against potential per-claimant damages of £2 to £9. The pattern echoes Gutmann v First MTR, which produced a £25 million settlement with a take-up rate below 1%, distributing funds to fewer than 7,300 of roughly 10 million potential claimants.

The tribunal now expects realistic distribution projections at the outset, rigorous value-for-money testing, and class representative fees set at "public sector rates," having rejected proposed charges of £300 per hour. It has also signalled it will examine how stakeholders are compensated if class members fail to materialise.

For the funding sector, the recalibration compounds existing uncertainty surrounding the debate over reversing the PACCAR ruling, including the prospect of retrospective fee-recovery challenges. Funders face a more demanding gateway to certification at a moment when the economics of large consumer claims are already under pressure.