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Key Takeaways from LFJs Special Digital Event: Mass Torts and Litigation Funding 

March 28, 2023

Key Takeaways from LFJs Special Digital Event: Mass Torts and Litigation Funding 

On Thursday March 23rd, Litigation Finance Journal hosted a special digital event: Mass Torts and Litigation Funding. Panelists included Michael Rozen (MR), Founder and Managing Partner at TRGP Investment Partners, James Romeo (JR), Managing Partner at Greenpoint Capital, Brian Roth (BR), Chief Executive Officer and Chief Investment Officer of Rocade Capital, and Michael Guzman (MG), Partner at Kellogg, Hansen, Todd, Figel and Frederick. The discussion was moderated by Ed Truant (ET), Founder of Slingshot Capital.

The panel discussion spanned a range of topics, including claims origination, financing/underwriting, plaintiff and defense-side strategies and tactics, the impact of ABS regulation and much more. 

Below are some key takeaways: 

ET: How does the industry originate claims and identify and validate claimants? And how has origination industry evolved over the years from the time of mass TV advertising to the current omni-channel world of advertising? 

MG: First, all of the old traditional methods still work.  Networking, late night TV, radio, advertising – all of that still works. But what I am seeing is a number of firms have either affiliated with or own social media marketers, who are using social media in targeted ways. It’s a lot cheaper depending on how you use it, and it can be a lot faster. So people are using the old techniques, plus a number of new ones.  I’ve had some really good success with that, because you’re not just blanketing the airwaves, the people that you get back are much more focused and more interested in what it is you’re trying to recruit them for. 

JR: I think it’s helpful to go back and think about the history of legal advertising, which started in the late 70’s when two lawyers started advertising, it led to some fighting in the state bar, but ultimately it was decided that legal ads are a form of free speech and that they provide consumers valuable information. 

We’ve now seen this huge evolution around what’s possible. There is very targeted social media and paid search advertising that is driven by analytics. At Triton we’re doing a lot of this, we’ve developed our own in-house marketing team, and we’re using things like intake forms and chatbots to help pre-screen potential claimants. We’re using different identify verification tools and we’re experimenting with different medical retrieval tools to help with the intake of potential claimants. 

ET: Describe the ‘fall-out rate’ of claimants and what are typical fall-out rates evidenced in the market and reasons therefor? Has there been an improvement in fall-out rates as a result of enhanced data analytics and technological sophistication?

MR: Access to justice is always a goal for those who think that corporate America has long gotten away with unequal justice because they have a lot of money and the individual claimants don’t. So having better ways of reaching people who may have been impacted by a drug that’s been pulled from the market or a product that didn’t work as advertised is obviously a good thing. The flip side is, in tougher economic times, you see higher claim rates from people who may not be good claimants, because there is an expectation there may be some quick money to be obtained. 

So I think the fall-out rate is really a function of whether or not you’re in the right economic time with the right kind of claim. Camp Lejeune is an example of that. 3M earplugs is an example of that. We’re talking about hundreds of thousands of claimants, whereas in an ordinary mass tort you may have tens of thousands of claimants. And this is something defendants don’t like, and they push back on litigation finance in particular, and argue that somehow specious claims are being promoted. What is really at the base of that is a desire to create an unequal footing between the haves and the have nots. If you are on the have side, it is obviously to your benefit to have either lower claim rates, fewer number of plaintiffs, and/or a higher fallout rate where you can allege later on that these were not valid claimants, that they were somehow propped by third party financing. 

Nobody who has or will speak on this panel will tell you that investing in non-meritorious claims is a good thing. Yet what the other side of this argument will claim is that somehow the fall-out rate as an individual metric is indicative of whether or not there are valid claims in a particular litigation. I would say you to it is irrelevant—the more claims you have in a litigation, the higher the fall our rate is going to be. 

ET: Given the high fall-out rates and the potential for false claimants, is this sector ripe for the application of blockchain to minimize duplication of claimants and decrease fall-out rates as well as tracking the transactions and pay-outs? 

