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Should Law Firms Steer Clients to Litigation Funders – or Steer Clear of the Funding Process?

The following is a contributed piece by Ed Truant, founder of Slingshot Capital, and Andrew Langhoff, founder of Red Bridges Advisors.

When we write about litigation finance, we often assume it is easily accessible and that plaintiffs undertake most of the ‘leg work’ to secure financing.  In practice, litigation finance is often difficult to obtain, and plaintiffs typically rely quite heavily on their law firms to obtain it.  This is a very different dynamic than one sees in other areas of financial services. And because law firms may not have the expertise and bandwidth to properly broker a litigation funding transaction, their involvement in the process may be unintentionally short-changing their clients. With some law firms now entering contractual “tie-up” or “best friends” arrangements with favored funders, we thought this an opportune time to consider the law firm’s proper role in the litigation funding process.

This article will explore common but unexamined efforts by law firms to deal with funders, the practical challenges posed and suggest a preferred approach for law firms and their clients.

Executive Summary

  • Law firms may not have the practical expertise and competency to advise their clients on funding partners and terms
  • Similar to other asset classes, a specialist intermediary/broker community has emerged to assist plaintiffs/law firms

Slingshot Insights:

  • Plaintiffs should assess the potential for conflicts of interest in assessing their litigation finance
  • Law firms should ensure their clients are informed of their role and obtain waivers, where appropriate.
  • Plaintiffs should consider using an independent advisor to solicit litigation finance commitments for their case

Overview

As awareness of litigation finance grows in the U.S., law firms are increasingly confronted with the question of their appropriate role when engaging with litigation funders.  Because law firms are a primary source of new funding deals, top law firms are repeatedly approached by litigation funders in hopes of striking “strategic” relationships.  Law firms have responded to these advances in various ways – from informal promises of future consideration to formal agreements to refer their clients to a given funder.

For example, in June 2021 a major U.S. firm announced a “$50 million partnership” with a prominent litigation funder.  While it is unclear if any cases have been funded under the deal, the law firm said that the funder’s monies would be used to pay their fees for legal claims brought by their clients.  Two months later, a major UK firm stuck a deal with two UK funders to create a new entity that will provide that law firm with access to GBP 150 million in litigation financing for new cases.  The very next month, a similar “best friends” deal for the same amount was struck between another UK firm and a UK funder.[1]  A Financial Times article describing these and other “tie-ups” highlighted the fact that lawyers are duty-bound to act in the best interests of their clients, and that a partnership between a law firm and a funder adds a potential conflict of interest to the mix.

While no doubt driven by good intentions, efforts by law firms to “help” in the litigation funding process may in fact hurt their client’s interests.  As argued below, great care should be taken by law firms to avoid being viewed as “steering” clients to favored funders.  Such efforts – especially when a law firm has a public contractual relationship with a funder – may actually interfere with their clients’ chances to obtain funding.  Examined closely, practical considerations suggest that a law firm’s best approach is to stay within its role as legal counsel and to avoid any involvement in actively brokering or placing litigation financing.  Both clients and their law firms would be better served by working with the growing number of consultants and intermediaries who are dedicated to the litigation finance market.

The Issue

The U.S. litigation finance market is more competitive today than ever before.  Over the past ten years, the number of dedicated “litigation funders” has grown significantly and the market has started to specialize.  Add to this the increasing number of hedge funds which invest in litigation as part of their multi-strategy approach, and there has never been a better time to shop for litigation finance.  Clients are now able – on their own or with an experienced broker – to evaluate a broad array of funders to ensure they receive optimal pricing and competitive deal terms.  In this way, classic market forces reward both those seeking and those providing funding.

But this promise of optimal arrangements via competition is increasingly hindered by the efforts of law firms to “assist” their clients with funding.  By directing their clients to the firm’s preferred funder (or a limited number of funders with whom it is already acquainted), many law firms may be robbing their clients of the opportunity to survey the broader market, and to thus strike a better deal.  In practice, law firms are not ideally suited to the role of assessing the growing number of funders and undertaking the brokering of litigation finance – nor would they wish to be viewed as being in that business, as we will discuss further below.

