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The Role of Superannuation Funds in Litigation Finance

July 20, 2022

The Role of Superannuation Funds in Litigation Finance

The role of superannuation funds in litigation finance (specifically in funding class action claims) has been highlighted by industry insiders in Australia, who point to it as a benefit to the funds themselves and also an encouragement of good corporate governance. The recent example of HESTA, a super fund based in Sydney, taking part in a class action lawsuit against multiple financial service companies, has demonstrated both the appetite and the potential benefits of such engagements. In an article by Super Review, vice president and managing director of Financial Recovery Technologies, Sean Cookson, spoke about this more active approach to investment, and highlighted HESTA as a super fund that has been able to leverage its capital to apply pressure through this alternative avenue. Mr Cookson pointed to the fact that apart from the US, Australia represented one of the lowest risk countries for funds to join class action claims when compared to jurisdictions such as Germany and the UK. Mary Delahunty, the former head of impact at HESTA, went a step further and stated that it was incumbent upon super funds to recover losses through class actions where corporates have failed in their fiduciary duty to shareholders. However, both Cookson and Delahunty warned that in order for this to be effective, the Australian government will need to reverse course and place an emphasis on regulating corporate behaviour.

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JurisTechne Launching Algorithmic Litigation Fund Powered by AI

By John Freund |

Australian legal technology company JurisTechne is launching a litigation fund underpinned by its proprietary artificial intelligence platform, marking a new approach to data-driven case selection and portfolio management in the litigation funding space.

As reported by Lawyers Weekly, the fund will leverage what the company calls "Algorithmic Law" — a framework combining a custom-built small language model with advanced machine learning to assess litigation claims, extract insights from case outcomes, and model financial returns.

JurisTechne, founded by Mona Chiha and backed by UTS Startups and AWS, built its proprietary model with over 40 million parameters designed specifically for legal data. The platform integrates directly with government legal databases without third-party intermediaries and emphasizes explainable AI with what the company describes as a "zero percent hallucination guarantee," with all outputs backed by verifiable legal sources.

The company's vision is to create opportunities for investors to participate in diversified funding agreements that support victims of crime and other claimants, combining ethical investment with data-driven case assessment. The approach represents a departure from the traditional funder model, which relies primarily on experienced legal professionals to evaluate claims.

The launch adds JurisTechne to Australia's growing litigation funding market, which generated an estimated AUD $123.6 million in revenue in the 2025-2026 financial year. The country's funding landscape is dominated by established players including Omni Bridgeway, Litigation Capital Management, and Balance Legal Capital, making the entry of an AI-first competitor a notable development for the sector.

Commercial

Westfleet Insider 2025: Commercial Litigation Finance Rebounds as Capital Constraints Persist

By John Freund |

The U.S. commercial litigation finance market posted a notable recovery in 2025, with new capital commitments climbing approximately 23% year-over-year to $2.8 billion across 346 new deals, according to the seventh annual Westfleet Insider report.

As reported by Westfleet Advisors, the rebound follows two consecutive years of contraction — commitments had slipped from $2.7 billion in 2023 to $2.3 billion in 2024 — and signals renewed deployment activity after a period of broad market retrenchment.

Despite the headline recovery, the data paints a nuanced picture. The uptick was driven by incremental deployment among a small cohort of established funders rather than any broad-based expansion of available capital. Of the 39 funders identified as active in the U.S. commercial market, a notable subset deployed little to no new capital during the reporting period, and only one new entrant emerged. Several funders are actively winding down operations, pointing to a quiet but ongoing consolidation across the industry.

Deal economics remained largely stable. The average transaction size held steady at approximately $8.1 million overall, though the composition shifted meaningfully: single-matter deals contracted to $4.5 million from $6.6 million the prior year, while portfolio transactions expanded to $19.6 million from $16.5 million. Portfolio structures continued to dominate, representing 64% of new commitments.

One of the more significant structural shifts in 2025 was the decline in Big Law utilization, with the share of total commitments directed to the 200 largest U.S. firms dropping to 24% from 37% in 2024. Client-directed deals edged ahead of firm-directed arrangements for the first time in recent years, representing 52% of commitments.

Other notable findings include patent litigation accounting for 27% of funded matters, contingent risk insurance coverage ticking up to 21% of deals, and claim monetization declining to 17% of new commitments from 26% in 2024.

Commercial

Gen Re Calls for EU-Wide Third-Party Litigation Funding Regulation

By John Freund |

The reinsurance industry is adding its voice to growing calls for a unified regulatory framework for third-party litigation funding across Europe.

As reported by Gen Re, the European litigation funding market now includes more than 300 funders operating with limited transparency and fragmented oversight across EU member states. The publication highlights a significant regulatory gap, with most countries allowing TPLF under general contract law while lacking specific rules around disclosure, conflicts of interest, or funder control over litigation strategy.

The Netherlands and Germany lead Europe as the most developed markets, while Ireland still prohibits outside litigation funding under common law. France, Spain, and Portugal have introduced or are considering consumer-focused legislation, but no harmonized EU-wide framework exists.

Insurance Europe and the Reinsurance Advisory Board have both called for regulation at the EU level, arguing it is necessary to maintain trust in the justice and financial systems. Their primary concerns include a lack of transparency about funding arrangements, potential conflicts of interest, rising litigation costs, and insufficient investor oversight.

Proponents of the industry counter that professional funders improve access to justice for under-resourced claimants and help filter out weak claims through rigorous due diligence. A cross-sector group of business associations issued a joint statement in January 2026 renewing their call for proportionate, harmonized EU-level rules.