 BR: Fall out impacts the litigation strategy and settlement strategy. When a litigation starts, nobody really knows what will be a settle-able case, so there’s always going to be some level of origination that’s not going to result in a paid claim at the end of the day. I do think the technology will help with some areas like de-duplication and dual representation, whether it’s blockchain or other smart contracts. We’re seeing billions of dollars transact in the space and there’s very little transparency across the different players in the space. I see that changing over time, and that will impact the fall out rates as well. 

ET: What is the nature of the prototypical plaintiff litigation firm? Why do so called “White Shoe” law firms not get involved in mass tort plaintiff litigation work? 

MG: When I started my career, there was this perception that there were defense-side firms and plaintiff-side firms. Lines were pretty well drawn, people crossed over from time to time. But for the most part, if you did plaintiff’s work you did plaintiff’s work, and you didn’t go back and forth. My firm and lots of others defy that model, and at this point, I’m not sure there is a prototypical plaintiff’s firm. My firm is a litigation boutique, and very early on we realized some of our clients wanted us to be plaintiffs for them, and it was enormously challenging and lucrative to play that role for them.

I think why so many of the so-called ‘white shoe’ law firms have found it difficult to be a plaintiff-side firm is because they have corporate departments or longstanding institutional clients, and some of those clients just don’t like the idea that one of those partner is representing them, but at the same time someone else is off pursuing a mass action or class action, so it gets to be an institutional conflict—it’s hard to manage from a client standpoint, and we’ve dealt with that over the years. 

ET: How has the US mass tort industry evolved in terms of the size of the industry, the quantum of cases and the number of claimants over the years? 

JR: If you look at the federal docket, it took something like 59 years to reach the first 250,000 cases in MDLs, and over the subsequent seven years, from 2007-2014, we hit a total of half a million cases, and then by 2021, we topped 1 million cases. So that’s an additional 500,000 case jump from 2014 to 2021. And there’s currently something like 360,000 cases that are still pending in the federal docket. So there’s definitely been an acceleration of cases, and that’s continued. And I don’t see that sopping any time soon. 

ET: Can you describe the various ways in which finance intersects with the mass tort industry?

BR: Financing is an ever changing landscape, but at the front end, you’re seeing it for case origination, a lot of times it’s done on a non-recourse basis. We see a lot of law firm loans, where you’re financing the whole process from origination to settlement. We’re also seeing capital enter for service providers in the space – lead origination or working up cases, ordering records on a contingent basis. We’re also starting to see some post-settlement finance develop, where firms are basically able to factor their claims. 

As we think about the space, we expect this to continue to evolve and develop, and this matures as an asset class, and we develop more data and track records, you’ll see more segmentation I think. But that should translate into more flexible options for the firm. The space currently is shaped by the rules around fee sharing and the ethical rules for law firms which prevent non-lawyers from having ownership in the firm. Obviously, Arizona and other jurisdictions are changing that, so the landscape of how finance intersects with firms is changing as well. 

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Commercial Regulatory Issues

Rep. Issa’s Litigation Funding Transparency Effort Falters in House Judiciary Committee

By John Freund |

The latest attempt to legislate transparency in U.S. litigation funding stalled in the House Judiciary Committee this week when the committee considered the Protecting Third Party Litigation Funding From Abuse Act but recessed without ever voting on the measure and did not reconvene to advance it. The bill, introduced by Representative Darrell Issa of California, has now effectively been pulled from further consideration at this stage.

An article in IPWatchdog states that the Protecting Third Party Litigation Funding From Abuse Act was debated alongside other measures during a lengthy markup that focused primarily on immigration enforcement issues. The measure closely tracked a previous effort, the Litigation Transparency Act of 2025, also spearheaded by Issa, which sought to require parties in civil actions to disclose third party funding sources and related agreements. Like its predecessor, the current bill faced procedural challenges and competing priorities in committee, and did not reach the floor for a vote before lawmakers recessed.

