Meta and Google are shifting their defense strategy in a landmark social media addiction trial, turning attention to the 20-year-old plaintiff's personal circumstances rather than platform design. The case is backed by litigation funder Flashlight Capital through the Social Media Victims Law Center, with potentially billions of dollars at stake across related claims.

As reported by Bloomberg Law, Meta plans to call the plaintiff's therapists as witnesses to argue that her psychological issues stem from "turmoil in her family and school life rather than the platforms." Google intends to present YouTube usage data showing the plaintiff averaged only 30 minutes of daily use, contending that is not enough to qualify as addiction.

Meta stated that "the evidence simply doesn't support reducing a lifetime of hardship to a single factor," signaling a defense built around causation rather than product safety. The approach marks a notable pivot from earlier phases of the litigation, which focused more directly on platform design and algorithmic recommendations.

The case is being closely watched across the litigation finance industry as a bellwether for social media mass tort claims. Flashlight Capital's involvement underscores the growing role of third-party funders in backing large-scale consumer harm litigation, particularly in emerging areas where individual plaintiffs may lack the resources to take on major technology companies.

Arizona's Judicial Council has approved new restrictions on the state's alternative business structure program, requiring ABS law firms to provide direct legal services and maintain meaningful operations within the state.

As reported by Bloomberg Law, the updated rules mandate that ABS firms "provide legal services — not just make referrals to other lawyers" and "devote at least part of their business to serving people in Arizona." The changes target firms that have used the ABS designation primarily as a vehicle for out-of-state business or referral networks.

Arizona's ABS program, which permits law firms to accept outside investment and have non-lawyer owners, was designed to reduce legal service costs for state residents. The model has attracted significant interest from litigation funders and investors seeking to participate in law firm economics, including through management service organizations that own administrative functions of legal practices.

The restrictions signal the Judicial Council's intent to ensure the program delivers on its original promise of expanding access to justice within Arizona rather than serving as a regulatory arbitrage opportunity. The development is significant for the litigation finance industry, as alternative business structures represent one of the most direct pathways for outside capital to flow into legal services delivery. Other states considering similar programs will likely watch Arizona's evolving framework closely.

The third-party funding sector experienced significant upheaval in 2025 even as the market continued to expand, according to a new analysis from Akin Gump. What began as an almost unknown asset class has grown into a $20 billion industry, but operational challenges have reshaped the competitive landscape.

As reported by Akin Gump, Litigation Capital Management initiated a strategic review amid uncertainty, Therium pivoted to advisory services and paused direct funding, and a prominent funder faced civil fraud allegations in Jersey courts related to a $15 billion award against Malaysia. Meanwhile, Burford Capital acquired a stake in legal consultancy Kindleworth, and Omni Bridgeway spun off portfolio exposure into a continuation vehicle with Ares Management acquiring a 70% stake for over $200 million.

Funded arbitration claims remained active, with ICSID data showing 7% of newly registered 2025 cases involved a third-party funder. The secondaries market — where investors buy and sell existing stakes in funded cases — strengthened substantially, with Nera Capital closing a $50 million fund for acquiring interests in funded claims.

Regulatory approaches continue to diverge globally. The European Commission announced no plans to regulate third-party funding, and the UK's Arbitration Act 2025 omitted funding provisions entirely. In contrast, Singapore and Hong Kong expressly regulate the practice, while institutional rules from SIAC, HKIAC, and ICSID now require funding disclosure.

Counsel Financial, a provider of financial solutions for contingent-fee law firms and institutional investors in litigation finance, has appointed two new directors as part of a strategic expansion.

As reported by PR Newswire, Adam Mosher has joined as Director of Client Development for loan originations, where he will focus on facilitating loans ranging from $1 million to over $100 million for plaintiff law firms. Mosher previously held a senior business development position at a legal technology and settlement administration firm working with mass tort and class action clients.

Amanda Orzalek has been named Director of Client Solutions, overseeing service delivery for capital provider clients. Her responsibilities span underwriting, servicing, collateral management, and valuation work. Orzalek previously served as a senior product leader at a legal technology company and spent nearly a decade managing asbestos trust claims administration.

COO Megan Payne said the hires reflect "our commitment to building a best-in-class platform." Counsel Financial reports having deployed over $2 billion across more than 25 years of operations, combining legal expertise with underwriting and servicing capabilities. The appointments signal the company's continued investment in scaling its plaintiff law firm financing business and deepening its institutional investor services.

