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

A newly published opinion piece argues that the push to compel disclosure of third-party litigation funding has moved past isolated state experiments and become a coordinated reform effort spanning Congress, statehouses and federal rulemaking.

As reported by the Las Vegas Review-Journal, the commentary by Jack Kalavritinos of InsideSources centres on the Litigation Funding Transparency Act of 2026, introduced in February by Senator Chuck Grassley (R-Iowa) and co-sponsors. The piece frames the federal bill as the anchor of a broader movement rather than a standalone measure.

At the state level, the author points to Georgia's Courts Access and Consumer Protection Act and to enacted reform legislation in Arizona, Colorado, Kansas, Montana and Oklahoma, with Ohio and North Carolina added to the list of jurisdictions taking up the issue. The commentary treats that spread as evidence of durable legislative appetite rather than a single-session trend.

The piece also draws on the Washington Health Innovation Council's 2024-25 annual report, which it says documents litigation funders targeting health-care innovators, and notes that Lawyers for Civil Justice has made a joint filing seeking an amendment to the Federal Rules of Civil Procedure. The U.S. Chamber Institute for Legal Reform is cited as tracking the momentum.

The author's central objection is that funders are "pouring billions of dollars into lawsuits" without courts, defendants or claimants necessarily knowing who is behind a case, concluding that "justice should not be a financial product." No figures on total industry size are offered.

The commentary reflects the reform side of an ongoing debate in which funders argue that disclosure mandates risk exposing privileged strategy and deterring legitimate access to capital.

Alphabet has agreed to pay £260 million to settle a UK collective action brought on behalf of app developers over Google Play commissions, with £160 million earmarked for the class and £100 million allocated to the funders, insurers and legal team that carried the case. That stakeholder allocation amounts to roughly 38% of the total settlement fund.

As reported by EU Today, the proposed settlement resolves a claim alleging abusive Play Store commissions without any admission of liability by Google. The £160 million class pot is to be distributed to UK-domiciled developers that sold digital content through Play Store-distributed apps between August 2018 and July 2026.

The claim was brought before the Competition Appeal Tribunal by competition law professor Barry Rodger of the University of Strathclyde, who instructed Geradin Partners. The case was certified in May 2025 and had originally been valued at more than £1 billion, with the underlying allegation that Google restricted developers' ability to distribute apps outside the Play Store while charging commissions of around 30%. Litigation funding for the proceedings has been provided by Bench Walk Advisors.

The Tribunal has listed a settlement approval hearing for 15 September, at which it will apply the statutory test of whether the agreement is just and reasonable. Represented persons had until 10 September to file written submissions. Approval would avert a trial scheduled to begin on 28 September that was expected to run for ten weeks.

Damien Geradin described the agreement as the largest settlement to date under the UK's opt-out competition regime. Google maintains it has strong defences to the claim.

California lawmakers have passed a pair of bills that would restrict the influence outside capital can exert over litigation, sending both measures to Governor Gavin Newsom for signature. Together they represent one of the most direct state-level attempts yet to regulate the relationship between private investors and the law firms they finance.

As reported by the Edinburg Post, which carried the Los Angeles Times account of the vote, AB 2305, authored by Assemblymember Ash Kalra (D-San José), would bar private equity firms and hedge funds from dictating case strategy after funding a law firm. The measure targets investor involvement in decisions such as how many clients a firm signs and when a case settles, and it prohibits firms from using investor money for case marketing. Enforcement would sit with the State Bar.

The companion measure, AB 2039 from Assemblymember Rick Chavez Zbur (D-Los Angeles), addresses client solicitation. It would strip the licence of any attorney convicted of felony capping, or of misdemeanor capping where the lawyer acted knowingly and for financial gain, and carries fines of up to $25,000 per violation alongside new whistleblower protections for law firm employees.

Both bills were sponsored by the Consumer Attorneys of California. Zbur framed the package as a response to reported patterns of attorney misconduct, while Consumer Attorneys president Douglas Saeltzer said the group was "not trying to insulate ourselves from accountability."

