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A New York appellate ruling, paired with the state's newly enacted consumer litigation funding law, is giving defendants fresh tools to scrutinize the financing behind personal-injury claims they suspect are fraudulent. Together, the developments mark a notable shift toward transparency in a market that has historically operated outside the view of courts and opposing parties.

As reported by Law360, the Appellate Division, First Department, held in *Lituma v. Liberty Coca-Cola Beverages LLC* that defendants may obtain discovery into a plaintiff's third-party litigation funding where they present evidence suggesting the underlying claims arose from systemic fraud. The November 2025 decision was the first time the court affirmed an order compelling a personal-injury plaintiff to produce funding-related discovery, vacating the note of issue to allow further inquiry.

The ruling lands alongside New York's Consumer Litigation Funding Act, signed by Governor Kathy Hochul on December 19, 2025, and effective 180 days later. The law caps a funder's recovery at 25% of a case's gross proceeds, requires plain disclosure of all charges and cumulative repayment amounts, and gives consumers a 10-business-day right to cancel without penalty. Attorneys are barred from accepting referral fees or holding financial interests in funding companies.

Notably, the statute stops short of mandating disclosure of funding arrangements during active litigation. For now, defendants seeking to expose questionable financing must rely on rulings like *Lituma* to pry those agreements into the open.

Burford Capital has urged the U.S. Supreme Court to overturn a Third Circuit decision that dismissed, on jurisdictional grounds, the litigation funder's bid to arbitrate a dispute tied to German antitrust litigation. Burford contends the appeals court committed what it called a "fundamental error" in concluding that federal courts lacked authority over the matter.

As reported by Law360, Burford told the justices on June 16 that the Court's own decision earlier this year in Jules v. Andre Balazs Properties is reason enough to undo the Third Circuit's ruling. In Jules, the Court held that a federal court which compels arbitration of federal claims under Section 4 of the Federal Arbitration Act retains subject-matter jurisdiction to confirm or vacate the resulting award, even without an independent basis for federal jurisdiction over the post-award proceeding.

Burford argues that principle squarely governs its case, and that the appeals court's contrary conclusion cannot stand in light of the new precedent. The funder is asking the justices to take up the matter and correct what it describes as a clear jurisdictional misstep.

The stakes extend beyond a single dispute. For funders, the ability to confirm and enforce arbitral awards in federal court is central to monetizing cross-border claims, and a jurisdictional dead-end at the enforcement stage raises both cost and risk. A decision to hear the case could bring welcome clarity for funders pursuing international, arbitration-related recoveries.

A new entrant has joined the litigation finance conference circuit. The inaugural Chicago Litigation Finance Summit convened at the Museum of Contemporary Art in early May, organized by Charles Zuo, a graduating JD/MBA candidate at Northwestern University.

As reported by Above the Law, Zuo built the program around a deliberately broad agenda, with panels spanning deal structures, funders operating across different capital structures, policy and academic perspectives, and legal technology. He described aiming for "both a diverse set of people and a diverse set of topics," pairing speakers who shared expertise but brought genuinely different vantage points.

Zuo's path to convening the summit included externing at the U.S. Bankruptcy Court for the Northern District of Illinois, clerking at Patterson Law, working at Bridge Legal, and serving as a law school ambassador for Harvey AI, alongside degrees in English literature, business analytics, and machine learning.

According to the profile, the inaugural event secured robust sponsor backing while maintaining editorial independence, and organizers reported strong feedback from attendees on the return generated by their participation.

The summit's arrival adds Chicago to a growing roster of regional venues where funders, lawyers, academics, and technologists gather as litigation finance continues to mature into an established asset class. Above the Law published the profile as the first installment of a two-part series.

A new lawsuit casts a harsh light on the consumer litigation funding model, with a major insurer accusing a New York funder of engineering a scheme to inflate personal injury claims at carriers' expense.

As reported by Insurance Business, New York Marine & General Insurance Company has sued Case Cash Funding and its principal, Gregory Elefterakis, a suspended attorney, in Manhattan federal court. The complaint, filed June 12, alleges that Case Cash advanced modest sums to injured claimants as "non-recourse" funding, then used its control over the claims to balloon them into multimillion-dollar demands.