Issa and his co-sponsors have framed the effort as necessary to illuminate so-called abuses in the U.S. litigation system by requiring the identity of third party funders to be disclosed to courts and opposing parties. But the repeated failure of similar bills to gain traction reflects deep partisan and practical concerns. Opponents argue that broad disclosure mandates could chill legitimate funding arrangements and impede access to justice, while supporters insist that transparency is essential to protect defendants and the legal system from hidden financial interests.

The stall of this latest proposal comes amid other congressional efforts on litigation finance, including separate proposals to address foreign funding in U.S. courts, but underscores the political and policy challenges in regulating private capital in civil litigation. With the bill pulled, stakeholders will watch for whether future iterations emerge in committee or form the basis of negotiations in upcoming sessions.

Commercial Regulatory Issues

Malaysian Bar Backs Arbitration Funding Reform

By John Freund |

The Malaysian Bar has publicly endorsed Malaysia’s newly implemented legislative framework governing third party funding in arbitration, while cautioning that all stakeholders must remain vigilant as the regime is put into practice. The comments come as Malaysia formally joins a growing group of jurisdictions that have moved to regulate litigation and arbitration funding rather than prohibit it outright.

An article in Business Today Malaysia reports that the Malaysian Bar welcomed the coming into force of the Arbitration Amendment Act 2024 on 1 January 2026, which abolishes the long standing common law doctrines of maintenance and champerty in the context of arbitration. The new law expressly permits third party funding for arbitral proceedings and introduces a regulatory structure aimed at balancing access to justice with procedural fairness and independence. According to the Bar, the reforms are a positive and necessary step to ensure Malaysia remains competitive as an international arbitration seat.

The legislation includes requirements for funded parties to disclose the existence and identity of any third party funder, addressing concerns around conflicts of interest and transparency. It also introduces a code of practice for funders, designed to ensure that funding arrangements do not undermine counsel independence, tribunal authority, or the integrity of the arbitral process. The Malaysian Bar emphasised that funders should not exert control over strategic decisions, evidence, or settlement, and that tribunals retain discretion to manage funding related issues, including costs and security for costs applications.

While acknowledging ongoing concerns that third party funding could encourage speculative or unmeritorious claims, the Bar took the position that ethical and well regulated funding should not be viewed as a threat to arbitration. Instead, it framed funding as a legitimate tool that can enhance access to justice for parties who might otherwise be unable to pursue valid claims due to cost constraints. The Bar called on lawyers, arbitrators, institutions, and funders to uphold both the letter and the spirit of the new law as it is implemented.

Commercial People Moves

Omni Bridgeway Appoints Nathan Krapivensky as Investment Advisor

By John Freund |

Global litigation funder Omni Bridgewayhas announced the appointment of Nathan Krapivensky as an Investment Advisor, reinforcing the firm’s ongoing focus on deepening its investment expertise and strengthening origination capabilities across complex disputes.

Omni Bridgeway states that Krapivensky joins the business with extensive experience spanning litigation finance, complex commercial disputes, and investment analysis. In his new role, he will advise on the assessment and structuring of potential investments, working closely with Omni Bridgeway’s global investment teams to evaluate risk, quantum, and strategic considerations across funded matters. The appointment reflects the firm’s continued emphasis on disciplined underwriting and the development of sophisticated funding solutions for corporate clients, law firms, and claimants.

According to the announcement, Krapivensky brings a background that combines legal insight with commercial and financial acumen, positioning him to contribute meaningfully to Omni Bridgeway’s case selection and portfolio construction processes. His experience in analysing disputes at various stages of the litigation lifecycle is expected to support the firm’s efforts to deploy capital efficiently while maintaining rigorous investment standards. Omni Bridgeway highlighted that the role is advisory in nature, underscoring the importance of independent, high-quality judgment in evaluating opportunities across jurisdictions and asset classes.

The hire also aligns with Omni Bridgeway’s broader strategy of investing in talent as competition within the litigation funding market intensifies. As funders increasingly differentiate themselves through expertise rather than capital alone, senior advisory appointments have become a key lever for firms seeking to enhance credibility with sophisticated counterparties. By adding an experienced investment advisor, Omni Bridgeway signals its intention to remain at the forefront of the market for complex, high-value disputes.