Background

Most U.S. plaintiffs seeking litigation funding are new to the practice.  This is because funding is still relatively novel – and because few clients have successive claims worth tens of millions of dollars while lacking financial resources. While there are exceptions to this rule – particularly in the patent litigation context – most plaintiffs seeking funding are doing so for the first and last time.

As such, these clients are presumably unfamiliar with the arduous process of obtaining litigation finance.  Without guidance, they have no notion of which funders to speak to, how to price a proposed transaction, the ‘tells’ that funders communicate when they are assessing opportunities or what other matters to be concerned with.  It’s thus natural that these inexperienced clients turn to their law firms for advice on how to secure funding.

And law firms are generally quite happy to assist their clients in this regard – if for no other reason than they stand to receive millions in legal fees if funding is secured.  In fact, it’s typical for law firms and their client to approach third-party funders together: they have established a mutual desire to work together, see themselves as aligned in interest, and simply need financing to pay the legal fees and costs to launch their promising case. In this sense and at a high level, there is great alignment between what is best for the law firm (current and contingent fees), what is best for the client (a potential award with minimal cash outlay) and what is best for the funder (a rate of return on their investment commensurate with the risk they have assumed).

A law firm’s approach to the market – and recommendation of specific funders – will likely depend in part on the firm’s prior experience with funders. This experience may range from:

  • Having been pitched by funders, but not having sought financing;
  • Having unsuccessfully sought financing on one or more occasions;
  • Having successfully obtained financing for its clients from one or more funders;
  • Having successfully obtained financing for the firm itself from one or more funders; and/or
  • Having executed an arrangement with a funder where the law firm has pledged to send its clients and prospective clients to that funder (a so-called “best friends” arrangement – which is becoming increasingly common).

It follows that the deeper the law firm’s prior experience with funding – especially if it has a direct contractual or working relationship with a given funder – the more likely that firm is to direct its client to such a favored funder (or two).  While this may seem practical and helpful – and even advantageous for the client – this “steering” not only limits access to the broader market (as discussed below), but dangerously ignores the lack of alignment in interests between the client and the law firm.  While there is general alignment amongst the three parties, as referred to above, the question of whether the alignment maximizes the outcome for the plaintiff should be a significant consideration for the plaintiff.

Lack of Market Experience of Law Firms Raises Practical Concerns

In fairness, most law firms are simply problem solving when they refer a client to a preferred funder. The process of obtaining funding is typically grueling, and the idea of working with a friendly and responsive funder seem obvious at first blush.  But even when a litigator takes an active role in the process – which raises many of the issues noted above – they are undertaking a typically uncompensated sideline which is well outside their core competency in the practice of law. The problems with this are severalfold.

First, the litigator working with the client – and it is almost always a litigator – will be at best an occasional and sporadic player in the litigation finance market.  As a result, their awareness of the range of options in the market (including hedge funds who do not typically visit her office with marketing literature) will necessarily be limited and may not include other tools such as insurance products or other hedging instruments.  It’s unreasonable to assume that a practicing litigator has the time to meet and evaluate the ever-increasing number of capital sources in the funding space.  Not only are there more entities offering funding – they are increasingly differentiating themselves.  Funders now vary based on the types of claims they fund, the size of investments they seek, and their underwriting process.  Critically, these funders also differ as regards the pricing structures they offer.  To be properly advised, a client should be made aware of the full range of growing options, which could extend beyond traditional litigation finance.

Second, litigation funding is a distinct form of specialty finance which raises unusual issues.  Without a firm grounding in the particulars of the practice, the typical law firm litigator is apt to overlook important questions, including ethical, regulatory, and taxation issues.  Not only are these issues unique to litigation finance, but they are often fluid, and require those in the industry to closely monitor developments.  It stands to reason that most litigators – who pursue funding only occasionally – will not maintain a constant focus on this dynamic industry.  As a result, they may well miss a trick – perhaps a critical one for their client.

Third, obtaining litigation funding takes a significant amount of time and effort.  The process will usually take two to three months – but it can often take double this.  Properly conducted, the process will involve the creation of introductory materials, initial diligence with at least five funders, the negotiation of deal structures, pricing, and terms sheets, comprehensive final diligence, and extensive deal documentation.  The time involved in running such a process should not be underestimated, and – as every deal maker knows – lack of responsiveness at any point in the process can quickly kill the enthusiasm for an investment.  Given that this “extra” work by a busy litigator is uncompensated and outside her ordinary practice, it would not be surprising if she is unable to give the process the proper attention demanded.

