A new salvo has been fired in the debate over transparency in litigation finance. Lawyers for Civil Justice (LCJ) has submitted a comment letter to the Advisory Committee on Civil Rules exposing what it says are extensive control provisions in third-party litigation funding (TPLF) contracts—contradicting funders’ public assertions of passivity.

A press release from Lawyers for Civil Justice highlights excerpts from nearly a dozen funding agreements, including contracts involving Burford Capital, that purportedly grant funders authority to select counsel, approve or reject settlements, and even continue litigation after the plaintiff exits the case. These “zombie litigation” provisions, LCJ argues, represent de facto control by financiers—despite repeated funder claims that they do not direct litigation strategy.

At stake is a proposed federal rule requiring disclosure of litigation funding agreements in civil cases. LCJ’s letter offers ammunition to supporters of mandatory disclosure, citing examples such as a Burford-Sysco agreement that bars settlement without funder consent, and an International Litigation Partners contract that allows the funder to issue binding instructions to attorneys. In one instance, a funder retained the right to continue litigation in its own name even after the plaintiff had withdrawn—raising red flags over who actually drives case outcomes.

Funders have long argued they are “passive investors” and do not “control legal assets.” But the LCJ analysis directly challenges these claims, suggesting a significant gap between public narrative and contractual reality.

If adopted, a federal disclosure rule would mark a seismic shift in how courts assess conflicts of interest and strategic control in funded litigation. For the legal funding industry, the debate underscores a pivotal question: can funders claim passivity while retaining the contractual tools of influence?

Editor's Note: A previous version of this article referenced Fortress in LCJ's letter. Fortress is only referenced in a single footnote, with no contracts or specific cases mentioned. We regret the error.

Initial reactions from major US law firms suggest that Burford Capital’s push to invest in firm-side operations via managed services organizations (MSOs) will be a tougher sell than the funder’s splashy rollout implied. While the model aims to channel outside capital into back-office functions like billing, HR, and tech — leaving the lawyer-owned entity to practice law — several BigLaw leaders question the need for new money and the wisdom of ceding any control to non-lawyer investors, however indirectly.

Bloomberg Law reports that Burford, which has deployed roughly $11 billion in traditional litigation finance since 2009, is courting select US firms with minority-stake proposals modeled on structures common in healthcare and accountancy. Hogan Lovells CEO Miguel Zaldivar flagged cultural and control concerns, while other leaders said partner capital and bank lending already cover priorities — including AI investments — without the governance trade-offs an MSO may entail.

Burford’s chief development officer, Travis Lenkner, countered that MSOs would be passive, contract-bound investors and could “unlock” equity value and free cash flow for tech, laterals, or even acquisitions. Notably, US megafirms have not publicly embraced the idea; investor appetite may skew toward boutiques and mid-sized firms, where a $25 million Catalex Network fund is already targeting MSO-style plays.

For litigation finance, the stakes are high. If MSOs catch on, funders could extend beyond case-by-case or portfolio deals into durable, annuity-like firm relationships that complement core financing. If BigLaw continues to demur — citing Model Rule 5.4 sensitivities and “who’s in charge” worries — the immediate opportunity could migrate to smaller platforms or remain centered in more permissive jurisdictions (e.g., the UK), where Burford previously took a 32% stake in PCB Litigation. Either way, today’s pushback underscores a growing question: will US law-firm ownership rules evolve fast enough for funders’ equity ambitions to move from pitch deck to practice?

The legal and financial pressures bearing down on 777 Partners have sharpened. A Delaware Chancery decision—unsealed August 18—orders the Miami-based investor and litigation funder into a limited receivership until it satisfies advancement obligations to a former executive. For an investor whose portfolio has spanned sports, aviation, and legal finance, the ruling adds court-supervised urgency to a cash-management dispute, with the magistrate imposing a conditional daily fine and appointing a receiver to enforce payment.

