Litigation funding may soon be more than a tool for plaintiffs — it’s shaping up to be a cornerstone of growth strategy for tech startups, according to a new thought piece by funder WinJustice.
A recent post on LinkedIn from the firm outlines how litigation funders are expanding their remit to support LegalTech and SaaS companies embroiled in high-stakes litigation over IP, data privacy, and cross-border regulatory issues. As these companies scale, legal exposure often rises faster than revenue, making litigation finance not just a defensive tool, but a growth enabler.
For early- and growth-stage tech firms, litigation costs can cripple cash flow and deter investment. WinJustice argues that non-recourse funding allows companies to protect IP and contractual rights without diverting resources from R&D or expansion. By absorbing litigation costs — and recovering only on success — funders offer startups a financial shield that levels the playing field against larger adversaries.
The piece also explores how LegalTech platforms are feeding value back into the funding ecosystem. AI tools now assist funders with diligence, risk modeling, and portfolio management, creating what WinJustice calls a “two-way synergy” between finance and technology. The UAE, with its dual ecosystems in litigation funding (DIFC and ADGM) and tech innovation, is spotlighted as an ideal hub for this convergence.
The strategic implications stretch across stakeholders: founders get breathing room, legal departments shift from cost centers to value creators, and funders broaden their pipeline while enhancing operational efficiency. As litigation funding migrates from courtrooms to cap tables, WinJustice paints a future where disputes are assets, not liabilities.
Litigation Capital Management (LCM) has set a timetable for its next major disclosure, telling the market it will release audited results for the year ended June 30, 2025, on Wednesday, October 1. The notice gives investors and counterparties a clear marker for updates on realizations, fair-value movements, new commitments, and progress across single-case, portfolio, and claims-acquisition strategies. With funding markets steady and secondary activity picking up, attention will focus on monetizations and cash generation as LCM cycles older matters and deploys into new ones.
An announcement on Investegate dated September 8 confirms the reporting date and recaps LCM’s operating model: direct investments from balance sheet capital alongside third-party fund management, pursuing single-matter funding, portfolio structures, and acquisitions of claims. The company notes it derives revenue both from direct investments and from performance fees on managed capital. The notice also reiterates LCM’s international footprint, with headquarters in Sydney and offices in London, Singapore, and Brisbane, reflecting a pipeline that spans common-law jurisdictions and arbitration hubs.
While the update is procedural, the date sets expectations for details on commitments, deployments, and realizations through fiscal 2025—metrics that typically drive NAV, fee accruals, and liquidity for further commitments. Investors will also look for commentary on case duration, provisioning, and any balance-sheet recycling that can support new originations without dilutive capital raises.
Against a backdrop of competitive pricing and increasingly bespoke structures, LCM’s disclosures should offer a read-through on demand for commercial funding and the cadence of exits across core verticals. If realizations and commitments point in the right direction, expect continued momentum in portfolio-level and acquisition strategies as funders lean into capital-efficient growth.
Burford Capital’s proposal to take minority, non-controlling stakes in U.S. law firms via management services organization (MSO) structures has sparked a fresh round of debate over investor involvement in legal practice. The funder frames the plan as a way to provide growth capital while remaining a passive owner outside the practice of law. Critics counter that any move toward outside ownership, even indirectly through MSOs, risks putting investor preferences ahead of client interests and could entangle firms in thorny ethics issues across multiple jurisdictions.
An article in Insurance Journal reports that Burford Chief Development Officer Travis Lenkner said the firm is “pursuing strategic minority investments” and would be a passive investor. The piece canvasses pushback from the Florida Justice Reform Institute and outlines the patchwork of state rules: most jurisdictions still bar nonlawyer ownership; Arizona allows it directly; and a recent Texas ethics opinion signaled that well-structured MSOs can be permissible if they don’t engage in the practice of law or share fees.
Insurance Journal also notes the broader political and regulatory context—more states moving toward disclosure or licensing of funders—while highlighting unresolved questions about how courts and bars might treat MSO-based ownership in practice.
For funders, the proposal—if accepted by regulators and clients—could represent a new pipeline to origination and data, deeper relationships with firms, and adjacencies to traditional case funding. For firms, it dangles capital for tech, talent, and operations without ceding control of fee streams. The near-term test is whether any first-mover deals clear ethics review and demonstrate independence in substance, not just form. If they do, expect a competitive race among funders and private capital to define the template. If not, this episode may reinforce the status quo—and accelerate states’ efforts to spell out guardrails for third-party finance and law-firm ownership models.
Law firms across England and Wales are experiencing a rare reprieve in professional indemnity insurance (PII) costs, with a wave of new market entrants and increased capacity pushing premiums downward for the first time in years.