Before leaving the practical considerations of a law firm’s involvement in the funding process, we should consider one very significant downside of a so-called “best friends” agreement between a funder and law firm.  This is the awkward situation arising when a favored funder chooses not to fund a case for a firm’s client. As most cases that seek funding are denied – and as these agreements don’t promise funding unless a funder likes the risk of a given case – this result can occur frequently.  When it does, it deals a fatal blow to the client’s efforts to raise funding – for what other funder would choose to finance a case when the favored funder has passed?  Thus, what looked like a promising arrangement to a client may have fundamentally damaged his or her chances to obtain funding.  The law firm also needs to consider the impact a denial has on the relationship with his client.

In short, aside from potential conflict of interest concerns, law firms and their partners are not practically suited to spend their time orchestrating the pursuit of funding for their clients.  There are better options available.

No Need to Reinvent the Wheel

Given the above, what is a law firm and its client to do when seeking litigation funding?  Or, perhaps more clearly – how can a law firm and its client gain access to the whole of the market, avoid any potential conflict of interest concerns, and ensure they secure financing with the best possible pricing and terms?

When discussing nascent markets, it’s often instructive to look at other, more mature markets to see how they have dealt with similar situations in the past, either voluntarily or in response to regulation.  In the context of litigation finance, we think there are a number of similar – yet more mature – financial markets that can usefully be compared.

If we look at private equity (venture, leverage buy-out, real estate, etc.) as a proxy, there is and has been a well-established network of advisors (investment bankers and brokers) that serve to increase the efficiency of the marketplace by connecting investors / lenders with shareholders / borrowers in a way that increases transparency and ensures that the best interests of the advised party are being met.

Similarly, if we look at commercial real estate, there are networks of licensed brokers that are hired to represent the best interests of the sellers by forcing them to adhere to industry standards and practices and run sale processes to ensure the market is being adequately canvassed for buyers on behalf of the seller.

The same solution exists for litigation finance in the form of independent advisors who are knowledgeable in litigation finance, and whose interests will be solely aligned with the client.  This option is often overlooked, however, because the relationship between the law firm and the client is one of ‘trusted advisor’, and clients naturally assume the law firm will look after their best interests.  While that is often the case, plaintiffs can seek to eliminate the appearance of any potential conflict of interest by engaging a specialty advisor.  These advisors will canvass the litigation finance market and other funding sources for financial alternatives and present them to the client for consideration.  One of their objectives is to create competitive ‘tension’ in the market by running a process that ensures the best alternatives are presented, and the commitment is obtained in a timely manner.

The value of the advisor is typically inherent in their industry experience, the knowledge they possess (including relevant legal/litigation experience), the relationships they foster, the efficacy of the processes they run, the timeliness of receiving a commitment and their reputation in the marketplace.  Some of the benefits of using an advisor are as follows:

  • Ensuring that the full market of potential funders has been canvassed;
  • Having the client’s opportunity strategically presented to appropriate funders (based on the advisors’ knowledge of each funder’s diligence criteria);
  • Knowing what the “market” price is for different types of funding transactions;
  • Creating ‘tension’ in the capital raising process to produce the best outcome – for pricing and material terms;
  • Gaining support for negotiations of term sheets and deal documentation; and
  • Utilizing (if necessary) the advisor/broker as “bad cop” to obtain the optimal deal.

Perhaps as importantly, the use of an advisor will likely be more efficient and more economical for all parties involved.  This efficiency is a function of the advisor’s dedicated service to putting funding in place – which, as noted above, is a multi-month, multi-disciplinary undertaking.  As better advisors typically operate on a contingency model (i.e., they are not paid unless and until funding is secured), they are incentivized to move deals along briskly.  And while advisors will charge a contingent price for their services (typically paid by the funder in the first tranche of financing), this additional cost is usually more than made up in cost savings to the client – the result of lower pricing made possible by the advisor’s market knowledge and creation of a competitive process. Advisors for litigation finance are more easily found, as they are now rated by Chambers & Partners and other service providers to the legal community.

