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Recent Developments in Litigation Finance (Part 2 of 2)

December 11, 2017

Recent Developments in Litigation Finance (Part 2 of 2)

By Mauritius Nagelmueller This article aims to provide an overview of the most significant recent developments in the litigation finance industry. Part 2 of this 2-part series discusses the rapid growth of litigation finance across the globe, as well as its multi-dimensional expansion into diverse markets. If you’d like to reference Part 1 of this series, you can find it here. Growth The most significant overall trend in litigation finance is simply put: growth – a vibrant and ongoing increase in the use and acceptance of the industry. Litigation finance has emerged from a promising niche into a mainstream alternative asset class. The use has multiplied in the recent years, and among many other characteristic features, investors are attracted by the chance to diversify their portfolios with uncorrelated assets. The demand in the legal world is still much higher than the supply of litigation finance – an indicator that normally only the best cases are receiving financing. By now, the business spans the financing of both plaintiffs and defendants, single cases and portfolios, at practically every stage of the dispute, for example also at the enforcement phase. As litigation finance has become a multi-billion-dollar business, surveys and reports by universities and journals, as well as financing providers point to its continued growth, with no signs of stopping any time soon. While detailed data grows increasingly available, it is hard for reporters or councils to keep pace with the industry, which continues to evolve before initial research can proffer valid conclusions. While this powerful forward movement promotes access to justice in the eyes of many, the impact on the civil justice system concerns others. Calls for more rules and regulation regarding inter alia, disclosure and conflicts of interest remain loud. Whichever side one chooses, the market for this service is growing, the demand enormous, and high-quality cases tend to find high-quality finance providers. Expansion For all the reasons stated above, as well as in the Part 1 of this series, 2017 has been the year of expansion for litigation finance firms. New offices in multiple jurisdictions, new funds that are larger or have innovative structures, and broader services providing the full spectrum of finance and risk management related to legal disputes. A wave of new office launches took place in multiple directions internationally. Litigation finance firms from the U.K. entered the U.S. market, and are eager to establish their business in New York City, Washington D.C., Philadelphia, California, and a number of other locales across the U.S. Strategic recruiting, e.g. of former U.S. judges and biglaw partners, builds strong teams in a constantly growing environment, and makes a career in litigation finance a more and more attractive option. Following the developments in Asia described previously, litigation finance firms have opened their first offices in Singapore. The market is also growing in Canada, where local courts have increasingly embraced litigation finance for the past 15 years. International litigation finance and insurance firms seem attracted, and have ventured into Canada this year. And funds are growing bigger accordingly. The largest players have billions of dollars committed to the legal market, able to invest hundreds of millions in a short period of time. The biggest single litigation investment fund in North America has been raised this year, at $500 million. An increase in size is not the only development, however, since crowdfunding and innovative online platforms play a progressively important role, opening the market to an even broader range of participants. Litigation finance has never been one-dimensional, but has included tailored financing concepts and related services like asset tracing for some time. The progress of portfolio financing shapes the market thoroughly. More recently, the range of available insurance options has developed in the U.S., bringing a new variety of sophisticated services, such as contingency fee insurance and attorney fee insurance solutions which can offer a cheaper hedge compared to financing. All in all, it will be fascinating to watch how things play out in the years ahead. Whatever the outcome, 2017 will certainly be remembered as a transformative year for the nascent industry of litigation finance.   Mauritius Nagelmueller has been involved in the litigation finance industry for more than 10 years. This 2-part article is for general information purposes only and does not purport to represent legal advice. The views and opinions expressed are those of the author and do not necessarily reflect the position of his employer. No reader should act or refrain from acting on the basis of any information related to this 2-part article without seeking the appropriate advice from a lawyer licensed in the recipient’s jurisdiction.

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Institute for Legal Reform Urges EU Clampdown on Litigation Funding

By John Freund |

As debate over third-party litigation funding (TPLF) continues to intensify globally, new pressure is being applied at the European level from business and industry groups calling for tighter oversight. A recent submission from a U.S.-based advocacy organization urges EU policymakers to take coordinated action, framing litigation funding as a growing risk to legal certainty and economic competitiveness across the bloc.