An article in the Law Gazette reports that firms of all sizes have seen rate reductions—most notably larger firms, where primary layer premiums have dropped by 5%–10%. Mid-sized firms are also benefiting, with typical decreases of 2%–5%, while smaller firms face a more uneven landscape. Brokers attribute the softening market to heightened competition among insurers and a lack of the anticipated post-Covid surge in claims, particularly in conveyancing.
Yet insurers remain cautious. The severity of claims is on the rise, with 20% now pleading losses above £3 million, per Lockton data. Notably, litigation funders are increasingly cited as a key contributor to this trend. Funders’ financial backing, or “war chests,” allow claims to proceed further than before, raising concerns for insurers and heightening law firm liability. Administrators and funders alike are probing legal advice as part of post-insolvency investigations, bringing a new wave of high-value, third-party claims.
In response, insurers are urging firms to reassess their risk profile, invest in excess coverage, and present stronger underwriting narratives. Brokers also report growing interest in regulatory defense cover, as SRA-related claims become more frequent.
Meanwhile, cyber risk and artificial intelligence loom large. Despite rising ransomware attacks and a 77% spike in cyber threats, only 28% of firms carry standalone cyber policies. Insurers are urging firms to adopt multi-factor authentication, conduct risk assessments, and develop AI usage policies to mitigate exposure.
A new third-party funder has joined Australia’s increasingly competitive class actions market. Ninety Mile Capital, founded in Melbourne by former Therium executives Simon Dluzniak and Louise Hird, will focus on financial services, consumer and environmental claims domestically, while also eyeing opportunities in Singapore-seated arbitration. The launch comes amid continuing portfolio realignments among global funders and sustained claimant appetite for vehicles that can shoulder the cost and risk of complex, multi-year disputes.
An article in CDR News notes that Dluzniak will serve as director and Hird as chief investment officer, following their departures from Therium earlier this year. Their new vehicle signals a back-to-basics thesis in Australia: target well-defined class cohorts and regulatory-driven harms in financial services and consumer protection, where causation and damages models are increasingly standardized and courts are familiar with funded proceedings.
For practitioners and claimants, Ninety Mile Capital’s arrival could widen the field of potential terms on offer. Competition among funders has already tightened pricing and diversified structures; from single-matter to portfolio and even hybrid credit facilities. A new entrant with local experience may also accelerate filings in environmental claims, where granular scientific evidence and regulatory interplay often demand both capital and patience. The international dimension—scouting Singapore—underscores how funders with Australian DNA are increasingly structuring for regional reach, syndication options and enforcement pathways beyond a single jurisdiction.
If Ninety Mile Capital executes on its targeted strategy, expect incremental pressure on incumbents in Australia and more cross-forum coordination with Singapore. The bigger question for the industry: does this signal a new wave of specialist boutiques spinning out of legacy platforms?
Kerberos Capital Management has been named one of only four finalists nationwide for Chief Investment Officer (CIO) magazine’s 2025 Industry Innovation Awards in the Private Credit category.
Each year, CIO magazine honors organizations that demonstrate “truly exceptional approaches to the challenges of institutional asset ownership and asset management.” This recognition highlights Kerberos’ leadership in private credit and its innovative strategies that continue to set new standards in the institutional investing market.
“We are proud to be recognized among the top firms in the country for our work in private credit,” said Joe Siprut, CEO & CIO of Kerberos Capital Management. “This acknowledgment underscores our team’s commitment to innovation, disciplined risk management, and delivering differentiated value to our investors.”
Kerberos’ inclusion as a finalist reinforces its growing national reputation as a forward-thinking investment manager that thrives on tackling complex challenges, seeking to generate alpha from complexity but not from increased risk.
About Kerberos Capital Management
Kerberos Capital Management is an SEC-registered investment adviser and alternative investment manager, providing creative solutions for those seeking capital in special situations. Kerberos’ flagship private credit strategy emphasizes legal assets and other complex collateral. Kerberos manages both a pooled vehicle and separate accounts for institutional and high net worth investors worldwide.
Litigation finance has become an increasingly utilized tool to support valuable claims in financially distressed bankruptcies. However, a recent decision from the Northern District of Texas—voiding a $2.3 million litigation funding agreement between a liquidating trustee and a funder—has reignited scrutiny over how these arrangements are structured and approved.
An article on McDonald Hopkins's website emphasizes best practices in the wake of that ruling, urging parties to proactively ensure enforceability of funding agreements. Even when plan documents appear to authorize litigation funding, it’s strongly recommended that parties secure explicit approval from the bankruptcy court. Such approval enhances certainty, mitigates future challenges, and solidifies the funder's standing against all estate stakeholders.