To be clear, law firms must continue to play a critical but discrete role in the funding process.  Working closely with an advisor, it is essential that the lawyers involved in a matter speak to the merits of the case, the potential damages to be gained, as well as issues of procedural posture, timing, and collection.  Moreover, every potential funder will be keen to assess the lawyers and law firm litigating the case to insure they have the experience and expertise required.  But by staying within their role as legal counsel – and allowing advisors to run the funding process – law firms will not only avoid any appearance of ethical conflict, but will save themselves time and money.

This article has been co-authored by Andrew Langhoff and Edward Truant.

Slingshot Insights

As the litigation finance market evolves, new issues will arise that will give pause for consideration.  The partnering of law firms with litigation funders is one of those issues that requires deep consideration by law firms, plaintiffs and funders, as inappropriate disclosures, lack of waivers and insufficient canvassing of the market may result in a series of unintended consequences which may result in litigation, ironically enough.  As this issue is relatively recent, we don’t have sufficient insight and precedent to determine how it will be viewed by the judiciary and law societies, but we can see how it differs from other industries and we can identify the potential for conflicts of interest.  As an investor in this sector, due diligence should include understanding the relationships the funder has with law firms.

As always, I welcome your comments and counter-points to those raised in this article.

 

 Andrew Langhoff is the founder of Red Bridges Advisors LLC and has been active in the litigation finance industry for more than a decade.  Following his time as COO of Burford Capital and Principal at Gerchen Keller Capital, Andrew founded Red Bridges to advise those seeking to obtain litigation finance.

 

 Edward Truant is the founder of Slingshot Capital Inc. and an investor in the consumer and commercial litigation finance industry.  Slingshot Capital inc. is involved in the origination and design of unique opportunities in legal finance markets, globally, investing with and alongside institutional investors.

[1] Interestingly, in yet another situation where a law firm created its own funding arm, it explicitly prohibited the use of such monies for the funding of its own cases.

Commercial

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Commercial People Moves

Therium Cuts UK Jobs as Part of Strategic Reorganisation

By Harry Moran |

Recent years have been described as a time of substantial growth and expansion in the global litigation funding market, yet new reporting suggests that one of the industry’s most well-known funders is downsizing its workforce.

An article in The Law Society Gazette provides a brief insight into ongoing changes being made at litigation funder Therium, reporting that the company is undertaking a number of layoffs as part of plans to restructure the business. The article states that these job cuts have been made to Therium’s UK workforce, with the business claiming the cuts are motivated by strategic reorganisation rather than financial pressures. 

There are no details currently available as to which employees have been let go, with Therium having removed the ‘Our People’ section of its website. The Gazette also discovered the incorporation of a new company called Therium Capital Advisors LLP on 15 April 2025, through a review of Companies House records. The new entity’s records list Therium’s chief investment officer, Neil Purslow, and investment manager, Harry Stockdale, as its two designated members. 

Companies House records also show that Therium filed a ‘termination of appointment of secretary’ for Martin Middleton on 19 March 2025. Mr Middleton’s LinkedIn profile currently lists his position as Therium’s chief financial officer, having first joined the funder as a financial controller over 15 years ago.

At the time of reporting, Therium has not responded to LFJ’s request for comment.

Commercial Special Features

Litigation Funding in GCC Arbitration

By Obaid Mes’har |

The following piece was contributed by Obaid Saeed Bin Mes’har, Managing Director of WinJustice.

Introduction

A Practical Overview

Third-party litigation funding (TPF)—where an external financier covers a claimant’s legal fees in exchange for a share of any resulting award—has gained significant traction in arbitration proceedings across the Gulf Cooperation Council (GCC). Historically, TPF was not widely used in the Middle East, but recent years have seen a notable increase in its adoption, particularly in the United Arab Emirates (UAE). The economic pressures introduced by the COVID-19 pandemic, coupled with the high costs of complex arbitrations, have prompted many parties to view TPF as an effective risk-management strategy. Meanwhile, the entry of global funders and evolving regulatory frameworks highlight TPF’s emergence as a key feature of the GCC arbitration landscape.

Growing Adoption

Although the initial uptake was gradual, TPF is now frequently employed in high-value disputes across the GCC. Observers in the UAE have noted a discernible rise in funded cases following recent legal developments in various jurisdictions. Major international funders have established a presence in the region, reflecting the growing acceptance and practical utility of TPF. Similar growth patterns are evident in other GCC countries, where businesses have become increasingly aware of the advantages offered by third-party financing.

