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Commercial Regulatory Issues

Tillis Tax Plan Could Gut U.S. Litigation Funding

By John Freund |

Sen. Thom Tillis’s bid to tack the “Tackling Predatory Litigation Funding Act” onto the Senate’s broad tax package has jolted the litigation-finance community. The North Carolina Republican frames his proposal as consumer protection, but funders say it targets them for punitive treatment just as capital flows into the sector to help plaintiffs and contingency-fee firms square off against deep-pocketed defendants.

An opinion piece in The Washington Times warns that the measure would “weaponize” the Internal Revenue Code. The bill would slap a 40.8 percent levy on “qualified litigation proceeds,” collected at the funding-vehicle level regardless of investor tax status. Any arrangement that “creates a direct or collateralized interest” in case outcomes is swept in—including law-firm loans carrying interest above seven percent. Losses, NOLs and routine expenses could not offset gains, and the tax would reach back to deals inked before 2026 if profits are realized afterward.

Supporters such as former Treasury official James Carter claim the change would close what they see as a loophole allowing foreign investors to harvest U.S. judgments tax-free, projecting $3.5 billion in new revenue over ten years. Detractors—among them NYU tax scholar Gregg Polsky—call the bill a “kill shot” that ignores existing capital-gains rules, punishes pension funds and endowments, and sets a dangerous precedent for targeting disfavored industries through confiscatory rates.

Should the Tillis language survive conference, after-tax returns for U.S. funders could be cut nearly in half overnight, chilling new commitments and driving capital offshore. The industry’s response—mobilizing heavyweight lobbyists and building bipartisan coalitions—will test whether its growing economic footprint can translate into political clout on Capitol Hill.

Commercial Special Features

An LFJ Conversation with Caroline Taylor, Founding Partner of Ignitis

By John Freund |
Caroline Taylor is a Founding Partner of Ignitis, an early-stage litigation funding company who provides seed funding for legal cases. Ignitis emerged to bridge the gap between legal case concepts and the crucial funding they require to proceed. Ignitis addresses this vital need by providing the early-stage capital and expertise necessary to initiate litigation in Europe, the UK, and beyond. At Ignitis, Caroline focuses on operations, case development, execution, and funding. Prior to starting Ignitis, Caroline was a partner at an international collective redress firm. She is admitted in various state and federal courts within the United States and is a Registered Foreign Attorney in England and Wales. Below is our LFJ Conversation with Caroline Taylor: What inspired you to join Ignitis, and how has your experience shaped your perspective on the legal funding industry?

When my co-founder and I were litigators, we kept running into a “chicken-and-egg” dilemma: it takes capital to investigate, plead, and evidence a claim, yet most funders will not release significant capital until that work is already complete. Ignitis was created to bridge that gap. We deploy funds at the riskiest, earliest stage, when key questions still need answers, so our clients can generate the data points future funders require. That litigation experience is baked into everything we do, from how we assess cases to the speed at which we commit capital.

Can you describe some of the unique challenges your clients face and how Ignitis addresses them?

Every client faces a need for initial funding to unlock further case development such as expert analysis, merits opinions, damage opinions, and/or legal fees. Without that seed capital, even highly meritorious claims can stall. Ignitis supplies that early-stage capital quickly, allowing our clients to build out the factual and legal record, refine damages models, and position the matter for larger financing and filing.

How does Ignitis differentiate itself from other companies in the legal funding space?

  • Early-Stage Focus. Early-stage, high-risk funding is our core product. Our comfort in doing this is the result of years of litigating on risk through contingency fee structures such that we are very comfortable with case selection and early risk.
  • Decision Speed. Once we receive a complete information set, we aim to have an investment decision within days, giving our clients a genuine first-mover advantage.
  • End-to-End Support. Because we have lived the due-diligence grind ourselves, we help package the matter for later-stage funders and insurers, freeing lawyers to concentrate on litigation rather than capital raising.

What recent developments or innovations at Ignitis are you most excited about?

Specializing exclusively in early-stage funding has allowed us to build proprietary triage and diligence workflows. Coupled with a lean decision-making structure we can deploy capital faster than traditional funders can schedule an investment-committee meeting. The result is a nimble platform that adapts as the market evolves.

How do you see the future of legal funding evolving, and what role do you envision your company playing in that future?

The asset class is attracting an increasingly diverse pool of capital — family offices, credit funds, and insurers, not just dedicated litigation funders. By providing rigorous case development and structured risk-transfer tools (including tailored portfolio and insurance solutions), Ignitis converts what was once viewed as binary litigation risk into an investable, partially self-insured product. Our goal is to expand access to justice worldwide by matching meritorious claims with capital that understands and is comfortable with the underlying risk.