Legal Bay LLC, a leading provider of pre-settlement funding and lawsuit loans, announced that it continues to expand financial relief options for plaintiffs injured in motor vehicle accidents across the United States.

As reported by PR Newswire, the Newark, New Jersey-based company offers non-recourse legal funding, meaning plaintiffs only repay advances if their case results in a successful settlement or verdict. The company's underwriting team often completes applications within 24 to 48 hours of receiving case documentation.

Legal Bay funds cases involving cars, commercial trucks, buses, motorcycles, rideshare vehicles, and other motor vehicles. Beyond auto accidents, the company also finances personal injury lawsuits, medical malpractice claims, wrongful death litigation, product liability cases, and mass torts.

CEO Chris Janish stated that motor vehicle accidents "often lead to devastating injuries and unexpected financial strain." He added that the company's lawsuit funding programs "help plaintiffs gain access to immediate financial support so they can focus on recovery while their legal teams pursue the compensation they deserve." The announcement underscores the continued role of consumer legal funding in bridging the financial gap for plaintiffs navigating lengthy litigation timelines.

The Chapter 7 trustee overseeing the bankruptcy estates of Start Man Furniture, LLC, formerly known as Art Van Furniture, has filed a motion seeking court approval to sell the company's rights in a major antitrust class action to Optium Fund 6 for $850,000.

As reported by Chapter11Cases.com, the transaction would transfer all claims and potential recovery rights the estate holds in the long-running interchange fee litigation which began in 2005 in the Eastern District of New York. The case alleges Visa and Mastercard unlawfully fixed interchange fees charged to merchants, resulting in a revised settlement approved in December 2019 estimated at $5.56 billion to $6.26 billion.

Optium Fund 6 executed the asset purchase agreement on March 2, 2026, with a 10% deposit due within one business day and the balance payable after the court order becomes final. The trustee had previously attempted a competitive auction in October 2020 but found insufficient bidding interest.

The motion reserves the right to accept higher competing bids, with a minimum overbid of $950,000. The objection deadline is March 24, 2026, with a hearing scheduled for April 6, 2026. The sale highlights the growing market for litigation claims as tradeable assets in bankruptcy proceedings.

New York's Consumer Litigation Funding Act, set to take effect June 17, represents a significant regulatory intervention in an industry that has operated largely without oversight — but advocates say it does not go far enough.

As reported by Bloomberg Law, Rachel McCarthy and Tabitha Woodruff of the Milestone Foundation argue that while the new law establishes important baseline protections, it leaves critical gaps that could continue to harm vulnerable plaintiffs. The authors point to annual percentage rates in the consumer legal funding industry ranging from 30 to 124 percent, substantially higher than typical credit card rates. In one illustrative scenario, a family borrowing $10,000 at 50 percent monthly compounded interest could owe approximately $43,475 after three years.

The law caps a litigation funder's recovery at 25 percent of the gross settlement or judgment, requires plain-language contracts, mandates a 10-day rescission period, establishes state registration requirements, and prohibits interference with settlement decisions and misleading advertising.

However, the authors note that the legislation does not cap the interest rates funders can charge, nor does it impose rules or restrictions on the types of fees that may be assessed. They argue that these omissions leave room for the most predatory practices to continue even under the new regulatory framework.

The piece frames the New York law as an important first step while calling for additional reforms targeting interest rate caps and fee structures to fully protect consumers who turn to litigation funding while awaiting resolution of their cases.

The Delaware Court of Chancery has ordered the dissolution of a litigation funding operation after its two principals reached an irreconcilable impasse, offering a rare look at what happens when the business relationships behind funding ventures break down.

As reported by Law360, the court ruled to wind down the partnership between a hedge fund manager and a Florida-based personal injury attorney who jointly operated the funding business. The dispute involved Priority Responsible Funding and Settlement Funding LLC, entities that had been providing capital for litigation matters.

Rather than assigning fault to either party, the Chancery Court determined that the partners' falling out did not involve wrongdoing that would prevent an orderly dissolution. The ruling permits the business to be wound down under the court's supervision, a resolution that allows both sides to move forward without the protracted litigation that often accompanies contested partnership breakups.

The case highlights a less-discussed risk in the litigation funding industry: the internal dynamics between business partners and co-investors. While much of the regulatory and media attention around litigation finance focuses on funder-client relationships and disclosure requirements, the Delaware case underscores that the operational structures behind funding entities carry their own set of governance challenges.