Ch-Aviation reports that the court rejected 777’s financial hardship arguments, finding the firm paid millions in other legal fees while deferring nearly $600,000 owed to the ex-CFO. The receivership, initially set for 59 days, may be extended if obligations remain unmet. LFI subsequently flagged the development for the disputes-finance community, noting the order’s narrow scope, but wider signaling effect for counterparties assessing 777’s liquidity and governance posture.

For funders and law-firm borrowers, the episode underscores the premium investors and counterparties place on governance, disclosure, and cash-flow discipline—especially where cross-sector portfolios complicate risk assessment. Expect heightened diligence on funder balance sheets and inter-affiliate cash flows, and, for funders, a renewed emphasis on ring-fencing legal-asset vehicles from unrelated portfolio stresses.

A new white paper commissioned by the Association of Litigation Funders of Australia and conducted by YouGov reveals overwhelming public support for litigation funding and class actions as essential tools for justice and corporate accountability.

According to the white paper, YouGov surveyed a nationally representative sample of 3,311 Australians, uncovering a striking consensus: 69% believe litigation funding helps level the playing field between individuals and powerful corporations, while only 7% disagreed. Similarly, 62% regard class actions funded by third-party funders as critical for holding corporations accountable, compared to just 9% who disagreed.

The data suggests deep-rooted public skepticism toward corporate influence. A staggering 85% of respondents expressed concern about big business’s sway over government decision-making, and 76% believe corporations are held to different standards than the average person. In this context, litigation funding is perceived not only as beneficial but necessary: 73% said pursuing legal action would be more difficult without it—56% calling it “extremely difficult.”

The survey also reveals political implications. Two-thirds of respondents said they would be less likely to vote for a Member of Parliament who supports laws restricting class actions, and 70% said they would outright oppose such legislation. Cost remains the largest barrier to legal action, with 84% citing it as a prohibitive factor.

With such widespread support, the findings raise questions about the political and regulatory appetite for curbing litigation funding. Would similar sentiments emerge in the UK or US? The report’s authors suggest expanding the survey to YouGov’s other global markets to test that theory.

The implications for the legal funding sector are significant: despite regulatory headwinds, public sentiment strongly supports the role of funders. The challenge ahead may be less about winning hearts and minds—and more about converting public consensus into informed policy.

LionFish Litigation Finance has officially rebranded as LionFish Capital, marking a strategic pivot toward broader capital solutions and signaling its intent to evolve beyond traditional litigation finance. The London-based funder, acquired by Foresight Group LLP-managed funds in 2023, announced the rebrand alongside a series of senior hires, bolstering its ambition to become a leading provider of structured capital solutions in complex commercial disputes.

A post on LionFish Capital's LinkedIn page outlines the move as a milestone in the company's ongoing expansion, emphasizing its decision to eschew consumer opt-out collective actions in favor of backing meritorious claims by under-resourced victims of commercial misconduct. CEO Tets Ishikawa reiterated the firm’s commitment to transparency and industry best practices, including the continued public availability of standardized funding documents and a bespoke waterfall calculator to enhance cost predictability for claimants.

The rebrand comes with two prominent leadership appointments. Andrew Saker, former CEO of Omni Bridgeway, joins as Strategic Adviser, bringing global operational insight from one of the industry’s largest platforms. Returning to the firm is Neil Rowden as COO, a founding team member whose return underscores LionFish Capital’s focus on internal continuity and operational strength.

Further bolstering its advisory bench, the firm added several seasoned legal professionals with strong defense-side pedigrees, including Paul Abbott (ex-Freshfields), Joanne Keillor (ex-Herbert Smith Freehills), and Matthew Blower (ex-Dorsey & Whitney), among others. Their inclusion aligns with LionFish Capital’s commitment to nuanced, high-caliber dispute finance.

This rebrand and leadership expansion reflect broader industry trends: litigation funders are increasingly diversifying their offerings, sharpening focus on transparency, and investing in senior talent to differentiate themselves in a maturing market.