By providing claimants with the financial resources to pursue meritorious claims, third-party funding is reshaping the dispute-resolution landscape. As regulatory frameworks evolve and more funders enter the market, it is anticipated that TPF will continue to gain prominence, offering both claimants and legal professionals an alternative means of managing arbitration costs and mitigating financial risk.

Types of Cases

Funders are chiefly drawn to large commercial and international arbitration claims with significant damages at stake. The construction sector has been a key source of demand in the Middle East, where delayed payments and cost overruns lead to disputes; contractors facing cash-flow strain are increasingly turning to third-party funding to pursue their claims. High-stakes investor–state arbitrations are also candidates – for instance, in investment treaty cases where a government’s alleged expropriation deprives an investor of its main asset, funding can enable the claim to move forward . In practice, arbitration in GCC hubs like Dubai, Abu Dhabi, and others is seeing more funded claimants, leveling the field between smaller companies and deep-pocketed opponents.

Practical Utilization

Law firms in the region are adapting by partnering with funders or facilitating introductions for their clients. Many firms report that funding is now considered for cases that clients might otherwise abandon due to cost. While precise data on usage is scarce (as most arbitrations are confidential), anecdotal evidence and market activity indicate that third-party funding, once rare, is becoming a common feature of significant arbitration proceedings in the GCC. This trend is expected to continue as awareness grows and funding proves its value in enabling access to justice.

Regulatory Landscape and Restrictions on Third-Party Funding

UAE – Onshore vs. Offshore

The United Arab Emirates illustrates the region’s mixed regulatory landscape. Onshore (civil law) UAE has no specific legislation prohibiting or governing litigation funding agreements . Such agreements are generally permissible, but they must not conflict with Sharia principles – for example, funding arrangements should avoid elements of excessive uncertainty (gharar) or speculation . Parties entering funding deals for onshore cases are cautioned to structure them carefully in line with UAE law and good faith obligations. In contrast, the UAE’s common-law jurisdictions – the Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM) – explicitly allow third-party funding and have established clear frameworks.

The DIFC Courts issued Practice Direction No. 2 of 2017, requiring any funded party to give notice of the funding and disclose the funder’s identity to all other parties . The DIFC rules also clarify that while the funding agreement itself need not be disclosed, the court may consider the existence of funding when deciding on security for costs applications and retains power to order costs against a funder in appropriate cases. Similarly, the ADGM’s regulations (Article 225 of its 2015 Regulations) and Litigation Funding Rules 2019 set out requirements for valid funding agreements – they must be in writing, the funded party must notify other parties and the court of the funding, and the court can factor in the funding arrangement when issuing cost orders . The ADGM rules also impose criteria on funders (e.g. capital adequacy) and safeguard the funded party’s control over the case .

In sum, the UAE’s offshore jurisdictions provide a modern, regulated environment for third-party funding, whereas onshore UAE allows it in principle but without detailed regulation.

Other GCC Countries

Elsewhere in the GCC, explicit legislation on litigation funding in arbitration remains limited, but recent developments signal growing acceptance. Saudi Arabia, Qatar, Oman, and Kuwait do not yet have dedicated statutes or regulations on third-party funding . However, leading arbitral institutions in these countries have proactively addressed funding in their rules. Notably, the Saudi Center for Commercial Arbitration (SCCA) updated its Arbitration Rules in 2023 to acknowledge third-party funding: Article 17(6) now mandates that any party with external funding disclose the existence of that funding and the funder’s identity to the SCCA, the tribunal, and other parties . This ensures transparency and allows arbitrators to check for conflicts. 

Likewise, the Bahrain Chamber for Dispute Resolution (BCDR) included provisions in its 2022 Arbitration Rules requiring a party to notify the institution of any funding arrangement and the funder’s name,, which the BCDR will communicate to the tribunal and opponents . The BCDR Rules further oblige consideration of whether any relationship between the arbitrators and the funder could compromise the tribunal’s independence. These rule changes in Saudi Arabia and Bahrain align with international best practices and indicate regional momentum toward formal recognition of third-party funding in arbitration.