An article from Institute for Legal Reform outlines a formal letter sent to senior EU officials calling for harmonized, EU-wide regulation of third-party litigation funding. The Institute argues that the rapid expansion of TPLF—particularly in collective actions and mass claims—has outpaced existing regulatory frameworks, creating what it characterizes as opportunities for abuse. According to the submission, funders’ economic incentives may distort litigation strategy, encourage speculative claims, and exert undue influence over claimants and counsel.

The letter specifically urges institutions such as the European Commission and the European Parliament to introduce transparency and disclosure requirements around funding arrangements. The Institute also advocates for safeguards addressing funder control, conflicts of interest, and capital adequacy, suggesting that inconsistent national approaches risk regulatory arbitrage. In its view, the EU’s Representative Actions Directive and broader access-to-justice initiatives should not be allowed to become conduits for what it calls “profit-driven litigation.”

The submission reflects a familiar narrative advanced by business groups in the U.S. and Europe, linking litigation funding to rising litigation costs, forum shopping, and pressure on corporate defendants. While the Institute positions its recommendations as pro-consumer and pro-rule-of-law, the letter has already drawn criticism from funding advocates who argue that TPLF improves access to justice and levels the playing field against well-resourced defendants.

Case Developments Commercial

Siltstone Capital Reaches Settlement with Former General Counsel

By John Freund |

Litigation funder Siltstone Capital and its former general counsel, Manmeet “Mani” Walia, have reached a settlement resolving a trade secrets lawsuit that had been pending in Texas state court. The agreement brings an end to a dispute that arose after Walia’s departure from the firm, following allegations that he misused confidential information to establish a competing business in the litigation finance space.

As reported in Law 360, Siltstone filed suit in late 2025, claiming that Walia, who had served as general counsel and was closely involved in the company’s internal operations, improperly accessed and retained proprietary materials after leaving the firm. According to the funder, the information at issue included sensitive business strategies and other confidential data central to Siltstone’s competitive position. The lawsuit asserted claims under Texas trade secrets law, along with allegations of breach of contract and breach of fiduciary duty tied to confidentiality and restrictive covenant provisions.

Walia disputed the allegations as the case moved forward, setting the stage for what appeared to be a hard-fought legal battle between the former employer and its onetime senior executive. However, before the dispute could be fully litigated, the parties opted to reach a negotiated resolution. Following the settlement, Siltstone moved to dismiss the case with prejudice, signaling that the matter has been conclusively resolved and cannot be refiled.

The specific terms of the settlement have not been made public, which is typical in cases involving alleged trade secret misappropriation. While details remain confidential, such resolutions often include mutual releases of claims and provisions aimed at protecting sensitive information going forward.

Commercial People Moves

Burford Capital Makes Strategic Entry into South Korea

By John Freund |

Litigation funder Burford Capital is expanding its footprint in Asia with its first senior hire in South Korea, marking a strategic move into a jurisdiction it sees as increasingly important for complex commercial and arbitration disputes. The firm has appointed Elizabeth J. Shin as Senior Vice President and Head of Korea, with responsibility for leading Burford’s activities in the market and developing relationships with Korean corporates and law firms.

Law.com reports that Shin joins Burford from Lee & Ko, where she was a partner in the firm’s international arbitration and global disputes practice. Her background includes advising on high-value cross-border commercial disputes, intellectual property matters, and arbitration proceedings across a range of industries. Burford has positioned her experience as a key asset as it looks to support Korean companies pursuing claims in international forums and managing the cost and risk of major disputes.

The hire reflects Burford’s view that Korea represents a growing opportunity for legal finance, driven by the country’s sophisticated corporate sector and increasing involvement in international arbitration and complex litigation. By establishing a senior presence on the ground in Seoul, Burford aims to provide local market insight alongside its capital and strategic expertise, while also raising awareness of litigation funding as a tool for dispute management.

Korea has traditionally been a more conservative market for third-party funding compared with jurisdictions such as the US, UK, and Australia, but interest in alternative dispute finance has been gradually increasing. Burford’s move signals confidence that demand will continue to grow, particularly as Korean businesses become more active in global disputes and seek flexible ways to finance large claims.