Day 1 of the LF Dealmakers conference has begun. The opening panel saw Ted Farrell, founder of Litigation Funding Advisors, moderate a wide-ranging discussion on the state of legal finance. Panelists included James Bedell, Associate Director of Legal Finance at Yieldstreet, Cindy Chen Delano, Partner at Invictus Global Management, Stephen Kyriacou, Managing Director of Aon, and Michael Nicolas, Co-Founder and Managing Director of Longford Capital. The discussion began with the evolution of the sector as a maturing asset class, away from discussions between ‘smart lawyers’ and into the mainstream. The panel underscored the range of players in the space now—3M, J&J, and others—which illustrates how far the industry has come. Additionally, the size and scope of claims—large-scale, nine-figure claims—which highlights the impact the asset class has had on the broader Legal Services sector. Additionally, the embrace of litigation funding by Big Insurance is a signal of the industry’s ongoing growth prospects. Michael Nicolas of Longford noted how his firm can now protect principal investment, and even some of the profit they’d like to return to investors, which is ‘a game changer,’ as now credit investors can consider becoming LPs because they can grow more comfortable with the risk profile of the sector. Cindy Chen Delano echoed the ‘game-changer’ remark, noting the different types of debt structures that can be originated now that insurance is on board, all the way up to high-yield bonds, which she sees coming down the pike. Stephen Kyriacou of Aon also pointed out how he was one of two insurance providers at last year’s conference, and there was no discussion of the subject. This year, there are more insurers in attendance, and the subject has already come up in the first discussion, and will continue to as the event progresses. Perhaps something unique about this conference is the encouragement of questions from the audience. The first panel took a question from an inventor who stressed the importance of funding in the inventor space, and lamented that in his experience it’s been so difficult to obtain the financing needed. The panel acknowledged his concern, and noted the industry’s emphasis on IP investment, while also pointing out that selectivity is paramount if a funder is going to survive long-term.
The following article was contributed by Dr. Avv. Gian Marco Solas[1], founder of Sustainab-Law and author of Third Party Funding, New Technologies and the Interdisciplinary Methodology as Global Competition Litigation Driving Forces (Global Competition Litigation Review, 1/25). Dr. Solas is also the author of Third Party Funding, Law Economics an Policy (Cambridge Press).
There is an inaccurate and counterproductive belief in the litigation funding market, that the asset class would be uncorrelated from the global economy. That was in fact due to a much bigger scientific legal problem, that the law itself was not considered as physical factor of correlation, as instrument to measure and determine cause and effects of economic events in legal systems.
This problem has been solved, in both theoretical and mathematical terms, and in fact – thanks to technology available to date such as AI and blockchain – it looks much better for litig … ehm … legal third-party funders.
AI allows to detect and file claims that would otherwise not have been viable / brought forward, such as unlocked competition law claims[2], which represent the largest chunk of the market for competition claims. See funding proposal.
Human law as factor of correlation allows to calculate the unexpressed value of the global economy. Everything that, in fact, can be unlocked with litigation, allowing then a public-private IPO type of process to optimize legal systems[3].
Physical modeling of the law also allows to transform debt / liabilities into new investments, thus allowing to settle litigation earlier and with less legal costs, leaving more room to creativity to optimize the investments[4].
While it may be true that the outcome of one single judgement does not depend on the fluctuations of the financial economy, legal reality certainly determines the ups and downs of the litigation funding (and any other) market. Otherwise, we could not explain the rise of litigation funding in the post-financial crisis for instance, or the shockwaves propagated by judgements like PACCAR.
The flip side is that understanding and measuring legal reality, as well as leveraging on modern technologies and innovative legal instruments, the market for legal claims and legal assets is much bigger and sizeable than with the standard litigation financial model.
In order to test Litigation Funding 3.0, I am presenting the following proposal:
10 MILLION EUR in the form of a series A venture capital type of investment to cover one test case's litigation costs, tech, book-building and expert costs aimed at targeting three already identified global or multi-jurisdictional mass anticompetitive claims in the scale of multi-billion dollars, whose details will be provided upon request.
Funder(s) get:
Percentage of claims' return as per agreement with parties involved;
Property of the AI / blockchain algorithm;
License of TPF 3.0.
The funding does not cover: additional legal / litigation / expert / etc. costs.