Commercial Deals

Omni Bridgeway Eyes Bangladesh Asset-Recovery Push

By John Freund |

Bangladesh’s interim government, led by Nobel laureate Muhammad Yunus, has launched an aggressive hunt for wealth allegedly spirited offshore during Sheikh Hasina’s 15-year rule. Central-bank governor and former IMF economist Ahsan H. Mansur says the campaign could target “tens of billions” across multiple jurisdictions, and he is canvassing up to US $100 million in third-party capital to pay the legal bills.

An article in The Asian Age reports that global funder Omni Bridgeway has already held a series of meetings in Dhaka and London with Mansur and executives from sixteen domestic banks to structure a bespoke vehicle that would finance asset-tracing, judgment enforcement and recovery of non-performing loans. Omni’s enforcement managing director Wieger Wielinga confirmed interest, citing the firm’s recent sovereign-award collections and its appetite for emerging-market risk. Mansur’s London visit earlier this month also included briefings with UK regulators on evidence-gathering and potential freezing orders.

The proposed fund would complement eleven “high-priority” probes already under way and could operate on a contingency-fee basis, shielding taxpayers from upfront legal spend while granting funders a share of any recovered sums. Critics inside Bangladesh warn that cash settlements with so-called “financial rogues” risk undercutting the anti-corruption mandate that powered the July 2024 revolution, while political opponents liken the plan to “outsourcing justice.”

If finalized, this mandate would rank among the largest sovereign asset-recovery financings to date, signaling widening acceptance of public-sector litigation funding across the Global South.

Commercial Deals

Deminor and Loopa Plot Germany’s Next Funding Phase

By John Freund |

Germany’s third-party funding market has evolved from a niche offshoot of insurance indemnity into a dynamic arena powered by collective-redress reforms and inbound capital. Practitioners say deal flow is rising as consumers leverage new opt-out mechanisms and corporates monetize dormant claims amid higher interest rates.

An article in CDR News chronicles how Deminor Litigation Funding, Latin-American entrant Loopa Finance and global heavyweight Omni Bridgeway are jockeying for market share while lawmakers debate caps on funder fees. Interviewees highlight a pivot toward portfolio deals and judgment-enforcement finance as Germany’s debtor-friendly regime forces sharper recoverability analytics. Law firms remain cautious after the Federal Court of Justice’s 2024 disclosure ruling left grey areas on privilege and control.

Observers foresee a surge in competition-damages and diesel-emissions claims once the EU’s Representative Actions Directive is fully transposed. Insurers—long the dominant capital providers—now face competition from specialist funds offering bespoke risk-sharing structures, while US and UK investors eye cross-border arbitration opportunities seated in Frankfurt and Düsseldorf.

Commercial Regulatory Issues

Commentary: 41 % Litigation-Finance Tax Would Backfire

By John Freund |

The Senate’s proposed 41 percent levy on litigation-finance profits “solves nothing besides optics” and risks driving up overall litigation costs, according to tax columnist Andrew Leahey.

A column in Bloomberg Law argues the bill misunderstands how funders realize returns, which often materialize years after cash outlays and only when cases prevail. That timing quirk means the nominal rate vastly overstates the real burden.

Leahey notes the draft also exempts foreign-state-backed funders, potentially inviting capital from “countries of concern” to fill any vacuum left by U.S. investors. He predicts that, if enacted, the measure would raise little revenue while prompting constitutional challenges under the Fifth and Fourteenth Amendments—particularly on grounds of discriminatory treatment and retroactivity.

For the legal-funding market, the column crystallizes several dangers: higher pricing for plaintiffs, larger settlement demands as investors recoup costs, and a shift toward opaque offshore vehicles not subject to U.S. oversight. Funders may therefore front-load deals before any retroactive effective date and step up advocacy for transparency-oriented reforms over punitive taxation.

Commercial Special Features

An LFJ Conversation with Kishore Jaichandani, Founder and Managing Director of CAVEAT CAPITAL

By John Freund |
Kishore Jaichandani is a founder and Managing Director of CAVEAT CAPITAL and an expert in litigation funding and related advisory services globally. He has a unique combination of financial and, legal acumen with having Bachelor of Law., Company Secretary, MBA (Finance) and CIMA qualifications and have rich professional experience working on these areas for more than 25 years. He assists law firms, corporates, and individuals globally in obtaining non-recourse financing for commercial litigation and arbitration cases. He is committed to creating value for lawyers and, their clients to have access to the information and expertise they need to negotiate fair funding agreements in the event of litigation in the competitive legal market. His expertise includes developing financial solutions to help law firms and big corporations to mitigate risk, and achieve their growth strategies, including using litigation portfolios as collateral for off-balance sheet working capital, and monetizing litigation and judgments. Below is our LFJ Conversation with Kishore Jaichandani:

You've spent decades in corporate finance and investment management before founding CAVEAT CAPITAL. What gaps in the dispute-finance market did you see from that vantage point, and how does your traditional finance background influence the way you underwrite and structure litigation-funding deals today?