Fortress Investment Group, through its affiliate CF ESQ Holdco, has acquired a 20% economic interest in Esquire Law, a personal injury firm in Arizona, under the state's alternative business structure (ABS) framework. This marks the first known instance of a major U.S. asset manager entering law-firm ownership via ABS, signaling a widening scope for litigation finance beyond debt financing to direct equity participation in law firms.

An article in Bloomberg notes that Esquire Law, which handles car-accident cases and has recovered over $10 million for clients, maintains majority ownership (80%) through its named partners from Steinger, Greene & Feiner. In recent years, Fortress has committed substantial capital to legal assets—including $6.6 billion in litigation finance and an additional $2.9 billion toward intellectual property ventures—highlighting its prominence in the sector.

Consulting experts, including Lucian Pera of Adams & Reese, suggest that investor appetite for legal services is growing, especially as ABS frameworks offer legal access to outside capital in jurisdictions like Arizona. This approach is consistent with broader industry developments—Burford Capital, for example, is exploring similar paths through both ABS investments and managed services organizations (MSOs).

Fortress’s equity stake via Arizona’s ABS model represents a bold evolution in litigation finance—moving from traditional debt-based funding into direct law-firm ownership. While lauded by the industry, the move raises some important questions in a time of enhanced regulatory scrutiny: Could this model expand to other states or types of legal services? What are the implications for the ethical obligations of lawyers versus investor interests? And how might this trend shape the future relationship between capital and legal practice?

Omni Bridgeway has reported a step-change year, pairing robust investment performance with a balance sheet reset that positions the platform for its next growth phase. The ASX-listed funder highlighted headline income of $651.3 million, a $3.6 billion portfolio (up 29% year over year), and A$5.2 billion in assets under management. Returns were anchored by a 2.5x MOIC across 60 full and partial completions, while operating discipline showed through with a 6.2% reduction in cash opex. Management framed FY25 as both a consolidation of strategy and a proof point for the firm’s fair value marks.

An article in PR Newswire notes the year also brought 52 new investments totaling A$517 million in commitments and A$525.9 million added to fair value. Crucially, Omni executed its Fund 9 transaction with Ares—fully deleveraging and “significantly derisking” the balance sheet—while also validating its model with third-party institutional capital. CEO Raymond van Hulst called FY25 “a positive year with excellent investment returns and a transformative transaction,” adding that the platform is well placed for continued growth.

For a sector navigating evolving regulation and disclosure debates, the numbers matter—but so does capital formation. Omni’s ability to recycle capital, expand AUM and originate across jurisdictions reinforces the durability of legal assets as an alternative class.

Cartiga, a long-standing player in consumer and attorney funding, is heading to the public markets. The company agreed to combine with Alchemy Investments Acquisition Corp. 1 in a transaction pegged at $540 million in equity consideration, positioning the platform to scale its data-driven approach to underwriting and portfolio management. Management frames the move as about reach and efficiency: tapping a listed currency, broadening investor access to the asset class, and accelerating inorganic growth.

An article in MarketWatch reports that the proposed business combination would take Cartiga public via Alchemy’s SPAC, with the parties emphasizing how a listing could support growth initiatives and acquisitions. The piece notes the strategic rationale—public-market transparency and capital flexibility—as the platform seeks to deepen its footprint in funding for legal claims and law firms.

While final timing remains subject to customary steps (including the shareholder vote and regulatory filings), the announcement marks one of the most significant U.S. litigation-finance capital-markets events of the year.

Cartiga’s trajectory reflects a broader institutionalization of legal finance: more data, more discipline, and more diversified funding channels. The company’s model—providing non-recourse advances to plaintiffs and working capital to law firms—relies on proprietary analytics and scale to manage risk and returns across cycles. A public listing, if completed, would put Cartiga alongside other listed peers globally and provide investors with another pure-play exposure to the asset class’s uncorrelated return profile.