Disclosure and Transparency

A common thread in the GCC regulatory approach is disclosure. Whether under institutional rules (as in DIAC, SCCA, BCDR) or court practice directions (DIFC, ADGM), funded parties are generally required to disclose that they are funded and often to reveal the funder’s identity . For instance, the new DIAC Arbitration Rules 2022 expressly recognize third-party funding – Article 22 obliges any party who enters a funding arrangement to promptly inform all other parties and the tribunal, including identifying the funder. DIAC’s rules even prohibit entering a funding deal after the tribunal is constituted if it would create a conflict of interest with an arbitrator. This emphasis on transparency aims to prevent ethical issues and later challenges to awards. It also reflects the influence of global standards (e.g. 2021 ICC Rules and 2022 ICSID Rules) which likewise introduced funding disclosure requirements.

Overall, while no GCC jurisdiction outright bans third-party funding, the patchwork of court practices and arbitration rules means parties must be mindful of the specific disclosure and procedural requirements in the seat of arbitration or administering institution. In jurisdictions rooted in Islamic law (like Saudi Arabia), there is an added layer of ensuring the funding arrangement is structured in a Sharia-compliant way (avoiding interest-based returns and excessive uncertainty. We may see further regulatory development – indeed, regional policymakers are aware of litigation funding’s growth and are considering more formal regulation to provide clarity and confidence for all participants .

The GCC region has seen several important developments and trends related to third-party funding in arbitration:

  • Institutional Rule Reforms: As detailed earlier, a number of arbitral institutions in the GCC have updated their rules to address third-party funding, marking a significant trend. The Dubai International Arbitration Centre (DIAC) 2022 Rules, the Saudi SCCA 2023 Rules, and the Bahrain BCDR 2022 Rules all include new provisions on funding disclosures. This wave of reforms in 2022–2023 reflects a recognition that funded cases are happening and need basic ground rules. By explicitly referencing TPF, these institutions legitimize the practice and provide guidance to arbitrators and parties on handling it (primarily through mandatory disclosure and conflict checks). The adoption of such rules brings GCC institutions in line with leading international forums (like ICC, HKIAC, ICSID, etc. that have also moved to regulate TPF).
  • DIFC Court Precedents: The DIFC was one of the first in the region to grapple with litigation funding. A few high-profile cases in the DIFC Courts in the mid-2010s involved funded claimants, which prompted the DIFC Courts to issue Practice Direction 2/2017 as a framework. This made the DIFC one of the pioneers in the Middle East to formally accommodate TPF. Since then, the DIFC Courts have continued to handle cases with funding, and their decisions (for example, regarding cost orders against funders) are building a body of regional precedent on the issue. While most of these cases are not public, practitioners note that several DIFC proceedings have featured litigation funding, establishing practical know-how in dealing with funded parties. The DIFC experience has likely influenced other GCC forums to be more accepting of TPF.
  • Funders’ Increased Presence: Another trend is the growing confidence of international funders in the Middle East market. Over the last couple of years, top global litigation financiers have either opened offices in the GCC or actively started seeking cases from the region. Dubai has emerged as a regional hub – beyond Burford, other major funders like Omni Bridgeway (a global funder with roots in Australia) and IMF Bentham (now Omni) have been marketing in the GCC, and local players or boutique funders are also entering the fray . This increased competition among funders is good news for claimants, as it can lead to more competitive pricing and terms for funding. It also indicates that funders perceive the GCC as a growth market with plenty of high-value disputes and a legal environment increasingly open to their business.
  • Types of Arbitrations Being Funded : In terms of case trends, funded arbitrations in the GCC have often involved big-ticket commercial disputes – for example, multi-million dollar construction, energy, and infrastructure cases. These are sectors where disputes are frequent and claims sizable, but claimants (contractors, subcontractors, minority JV partners, etc.) may have limited cash after a project soured. Third-party funding has started to play a role in enabling such parties to bring claims. There have also been instances of investor-state arbitrations involving GCC states or investors that utilized funding (though specific details are usually confidential). The Norton Rose Fulbright report notes that funding is especially helpful in investor-treaty cases where an investor’s primary asset was taken by the state, leaving them dependent on external financing to pursue legal remedies.

As GCC countries continue to attract foreign investment and enter into international treaties, one can expect more ICSID or UNCITRAL arbitrations connected to the region – and many of those claimants may turn to funders, as is now common in investment arbitration globally.