Coming from a background in corporate finance and investment management, I saw a significant disconnect between the legal world’s approach to dispute resolution and the way capital markets assess risk and return. Many claims with strong legal merit were overlooked because they lacked financial packaging that investors could understand and trust.

When I founded Caveat Capital, I wanted to bridge that gap. My training and experience in structured finance, risk allocation, and asset modeling helps us treat legal claims as investable instruments. At Caveat Capital, we apply commercial due diligence standards, build funding memoranda that speak to capital providers in their language, and structure deals with clear risk-sharing, milestones, and contingencies. In essence, we bring investment discipline to a domain often driven purely by legal instinct.

CAVEAT CAPITAL is a litigation-funding consultancy in the Middle East. What regulatory or cultural hurdles have you encountered in bringing third-party funding to claimants and law firms across the GCC and wider MENA region, and where do you see the biggest growth opportunities over the next five years?

The regulatory landscape across the GCC and MENA region is still evolving when it comes to third-party funding. There’s a historical conservatism—both cultural and legal—around external financing of disputes, particularly in jurisdictions without codified frameworks. However, we’re seeing a shift, especially in arbitration-centric hubs like the DIFC, ADGM and DIAC, which have explicitly recognized third-party funding.

Culturally, there’s also a learning curve. Many claimants and law firms are unfamiliar with the mechanics of litigation finance, or associate it with loss of control. At Caveat Capital, our role often begins with education—demystifying the process and building trust on both sides.

As for growth, I see major opportunities in sovereign-commercial disputes, infrastructure claims, and enforcement actions across the GCC. As regional economies diversify and dispute volumes rise, the demand for smart, risk-sharing capital will grow exponentially.

Unlike many capital providers, CAVEAT CAPITAL sits between claimants and funders as an independent adviser—from drafting funding memoranda to negotiating term sheets. How do you balance neutrality with advocacy in that role, and what does a “successful” engagement look like for you and your clients?

Balancing neutrality with advocacy is the cornerstone of our model. We’re not aligned to one capital source or fund; our fiduciary duty is to the commercial success of the deal. That means we must present the claim with honesty and rigor—highlighting both strengths and weaknesses—to ensure funders can price risk accurately and sustainably.

A successful engagement is one where all stakeholders feel heard, the terms are balanced, and the funding leads to a fair and enforceable resolution. We’re proudest when we unlock funding for a claim that may have otherwise gone unfunded—not by overselling, but by translating complexity into commercial clarity.

Your firm was named “Global Litigation Funding & Advisory Firm of the Year” at the 5th Global Legal Association Conference in Dubai. What differentiators—whether in case selection, risk analytics, or stakeholder management—do you believe earned CAVEAT CAPITAL that recognition, and how will you build on it?

That recognition affirmed the value of our differentiated approach. We focus on bespoke structuring, funder-agnostic matchmaking, and deep regional knowledge—especially in jurisdictions where funding is emerging, not established. Our ability to navigate both the legal and financial sides of a deal—while bridging cultural and jurisdictional nuances—is what sets us apart.

We also apply a multi-metric risk model that considers not just legal merits but recovery pathways, enforceability, counterparty behavior, and geopolitical exposure. Going forward, we’re investing in technology, cross-border enforcement networks, and regional educational outreach to strengthen the funding ecosystem across emerging markets.

You’ve written about the disruptive impact of AI on litigation finance. Which emerging technologies do you think will most materially change case-assessment accuracy or deal economics, and how is CAVEAT CAPITAL preparing to integrate those tools into its workflow?

AI will change litigation finance in three major areas: predictive analytics, document review, and portfolio modeling. Tools that analyze prior judgments, jurisdictional patterns, and tribunal behaviors are already helping improve case scoring. When layered with machine learning, they offer faster, data-informed decisions that were previously reliant on human judgment alone.

At Caveat Capital, we’re partnering with LegalTech providers to build internal dashboards that combine predictive analytics with our human-led risk matrices. We're also exploring tools for ongoing case monitoring—tracking timelines, budget burn, and procedural triggers in real time. The future is hybrid: AI-augmented human judgment, not AI replacing it.

Case Developments Commercial

Burford Counters Tyson Foods Over Chicken-Price Settlement Fight

By John Freund |

Burford Capital has moved to knock out Tyson Foods’ interference lawsuit, telling an Illinois federal judge that the meat-packing giant—not the world’s largest litigation financier—scuttled talks to resolve sprawling chicken price-fixing claims brought by food distributor Sysco. In a motion to dismiss filed this week, Burford branded Tyson’s allegations of settlement meddling as “threadbare” speculation aimed at diverting attention from the underlying antitrust accusations.