Key recommendations from the advisory include:
Prepare for judicial and stakeholder scrutiny. Courts are likely to closely examine the economics and procedural fairness of funding agreements. Demonstrating that terms are fair, reasonable, and beneficial to the estate and creditors is essential.
Review existing agreements carefully. Funders and trustees should verify that their authority is clearly established in underlying plan or trust documents and confirm whether the arrangement has been properly disclosed and court‑approved. If not, consider options like negotiating revised terms or seeking court ratification.
Maintain transparency and documentation. Keep detailed records of communications, payments, and disclosures. Monitor developments in the case for challenges to funding arrangements.
Engage experienced bankruptcy counsel. Legal guidance is critical to respond to objections and navigate the nuanced landscape of litigation finance in reorganization contexts.
This ruling serves as a clear reminder: litigation funding in bankruptcy requires far more than a signed agreement—it demands judicial scrutiny and explicit approval. Stakeholders must prioritize transparency, heavy documentation, and procedural integrity to ensure arrangements are respected.
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.
Apex Litigation Finance has strengthened its leadership team with the appointment of Gabriel Olearnik, a highly experienced litigation funding professional with a global track record in high-value dispute resolution and complex commercial matters.
Over the past five years, Gabriel has originated and reviewed more than 451 litigation funding cases worldwide with an aggregate value exceeding $116 billion, closing deals worth over $700 million. His recent work includes the successful settlement of a high-profile BIT matter as well as executive employment claims in the UK.
Gabriel’s career spans senior roles in UK, US and European litigation funders, where he was instrumental in structuring high-value transactions, securing strategic court orders and conducting multi-jurisdictional investigations. In 2023, he closed a £268 million litigation funding deal in just three weeks, underscoring his ability to deliver results under tight timelines.
Recognised by Lexology as one of only 66 lawyers worldwide to receive the Thought Leaders in Third Party Funding accolade, Gabriel has been involved in matters that have attracted daily media coverage and required innovative dispute strategies. His experience extends to training legal teams, advising on politically sensitive disputes, and executing complex enforcement actions.
“Gabriel brings exceptional global experience, deep sector knowledge, and a proven ability to deliver in high-stakes environments,” said Maurice Power, CEO of Apex Litigation Finance. “His appointment further enhances Apex’s market position and it’s ability to originate, evaluate and fund complex commercial claims for our clients.”
“I am delighted to join Maurice and the team at Apex,” said Gabriel. “Apex’s strong financial backing and their speed of execution make this a natural alignment. I look forward to building on the strong foundation set out by my predecessor, Stephen Allinson, and contributing to the future success of the business.”
Gabriel’s appointment reflects Apex’s ongoing growth in funding small to mid-sized UK commercial disputes and builds on the company’s commitment to delivering fast, fair, and competitive non-recourse litigation funding solutions to claimant’s who may be prohibited from pursuing meritorious cases due to cost and/or financial risk.
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.
Private equity (PE) firms often view legal disputes involving portfolio companies as liabilities—not opportunities for value creation. However, in a recent blog post, Omni Bridgeway argues that when properly modeled and leveraged, dispute finance can unlock hidden value throughout a PE investment lifecycle.
An article on Omni Bridgeway’s website explains that dispute finance enables PE firms to convert uncertain legal claims into a probability‑weighted, risk‑adjusted net present value (NPV), which can be used as a powerful negotiating lever in acquisitions. The firm illustrates this with an example: a $10 million litigation claim, after probabilistic weighting, legal cost deductions, and discounting, yields a risk‑adjusted NPV of roughly $3.5 million—highlighting how firms can avoid overpaying for speculative legal value
Once the investment is underway, dispute finance can preserve EBITDA by funding legal costs outside the P&L, since such non‑recourse financing isn’t treated as an SG&A expense or recorded as debt. Omni Bridgeway demonstrates that a $2 million litigation expense can be eliminated from SG&A, boosting EBITDA from, say, $11 million to $13 million.
As dispute finance becomes more accepted in M&A workflows, funders that offer robust valuation frameworks and flexible, non‑recourse instruments may gain a competitive edge. Overall, Omni Bridgeway’s post highlights that monetising legal claims—through non‑recourse capital advances or outright sale to a funder—can free up liquidity for operational initiatives without increasing downside risk.
When people talk about third party litigation financing, they often lump everything into one bucket—as if every type of funding that touches the legal system is essentially the same. But that’s a misconception. The world of legal finance is much more varied, and each type serves a distinct role for a distinct audience.
A good way to understand the differences is to step away from the courtroom and into the world of music. Think of Consumer Legal Funding as a rock band, Commercial Litigation Financing as a symphony orchestra, and Attorney Portfolio Financing as a gospel choir.
All three make music—they all provide funding connected to the legal system—but they produce very different sounds, are organized differently, and serve different purposes. Let’s explore these three “musical groups” of legal funding to understand how they work, why they exist, and what separates them.
