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How Our Top-5 Articles of 2021 Foretell What’s Coming in 2022

January 6, 2022

How Our Top-5 Articles of 2021 Foretell What’s Coming in 2022

Litigation Finance has enjoyed another year of growth and innovation, as we enter a shocking third year of the COVID pandemic. New funds have arisen, affording more potential claimants an opportunity to experience their day in court. New entrants are emerging in the funding space, innovative investment opportunities are popping up in the form of ILOs on the blockchain, and prominent examples of the benefits of legal funding are arising with increasing frequency. Each of our top-5 most popular articles in the last year illustrate an industry trend we think is worth keeping an eye on. These trends also offer clues as to what we can expect in the coming year. Below are the top-5 articles from 2021:  #5) Litigation Finance and Patent Litigation—Fast Friends 2021 Trend: One thing we’ve learned about third-party litigation funding is that once clients and plaintiffs get a taste of it, they recommend it highly. This leads to explosive growth in specific sectors. In this contributed post, Slingshot Capital founder Ed Truant explains that in 2021, Patent and IP litigation went from a relatively uncommon investment to one that is highly sought out. Some of this can be attributed to the pandemic and the investor rush toward uncorrelated assets. But some of the popularity of IP litigation investment stems from the possibility of awards in the multi-millions. As funders sharpen their due diligence skills and use new tech to predict case outcomes, the likelihood of sourcing meritorious patent cases grows. From the article: “It used to be the case that patent litigation was viewed negatively by the litigation funding community…Then about two years ago, I noticed an increase in the number of patent cases being brought to the attention of funders, and in the number of funders marketing that they are interested in providing financing to patent cases.” What does this mean for 2022? If/when COVID restrictions are lifted and life slowly returns to normal, we’ll likely see similar growth in other sectors. We know that when law firms and clients have a good experience with funders, word gets around. The expectation is that Litigation Finance will improve in recognition and accessibility. As a largely self-regulating industry, third-party legal funding continues to position itself as a public good. We have every reason to believe that will continue in 2022 #4) Litigation Finance Basics 2021 Trend: The popularity of this article, originally published in 2017, reveals interesting things about the business of legal funding. Legal professionals and many types of investors are taking an increased interest in litigation funding. It also underscores that this widespread curiosity about the industry is leading people to investigate it from its humble beginnings to its current role as a public good. From the article: “We don’t all have the same access to the legal system. Those with money have more access than those without. Litigation finance allows claimants without money to have the kind of access to justice that those with money currently enjoy. Obviously, that threatens some, but for the rest of us, litigation finance should be celebrated as a means of achieving equality of opportunity when it comes to preserving our legal rights.” What does this mean for 2022? We predict more of the same, probably on an even grander scale. As regulations become more welcoming to funders, investors are taking greater notice of the practice. Now that regulations are relaxing around non-lawyer ownership of legal firms, the potential for lawyer/funder co-ownership of firms has earned the interest of many prominent investment firms. Jurisdictions around the world are relaxing champerty and maintenance restrictions and creating an environment more welcoming to third-party funding for an array of legal matters. This includes arbitration, patent and IP litigation, and claims enforcement. The popularity of a back-to-basics piece like this one, demonstrates that more people in more industries are curious about what litigation funding can do for them. #3) The Impressive Growth of Commercial Litigation Finance 2021 Trend: Our third entry is another Ed Truant piece illustrating an interest in Litigation Finance from people outside the legal field. In this piece, however, emphasis is placed on the addressable market for litigation funding. This tells us that financial experts are looking toward third-party funding as a future investment. From the article: “I think it is important for all stakeholders to understand the size of an industry, so investors can determine whether it has the scale and growth attributes necessary to justify a long-term approach to investing in the sector.” What does this mean for 2022? We predict that hedge funds and private equity firms will continue to flock to the litigation funding sector. This may happen at an even faster clip, as certain types of litigation rise to prominence in the coming year. Breach of contract, insurance litigation, and issues of employer responsibility as related to COVID precautions are expected to flood court dockets in 2022. This amid an effort to catch up on the backlog of cases caused by court delays and closures.  More litigation means more opportunity for investors to avail themselves of the benefits of TPLF as an uncorrelated asset. #2) Investor Caveats in the Commercial LitFin Asset Class 2021 Trend: As an increasing number of investors seek out litigation funding, the pitfalls associated with this type of investment aren’t as well known. Ed Truant of Slingshot Capital, shows up again on our list, as he explains how investors can better understand this asset class. Matters of tail risk, gross vs net returns, portfolio valuation, and deployment risks are all areas investors will want to be familiar with. After all, just because an asset is uncorrelated, does not mean it is free from risk. From the article: “The asset class presents a unique opportunity to add an asset that has true non-correlation, along with inherent ESG attributes. This makes litigation finance a very attractive asset class. However, an investor needs to do their homework prior to executing an investment.”  What does this mean for 2022? The emphasis on ESG investing bodes well for the future. Litigation Finance’s commitment to investing in environmental, social justice, and governance litigation shines a light on the fact that LitFin investments can be simultaneously lucrative, and a net gain for society. #1) Bank Cartel Claims Europe Announces $12 Million Funding Round 2021 Trend: The popularity of this article is an affirmation of the growth and expansion of Litigation Finance in the EU market. The piece details three antitrust cases in which the fund will deploy cash. The banks are accused of engaging in cartel behavior—one of the most serious types of antitrust charges. This type of piece serves to illustrate how litigation funding helps fight corruption and works toward the public good. It also shows us that fundraising capital is out there for experienced funders with proven track records. From the article: “In these three cases, for example, the pension and hedge funds that lost millions of dollars…can effectively claim their damages through actions before a national court. …in most cases, the remaining question to be decided is the amount of damages. This makes antitrust litigation very attractive for investors.” What does this mean for 2022? We think this means even greater global expansion for Litigation Finance. While funding still has its naysayers, the global mood toward third-party legal funding is largely positive. As the practice casts a progressively wider net—most of those who have used litigation funding to pursue their litigation report being satisfied with the results. Legal funding is already growing in India, Singapore, Germany, South Africa, and China. There’s no reason to think expansion of the industry will not continue in 2022.