  • Emerging Sharia-Compliant Funding Solutions: A unique trend on the horizon is the development of funding models that align with Islamic finance principles. Given the importance of Sharia law in several GCC jurisdictions, some industry experts predict the rise of Sharia-compliant litigation funding products. These might structure the funder’s return as a success fee in the form of profit-sharing or an award-based service fee rather than “interest” on a loan, and ensure that the arrangement avoids undue uncertainty. While still nascent, such innovations could open the door for greater use of funding in markets like Saudi Arabia or Kuwait, by removing religious/legal hesitations. They would be a notable evolution, marrying the concept of TPF with Islamic finance principles – a blend particularly suitable for the Gulf.

Overall, the trajectory in the GCC arbitration market is clear: third-party funding is becoming mainstream. There have not been many publicly reported court challenges or controversies around TPF in the region – which suggests that, so far, its integration has been relatively smooth. On the contrary, the changes in arbitration rules and the influx of funders point to a growing normalization. Businesses and law firms operating in the GCC should take note of these trends, as they indicate that funding is an available option that can significantly impact how disputes are fought and financed.

Conclusion

Litigation funding in the GCC’s arbitration arena has evolved from a novelty to a practical option that businesses and law firms ignore at their peril. With major arbitration centers in the region embracing third-party funding and more funders entering the Middle Eastern market, this trend is likely to continue its upward trajectory. 

For businesses, it offers a chance to enforce rights and recover sums that might otherwise be forgone due to cost constraints. For law firms, it presents opportunities to serve clients in new ways and share in the upside of successful claims. Yet, as with any powerful tool, it must be used wisely: parties should stay mindful of the legal landscape, comply with disclosure rules, and carefully manage relationships to avoid ethical snags. 

By leveraging litigation funding strategically – balancing financial savvy with sound legal practice – stakeholders in the GCC can optimize their dispute outcomes while effectively managing risk and expenditure. In a region witnessing rapid development of its dispute resolution mechanisms, third-party funding stands out as an innovation that, when properly harnessed, aligns commercial realities with the pursuit of justice.

At WinJustice.com, we take pride in being the UAE’s pioneering litigation funding firm. We are dedicated to providing innovative funding solutions that enable our clients to overcome financial hurdles and pursue justice without compromise. By leveraging third-party litigation funding strategically—balancing financial acumen with sound legal practices—stakeholders in the GCC can optimize their dispute outcomes while effectively managing risk and expenditure.

If you are looking to maximize your dispute resolution strategy through expert litigation funding, contact WinJustice.com today. We’re here to help you navigate the evolving landscape and secure the justice you deserve.

Case Developments Commercial

European Commission Fines Apple €500m and Meta €200m for DMA Breaches

By Harry Moran |

Antitrust and competition claims brought against large multinational corporations often represent lucrative opportunities for litigation funders, and the announcement of a new series of fines being imposed on two of the world’s largest technology companies could set the stage for more of these claims being brought in Europe.

Reporting by Reuters covers a major antitrust development as the European Commission has handed down multimillion dollar fines to both Apple and Meta over their breaches of the Digital Markets Act (DMA). These fines follow non-compliance investigations that began in March 2024, with Apple receiving a €500 million fine for breaching its anti-steering obligation through the App Store, and Meta being fined €200 million for breaching the DMA obligation to allow consumers the option to choose a service that uses less of their personal data.

Teresa Ribera, Executive Vice-President for Clean, Just and Competitive Transition at the European Commission, said that the fines “send a strong and clear message”, and that the enforcement action should act as a reminder that “all companies operating in the EU must follow our laws and respect European values.”

In a post on LinkedIn, Gabriela Merino, case manager at LitFin, explained that these fines “mark the first non-compliance decisions issued by the Commission under the new regulatory framework.” As LFJ covered earlier this month, LitFin is funding a €900 million claim against Google in the Netherlands over its anti-competitive practices that were first brought to light by another European Commission investigation. Merino said that “these latest rulings are a welcome boost” to LitFin’s own case.

Statements from both Apple and Meta decried the fines, with the former arguing that the decision was “yet another example of the European Commission unfairly targeting Apple”. 

The full press release from the European Commission detailing the investigations and associated fines can be read here.