According to the suit, the defendants paid referral fees to medical clinics, steered claimants toward favored attorneys, conditioned funding on claimants undergoing surgery, and blocked settlements that did not maximize their returns. In one instance, the parties had agreed on a $750,000 settlement, but the funder allegedly refused and asserted a lien of more than $1.4 million instead. The complaint cites a claimant who received just 13.3% of a $3.75 million settlement while the funder collected 47.5%, and another facing an effective interest rate of roughly 170%.

The filing also points to a securitization instrument, PEAR 2022-1, said to contain more than $84.6 million in receivables across nearly 16,807 advances—underscoring the scale of the operation. The case adds to mounting insurer pushback against consumer legal funding practices and feeds the broader debate over disclosure and regulation of the industry.

In a striking outcome for funded collective actions, the UK's Competition Appeal Tribunal has signed off on the discontinuation of a £480 million claim against Qualcomm that delivers no compensation to the millions of consumers it was meant to benefit.

As reported by CDR News, the Tribunal approved a "drop-hands" settlement on June 10 under which all parties discontinue proceedings and bear their own costs. The claim, brought by the Consumers' Association (Which?) as class representative, had alleged that Qualcomm abused its market dominance to overcharge for smartphone chips, inflating handset prices.

The Tribunal assessed the claim's prospects at just 10% to 15%, concluding that the class representative "no longer had a realistic prospect of success." The result is believed to be the first CAT settlement resolved on a drop-hands basis, with neither the class nor the funder receiving any payment despite the claim's headline valuation.

The action had been backed by litigation funder Augusta Ventures alongside law firm Hausfeld. For the funder, the outcome represents a total loss on its investment in the case—a pointed illustration of the downside risk inherent in the opt-out regime.

The decision lands amid intensifying scrutiny of funded class actions in the UK, where the Tribunal has shown a growing willingness to test the merits, economics, and consumer benefit of collective proceedings before allowing them to advance or settle.

As private equity firms extend their reach into the legal industry, a new commentary argues that the tax code has failed to keep pace with how litigation funders actually earn their returns.

Writing for RealClearMarkets, Michael Toth contends that third-party litigation funders routinely claim favorable capital gains treatment on their returns when that income should be taxed as ordinary income. He notes that the Treasury Department "has never bothered to clarify the proper tax treatment of TPLF returns," leaving a roughly $20 billion industry to structure deals as "derivative contracts" despite funders performing work that closely mirrors that of plaintiffs' attorneys—vetting cases, advising on strategy, and managing litigation budgets.

The piece opens with Fortress's recent $125 million investment in an Arizona personal injury firm, which Toth frames as evidence that funders are shifting from wagering on individual case outcomes toward financing law firms' back-office operations and steadier revenue streams. He argues that the disclosure bills congressional Republicans have introduced since 2019 are "focused on yesterday's market," addressing single-case funding even as investors move toward portfolio and operational models. He also flags that nonresident foreign funders can often avoid federal tax on U.S. litigation gains altogether.

Toth's proposed fix relies on existing authority: he urges Treasury to apply the substance-over-form doctrine and tax funding returns as ordinary business income, while noting that Congress could amend the definition of capital assets to exclude legal claims.

The credibility of the UK's opt-out collective action regime increasingly depends on a stubborn problem: persuading class members to actually claim the damages won on their behalf.

As reported by The Law Society Gazette, Rachel Rothwell, editor of Litigation Funding, examines how little of the money awarded in landmark cases is reaching the consumers it is meant to compensate. In Gutmann v South Western Trains, the boundary fares case, roughly £25 million was awarded—yet take-up was less than 1%, with only about £200,000 distributed to class members and £3.8 million directed to the Access to Justice Foundation. Many passengers, she notes, abandoned their claims once asked to supply bank details, wary of fraud.

The forthcoming Merricks v Mastercard payout will test the regime on a far larger scale. With £100 million of the £200 million settlement ringfenced for as many as 44 million potential claimants—roughly £45 to £70 each—the case has become a referendum on whether opt-out actions can deliver for the public rather than primarily for lawyers and funders.

Rothwell canvasses several proposed fixes: a central public register of claims endorsed by government or the courts; compelling defendants, particularly in the tech and utility sectors, to assist with distribution; and building trust through charities and consumer groups while offering vouchers in place of direct bank transfers. Legitimacy, she argues, hinges on a meaningful share of damages reaching those actually harmed.