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LSC Showcases Access-to-Justice Tech at San Antonio ITC

By John Freund |

The Legal Services Corporation (LSC) brought the access-to-justice conversation squarely into the technology arena with its 26th annual Innovations in Technology Conference (ITC), held this week in San Antonio. Drawing nearly 750 registered attendees from across the legal, business, and technology communities, the conference highlighted how thoughtfully deployed technology can expand civil legal assistance for low-income Americans while maintaining ethical and practical guardrails.

Legal Services Corporation reports that this year’s ITC convened attorneys, legal technologists, court staff, pro bono leaders, academics, and students at the Grand Hyatt San Antonio River Walk for three days of programming focused on the future of legal services delivery. The conference featured 56 panels—16 streamed online and freely accessible—covering topics ranging from artificial intelligence and cybersecurity to court technology, data-driven decision-making, and pro bono innovation.

LSC President Ron Flagg framed the event as a collaborative effort to ensure technology serves people rather than replaces human judgment. Emphasizing that technology is “not the answer by itself,” Flagg underscored its role as a critical tool when grounded in the real needs of communities seeking civil legal help. The conference opened with a keynote from journalist and author David Pogue, setting the tone for candid discussions about both the promise and limitations of emerging technologies.

A notable evolution this year was the introduction of five structured programming tracks—AI beginner, AI advanced, IT operations, client intake, and self-help tools—allowing attendees to tailor their experience based on technical familiarity and organizational needs. The event concluded with hands-on workshops addressing cybersecurity incident response, improving AI accuracy and reliability, change management for staff resilience, and user experience evaluation in legal tech.

Beyond the conference itself, ITC reinforced LSC’s broader leadership in access-to-justice technology, including its Technology Initiative Grants, AI Peer Learning Lab, and its recent report, The Next Frontier: Harnessing Technology to Close the Justice Gap. Senior program officer Jane Ribadeneyra emphasized the dual focus on informed leadership decisions and practical tools that directly support frontline legal services staff handling matters like eviction, domestic violence, and disaster recovery.

For the litigation funding and legal finance community, ITC’s themes highlight a growing intersection between technology, access to justice, and capital deployment—raising questions about how funders may increasingly support tech-enabled legal service models alongside traditional case funding.

Commercial

Litigation Financiers Organize on Capitol Hill

By John Freund |

The litigation finance industry is mobilizing its defenses after nearly facing extinction through federal legislation last year. In response to Senator Thom Tillis's surprise attempt to impose a 41% tax on litigation finance profits, two attorneys have launched the American Civil Accountability Alliance—a lobbying group dedicated to fighting back against efforts to restrict third-party funding of lawsuits.

As reported in Bloomberg Law, co-founder Erick Robinson, a Houston patent lawyer, described the industry's collective shock when the Tillis measure came within striking distance of passing as part of a major tax and spending package. The proposal ultimately failed, but the close call exposed the $16 billion industry's vulnerability to legislative ambush tactics. Robinson noted that the measure appeared with only five weeks before the final vote, giving stakeholders little time to respond before the Senate parliamentarian ultimately removed it on procedural grounds.

The new alliance represents a shift toward grassroots advocacy, focusing on bringing forward voices of individuals and small parties whose cases would have been impossible without funding. Robinson emphasized that state-level legislation now poses the greater threat, as these bills receive less media scrutiny than federal proposals while establishing precedents that can spread rapidly across jurisdictions.

The group is still forming its board and hiring lobbyists, but its founders are clear about their mission: ensuring that litigation finance isn't quietly regulated out of existence through misleading rhetoric about foreign influence or frivolous litigation—claims Robinson dismisses as disconnected from how funders actually evaluate cases for investment.

Commercial

ISO’s ‘Litigation Funding Mutual Disclosure’ May Be Unenforceable

By John Freund |

The insurance industry has introduced a new policy condition entitled "Litigation Funding Mutual Disclosure" (ISO Form CG 99 11 01 26) that may be included in liability policies starting this month. The condition allows either party to demand mutual disclosure of third-party litigation funding agreements when disputes arise over whether a claim or suit is covered by the policy. However, the condition faces significant enforceability challenges that make it largely unworkable in practice.

As reported in Omni Bridgeway, the condition is unenforceable for several key reasons. First, when an insurer denies coverage and the policyholder commences coverage litigation, the denial likely relieves the policyholder of compliance with policy conditions. Courts typically hold that insurers must demonstrate actual and substantial prejudice from a policyholder's failure to perform a condition, which would be difficult to establish when coverage has already been denied.

Additionally, the condition's requirement for policyholders to disclose funding agreements would force them to breach confidentiality provisions in those agreements, amounting to intentional interference with contractual relations. The condition is also overly broad, extending to funding agreements between attorneys and funders where the insurer has no privity. Most problematically, the "mutual" disclosure requirement lacks true mutuality since insurers rarely use litigation funding except for subrogation claims, creating a one-sided obligation that borders on bad faith.

The condition appears designed to give insurers a litigation advantage by accessing policyholders' private financial information, despite overwhelming judicial precedent that litigation finance is rarely relevant to case claims and defenses. Policyholders should reject this provision during policy renewals whenever possible.