Not everyone is satisfied. Jaime Huff of the Civil Justice Association of California withdrew support for AB 2305, describing its enforcement mechanism as toothless: "It's like the mall cop of self-policing." The bills now await the Governor's decision.

The head of personal lines at Ignite Specialty Risk has argued that standard after-the-event indemnity limits are being outgrown by higher-value claims and group actions, and that insurers need to rethink both limits and long-standing exclusions.

As reported by Legal Futures, Kyle Stubbs writes that modest limits and standard policy structures served personal injury and consumer claims adequately for years, but that "as damages, disbursements and adverse costs exposure continue to increase, there are more cases where conventional scheme limits may no longer provide adequate protection." He identifies catastrophic injury, clinical negligence and professional negligence as the areas where the gap is widest.

Group litigation is the second pressure point. Multi-party claims have historically been excluded from many ATE products, an approach Stubbs argues is becoming untenable. "The growth of collective consumer actions and multi-party litigation means these claims are likely to become a far more established part of the legal landscape over the next decade," he writes, suggesting insurers will need to price the risk rather than carve it out.

The piece also points to rising complexity in costs management and regulatory attention on premium fairness and consumer protection, with pressure for premium structures that remain proportionate to the cover provided.

Ignite has expanded its litigation insurance footprint over the past several years, launching capital protection insurance in the US, extending its offering across the EEA and entering the Australian market with a Sydney hire.

Lawyers at Signature Litigation have argued that the UK government's latest consultation on the opt-out collective actions regime must raise the certification bar without loading additional cost and delay onto class representatives.

As reported by The Global Legal Post, partner Becca Hogan, senior associate Tom Crawford and paralegal Nikki Sutton-MacGregor write that businesses facing collective claims can incur significant cost, uncertainty and reputational exposure before the merits are tested, while a low certification threshold leaves claimants exposed to funding expensive claims that ultimately fail.

The Department for Business and Trade consultation proposes a more explicit statutory merits test and closer scrutiny of costs against overall benefits. The authors note one proposal would have the Competition Appeal Tribunal indicate the "reasonableness" of a litigation funder's return at the point of certification. They cite the consultation's reference to claims against Stagecoach South Western Trains, where less than £216,000 reached class members against "more than £10 million" paid to lawyers, funders and other advisers.

On funding, the authors observe that the consultation "appears to give the green light for damages-based agreements," which would go further than the stalled Litigation Funding Agreements (Enforceability) Act 2024 by permitting DBAs directly in opt-out proceedings. They argue wider funding options should increase competition, reduce the cost of litigation finance and lift claim volumes, noting that market practice currently suggests a quantum of at least £500 million is needed to attract certain funders.

The consultation closes on 25 September 2026.

Victoria's contingency fee regime is producing court-approved rates that track third-party funder commissions almost precisely, according to the Australia chapter of Chambers' Litigation Funding 2026 guide.

According to the Chambers and Partners practice guide, authored by Jason Geisker, Dirk Luff, Sam Sheridan and Georgina Overend of Claims Funding Australia, the median group costs order rate since the regime began is 24.5%, within a range of 14% to 40%. That figure "closely compared to the 24% median rate for third-party litigation funding commissions" considered by courts across the seven years from the first common fund order in October 2016 through 31 December 2023.

Under the Victorian model, the Supreme Court fixes the percentage payable to the plaintiff law firm early in the proceeding and "may revisit this percentage at a later stage," including at settlement approval. The guide cites *Bogan v The Estate of Peter John Smedley (Deceased)* [2022] VSC 201 as authority that fee-sharing with funders is permissible under a group costs order, provided the law firm is not a "mere front" for the funder.

On after-the-event insurance, the authors report that competition "has applied downward pricing pressure, with more flexible options than the historical 20–40% of policy indemnity limits." They point to *i-Prosperity Pty Ltd (in liquidation) v Crown Melbourne Ltd* [2025] NSWSC 1525, where the court accepted that an ATE policy carrying an anti-avoidance endorsement provided adequate security for costs.