AI: Artificial Intelligence ML: Machine Learning TPF: Third Party Funding
GENERAL SCENARIO FOR COMPETITION LAW DAMAGE CLAIMS – IN SHORT
Competition authorities around the globe are rapidly developing AI / ML tools to scan markets / economy and prosecute anti-competitive practices. This suggests a steep increase in competition claims in the coming years, in both volume and scope. AI also reduces the costs and time of litigation and ML allows to better assess its risks and merit, prompting for a re-modelling of the TPF economic model in competition claims considering empirical evidence of the first wave(s) of funded litigation.
Below is the abstract and table of contents from my research:
Abstract
This article aims at fostering competition litigation and market analysis by integrating concepts borrowed from physics science from an historical legal and evolutionary perspective, taking the third party funding (TPF) market as benchmark. To do so, it first combines historical legal data and trends related to the legal and litigation markets, discussing three macro historical trends or “states”: Industrial revolution(s) and globalisation; enlargement of the legal world; digital revolution and liberalisation of the legal profession. It then proposes the multidisciplinary methodology to assess the market for TPF: mainstream economic models, historical “cyclical” data and concepts borrowed from physics, particularly from mechanics of fluids and thermodynamics. On this basis, it discusses the potential implication of such methodology on the global competition litigation practice, for instance in market analysis and damage theory, also by considering the impact of modern technologies. The article concludes that physics models and the interdisciplinary methodology seem to add value to market assessment and considers whether there should be a case for a wider adoption in (competition) litigation and asset management practices.
-- 1. Italian / EU qualified lawyer and legal scientist. Leading Expert at BRICS Competition Law & Policy Centre (Higher School of Economics, Moscow). Ph.D.2 (Maastricht Law School, Economic Analysis of Law; University of Cagliari, Comparative Law) – LL.M. (College of Europe, EU competition Law). Visiting Fellow at Fordham Law School (US Antitrust), NYU (US Legal finance and civil procedure).
2. G. M. Solas, ‘Third Party Funding, new technologies and the interdisciplinary methodology as global competition litigation driving forces’ (2025) Global Competition Litigation Review, 1.
3. G. M. Solas, ‘Interrelation of Human Laws and Laws of Nature? Codification of Sustainable Legal Systems’ (2025) Journal of Law, Market & Innovation, 2.
US personal injury law firms are leading a push to open the doors to private equity investment in the legal sector, even in the face of long-standing regulatory opposition to outside ownership of law practices.
According to the Financial Times, a growing number of US firms that built their practices around high-volume, billboard-driven mass tort and injury representation are quietly exploring capital injections from private equity firms. The motivation is fast growth, increased leverage, and the ability to scale operations rapidly, something traditional partner-owned firms have found difficult in a consolidating market.
The move represents a departure from the conventional owner-operator model historically favored by the legal profession, where practicing attorneys hold equity in their firms. Private capital could provide aggressive funding for marketing, case acquisition, litigation infrastructure, and operational expansion, enabling firms to ramp up nationwide acquisition of cases. Critics, however, warn that outside investors prioritizing returns could create pressure to maximize volume over client outcomes.
Private equity’s entrance into legal services is not entirely new, but the aggressive push by personal injury firms may mark a tipping point. If regulators and bar associations ease restrictions on non-lawyer ownership or passive investment, this could fundamentally reshape how US law firms are structured and financed.
For the legal funding industry, this trend signals a potential increase in demand for third-party litigation financing and capital partners. As firms leverage outside investments for growth and case volume, funding providers may find new opportunities or face increased competition.
A high-stakes dispute between insurers AmTrust and Sompo is unfolding in UK court, centered on a failed litigation funding scheme that left AmTrust facing an estimated £59 million in losses. At the heart of the case is whether Sompo, as the professional indemnity insurer of two defunct law firms, Pure Legal and HSS, is liable for the damages stemming from their alleged misconduct in the operation of the scheme.
An article in Law360 reports that AmTrust had insured the litigation funding program and is now pursuing Sompo for reimbursement, arguing that the liabilities incurred by Pure and HSS are covered under Sompo’s policies. The two law firms entered administration, leaving AmTrust to shoulder the financial burden. AmTrust contends that the firms breached their professional duties, triggering coverage under the indemnity policies.
Sompo, however, disputes both the factual and legal underpinnings of the claim. The insurer denies that any breach occurred and further argues that even if the law firms had acted improperly, their conduct would not be covered under the terms of the policies issued.
This case follows AmTrust’s recent resolution of a parallel legal battle with Novitas, another financial party entangled in the scheme. That settlement narrows the current dispute to AmTrust’s claim against Sompo.
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