An article in Reuters details Tyson’s April complaint accusing Burford of trying to “co-opt the legal system” by blocking a deal Sysco had weighed. Tyson says the funder leveraged its $140 million financing stake to push for a richer payout, impeding Sysco’s autonomy in the long-running poultry cartel litigation.

Burford’s filing counters that its 2019 funding agreement explicitly allows the financier to participate in settlement talks and notes Tyson rejected Sysco’s last offer back in 2021. After Burford thwarted what it viewed as sub-par settlements, Sysco transferred its claims to Burford affiliate Carina Ventures, removing the food-service giant from the case while preserving its potential recovery.

The skirmish comes as congressional Republicans revive proposals to tax litigation-finance proceeds at nearly 41%, underscoring a season of heightened scrutiny over how much influence funders wield in antitrust and class actions. Burford, which has repeatedly defended its model as bolstering access to justice, says Tyson’s suit would chill capital-backed claims by re-writing freely negotiated contracts after the fact.

For funders, the outcome may clarify how far investment contracts can reach into settlement strategy—especially when the underlying defendant wants a bargain exit. If Burford prevails, expect financiers to lean harder on contractual rights; if Tyson scores traction, future deals could feature stricter carve-outs to avoid similar challenges.

Commercial Regulatory Issues

Litigation Capital Management Dissects CJC Funding Overhaul

By John Freund |

Regulatory upheaval is back on the agenda in London. Litigation Capital Management (LCM) has published a punch-by-punch analysis of the Civil Justice Council’s long-awaited Final Report on Litigation Funding, released earlier this month. The Working Party’s 58 recommendations include reversing PACCAR via legislation, imposing case-specific capital-adequacy tests, mandating early disclosure of funder identity and ultimate capital source, and introducing a “comprehensive but light-touch” statutory regime to replace today’s voluntary code.

In an article in Lexology, Sarah Webster of LCM notes that some proposals—such as exempting arbitration from the new rules and declining to cap funder returns—will please investors. Others, LCM argues, risk spawning “significant satellite litigation” and dampening appetite: an unenforceability penalty for regulatory breaches could hand defendants leverage to unravel funding deals mid-stream, while forcing disclosure of every ultimate investor may chill fundraising.

Additional layers for consumer and opt-out class actions would require independent KC advice and court sign-off on funder returns, potentially elongating timelines and increasing costs. Nonetheless, LCM welcomes recommendations to make funding costs recoverable in “exceptional circumstances” and to establish a standing data-collection committee that could inject empirical rigour into future policy debates.

Taken together, the Report sketches the most sweeping overhaul of third-party funding anywhere in the common-law world. Whether Westminster enacts the package—and how swiftly—now becomes the trillion-pound question.

Announcements Commercial Legal Innovation

Sentry Expands Free Funding Market Search for Litigators

By John Freund |

Sentry Funding’s free tool enabling litigators to instantly search the funding market on behalf of clients has been expanded.

Sentry’s free ‘decision in principle’ feature enables lawyers to evidence to clients that they have conducted a broad market search, even if funding is not ultimately taken out.

Having deployed £125m in funding across a range of case types, Sentry now has access to an even broader funding marketplace, covering 34 global jurisdictions. Finance is provided by 13 funders, five of which are members of the Association of Litigation Funders.

With the recent addition of Sentry’s first US-based funder, the US offering will now be expanding over the next few months. 

A faster process

Sentry has deployed the latest technology to make the search for funding even easier. 

  • The intuitive application process now only asks questions relevant to previous answers, saving lawyers time.
  • The commercial marketplace has been redeveloped with 63 new data points added to the funder criteria matrix - improving the accuracy of case / funder matching
  • Sentry has also begun building out its AI capabilities, starting with an automated auditing tool for live case progression audits. 

Tom Webster, chief executive officer at Sentry Funding, said:

‘By broadening our reach and speeding up the process, we’re making it even easier for lawyers to raise funding. We’re also giving litigators an easy way to show clients they have fully researched the market, rather than just approaching one or two funders. 

‘The service is free to use, so even if clients decide they do not ultimately want funding or if none is available for that case, for the lawyer, it makes sense to use our “decision in principle” feature, so they can put evidence on file that they did check the market.’

Sentry Funding is an SaaS (software as a service) technology provider that gives solicitors access to a diverse marketplace of litigation funders. It works with solicitors, funders and third-party providers to ensure claimants are getting the most efficient service for their funding needs. 

The Sentry Portal also acts as a case management system that runs a transparent digital case file for solicitors, funders, after-the-event insurance providers, barristers, cost lawyers and other relevant third parties.