The guide estimates Australian litigation funding market revenue at A$123.6 million for the 2025–2026 financial year.

The UK Financial Ombudsman Service has ordered litigation lender Novitas Loans to refund all interest and charges and halve a borrower's capital liability after finding the firm funded both parties to the same property dispute without telling either of them.

As reported by the Law Gazette, the complaint concerned former partners litigating against one another over property. Novitas had already lent to one party when it extended a facility to the other, leaving it with access to legally privileged information from both sides. The ombudsman found the arrangement "created a situation where Novitas had two or more competing interests and there was at least the potential that serving one of those interests could damage or harm the other interest."

There was no evidence the lender disclosed the dual funding to either client, no conflict management procedures, and no separate case officers assigned to each borrower. The ombudsman also found the pre-loan checks neither reasonable nor proportionate: Novitas asked only whether the applicant was a UK resident, checked for county court judgments or insolvency proceedings, and confirmed he owned a property that could be sold to repay the loan.

The borrower earned approximately £10,000 a year and already owed £240,000 when Novitas approved a £60,000 facility at 18% annual interest, later extended by a further £30,000. His former partner received approximately £50,000. The ombudsman described the arrangements as unfair, citing a "significant inequality of knowledge and understanding," and capped the borrower's total liability at roughly £36,000.

Novitas ceased accepting new clients in December 2021, and parent Close Brothers subsequently moved to write off around £90 million tied to unsuccessful funded cases.

Boston private equity firm Charlesbank Capital Partners is in advanced talks to take a stake in insurance defence firm Wood Smith Henning & Berman through a management services organisation, in a transaction that would rank as the largest private equity investment in a US law firm to date.

As reported by Above the Law, the deal values the firm at roughly $700 million, equivalent to about 18 times its adjusted EBITDA of $38.2 million. WSHB posted revenue of $244 million last year and operates more than 500 lawyers across 43 offices in 35 states and London. Charlesbank manages approximately $22 billion and traces its origins to managing Harvard's endowment. The parties have signed a letter of intent, with a definitive agreement expected in the coming weeks.

The structure is the mechanism that makes the investment possible. Rather than acquiring the law firm itself, Charlesbank would take a stake in a separate entity holding WSHB's back office, billing and technology operations, which then supplies those services to the attorney-owned practice for a fee. That split allows outside capital to participate in law firm economics without triggering the prohibition on non-lawyer ownership that applies in most US states.

LawFuel reported the talks on 20 August, framing the transaction as a test of the ownership rules that have kept institutional capital at the perimeter of the US legal market.

The deal follows a wave of MSO formation involving private equity and litigation funders in the personal injury sector, and arrives as several states move to restrict such arrangements.

Crestline Investors has closed its European Capital Solutions Fund II at $625 million in commitments, roughly 75% larger than its predecessor vehicle, with litigation finance named among the alternative asset classes the strategy is built to underwrite.

As reported by Pulse 2.0, the fund provides capital across the structure — from senior secured debt through to structured equity — for asset-backed and lower-middle-market businesses in Northern and Western Europe. Alongside conventional collateral, Crestline points to what it describes as less traditional assets including music royalties and litigation finance.

Roughly 35% of the fund had already been committed as of the second quarter of 2026. Limited partners include public and private pension plans, insurance companies and sovereign wealth funds.

Crestline has been deploying the strategy since 2015, completing approximately $2 billion across 45 European transactions. The firm manages around $18 billion in credit assets and operates as part of Rithm Capital.

Michael Guy, executive managing director and head of European credit, said the "European lower-middle-market continues to face a significant funding gap requiring creativity, speed and asset-level expertise." Keith Williams, executive managing director and chief investment officer, added that Crestline has "built relationships and proprietary sourcing networks, accessing bilateral opportunities difficult to replicate."

Crestline is a familiar name in the funding market, having provided a £20 million facility to UK funder Apex Litigation Finance in 2023. The latest close signals continued appetite among private credit managers to treat legal claims as one collateral type within a broader specialty lending mandate rather than as a standalone strategy.