The decision may serve as a reference point for other litigation funding ventures navigating partnership disputes, particularly as the industry continues to attract new entrants and capital from diverse financial backgrounds. The full decision is available through the Court of Chancery.

Today, the U.S. Chamber of Commerce Institute for Legal Reform (ILR) and Lawyers for Civil Justice (LCJ) submitted a joint comment letter to the Advisory Committee on Civil Rules of the Judicial Conference of the United States Courts (Advisory Committee) urging the body to promulgate a uniform rule requiring disclosure of third-party litigation funding (TPLF) agreements in federal courts and proposing the text of the rule. The comment letter comes ahead of the Advisory Committee’s April 14 meeting where it is expected to discuss the results of its listening tour. The comment proposes new rule text, which would amend Federal Rule of Civil Procedure 26(a)(1)(A) and require the disclosure of third-party funding contracts, in addition to basic information on funders. An original copy of the letter as submitted is available here and here.

The Advisory Committee formed a subcommittee to consider the need for a TPLF disclosure rule in October of 2024, after ILR and LCJ submitted a comment calling for the initiation of the rules process. Since that time, the TPLF subcommittee has conducted a listening tour to gather information on whether a rule is necessary and what it may require. LCJ’s analysis of actual TPLF contracts demonstrates that funders—who are nonparties to the litigation—not only share in the proceeds of litigation, but also have the ability to influence or control litigation and settlement decisions.

The joint letter argues a rule is necessary because the lack of TPLF disclosure causes a series of serious problems for America’s courts, including:

• Conflicts of interest between funder and parties to the case and/or witnesses remain hidden
• Time wasted in negotiations between parties who do not have the authority to make dispositive decisions about the resolution of the litigation. 
• “Zombie” litigation in which litigation continues at the behest of funders despite the parties’ desire to settle.
• Inability to manage settlement conferences effectively because parties are not empowered to make dispositive decisions. 

The comment letter also explains that courts face a serious rules problem because they are responding to disclosure requests on an ad hoc basis and are doing so in an inconsistent manner. Absent uniformity that only a rule can provide, some judges are rejecting disclosure requests under relevance standards governing the discovery process in Rule 26(a). Other courts are utilizing in camera or ex parte review in ways that are not in keeping with regular procedures regarding motions for protective orders. Some courts are ordering disclosure of TPLF. The comment letter concludes “This lack of uniformity is a rules problem because similarly situated parties in different geographic locations are getting starkly different interpretations of the FRCP and access to much-needed information.”

To solve the problem, ILR and LCJ offer specific language for a new rule that adds to the list of required initial disclosure[s] in Rule 26(a)(1)(A): 

(v) the name, address, and telephone number of any non-party individual or entity (other than counsel of record) that, whether directly or indirectly, is providing funding for the action and has a financial interest therein and, for inspection and copying as under Rule 34, any agreements or other documentation concerning the funding for the action or the financial interest therein.

The letter draws a direct parallel between the situation facing courts today surrounding TPLF with that of insurance contract disclosure before 1970. At that time, courts were split between granting disclosure of insurance contracts and denying such requests, often on the same lack of relevance basis that some courts today are denying TPLF disclosure requests. The Advisory Committee considered courts’ patchwork of approaches and ultimately decided a rule requiring insurance contract disclosure was necessary under Rule 26 to help all parties make a “realistic appraisal of the case.” The letter argues that the Committee should require TPLF disclosure given that, similar to insurance contracts, TPLF contracts can give non-parties a stake in the litigation as well as control over its resolution.

Lawyers for Civil Justice (LCJ) is an advocacy organization whose members support reform of procedural litigation rules to further “the just, speedy, and inexpensive determination of every action and proceeding.” Through collaborative engagement by in-house and outside counsel, LCJ develops and advocates for reform proposals that improve the efficiency and fairness of the U.S. civil litigation system, including through its AskAboutTPLF campaign, which advocates for a uniform rule requiring the disclosure of TPLF.

A program of the U.S. Chamber of Commerce (the “Chamber”), ILR’s mission is to champion a fair legal system that promotes economic growth and opportunity. The Chamber is the world’s largest business federation. It directly represents approximately 300,000 members and indirectly represents the interests of more than 3 million companies and professional organizations of every size, in every industry sector, and from every region of the country.