Consumer Legal Funding: The Rock Band
Immediate, Personal, and Audience-Driven
A rock band connects directly with its fans. The music is raw, emotional, and often tied to the lived experiences of ordinary people. That’s exactly what Consumer Legal Funding does—it provides individuals with direct financial support while they are waiting for their personal injury cases to resolve.
Most people who seek consumer legal funding have been in a car accident, or experienced some other harm caused by negligence. While their cases work their way through the legal system, they still need to pay rent, buy groceries, keep the lights on, and support their families. Consumer Legal Funding steps in to help them cover these day-to-day expenses.
Like a rock band that thrives on the energy of a crowd, Consumer Legal Funding is closely tied to the needs of everyday people. It’s not about abstract legal theories or corporate strategy. It’s about giving real people financial breathing room so they can withstand the pressure from insurers who might otherwise push them to settle for less than they deserve.
Flexibility and Accessibility
Just as a rock band doesn’t require a massive concert hall or multimillion-dollar backing, Consumer Legal Funding is accessible on a small, personal scale. A consumer can request a few hundred or a few thousand dollars to cover immediate needs, and repayment is contingent on the case outcome. If the plaintiff loses, they owe nothing.
This non-recourse structure mirrors the risk of a rock band going on tour—they might make money, or they might not, but the fans are there for the experience. Similarly, Consumer Legal Funding companies take the risk that the case might not succeed, and they may not get their investment back.
Critics and Misconceptions
Rock bands often face criticism for being too loud, too disruptive, or too unconventional compared to “serious” classical music. Consumer Legal Funding gets similar pushback. Critics sometimes argue it encourages frivolous lawsuits or drives up settlement costs. But the reality is the opposite—the funds provided to a consumer doesn’t fund lawsuits; they fund life necessities for individuals already in the legal system.
Consumer Legal Funding’s role is narrow but vital. Like a rock band giving a voice to ordinary people, it empowers individuals who might otherwise be silenced by financial hardship.
Commercial Litigation Financing: The Symphony Orchestra
Complex, Structured, and High-Stakes
Where Consumer Legal Funding is the rock band of the legal funding world, Commercial Litigation Financing is the full symphony orchestra—large, complex, and meticulously coordinated.
Here, the players are not individuals injured in accidents but corporations, investors, and law firms involved in high-value commercial disputes. These cases can involve intellectual property battles, antitrust issues, international contract disputes, or shareholder actions. The stakes often run into the tens or hundreds of millions of dollars.
Like an orchestra, Commercial Litigation Financing is structured and multi-layered. Each section—strings, brass, woodwinds, percussion—must work together under the baton of a conductor. In litigation finance, this “conductor” is the funding company, aligning investors, lawyers, and plaintiffs toward a common goal: seeing the case through to resolution.
Strategic and Long-Term
Orchestras don’t play three-minute songs; they perform long symphonies that require endurance, precision, and careful planning. Similarly, Commercial Litigation Financing is not about immediate cash flow. It’s about supporting a complex legal strategy over years of litigation.
Funds can cover attorney fees, expert witnesses, discovery costs, and even corporate operations while a case drags on. The financing enables companies to pursue claims they might otherwise abandon because of the sheer cost and duration of litigation.
Audience and Impact
The audience for an orchestra is often more formal, more elite, and more willing to pay for a grand performance. Commercial Litigation Financing likewise serves a specialized, high-stakes audience: multinational corporations, hedge funds, and sophisticated investors. The outcomes affect entire industries and markets, not just individual households.
While a rock band might play in bars or stadiums, an orchestra plays in concert halls before an audience expecting refinement. That’s the difference in scale between Consumer Legal Funding and Commercial Litigation Financing.
Attorney Portfolio Financing: The Gospel Choir
Collective Strength and Community
If Consumer Legal Funding is a rock band and Commercial Litigation Financing is a symphony orchestra, then Attorney Portfolio Financing is a gospel choir. It’s powerful, collective, and rooted in the idea of strength in numbers.
Attorney Portfolio Financing provides capital to law firms by pooling together multiple cases—often personal injury or contingency fee cases—into one financing arrangement. Instead of betting on a single case, the funding spreads across a portfolio, much like the voices of a choir blend to create a unified sound.
Stability and Predictability
A gospel choir doesn’t rely on one soloist to carry the performance. If one voice falters, the rest keep singing. Similarly, portfolio financing reduces risk because the outcome of any one case doesn’t determine the success of the financing. The strength lies in the collective performance of many cases.
This allows law firms to take on more clients, expand their practices, and better withstand the financial ups and downs of litigation. For clients, it means their attorneys have the resources to see their cases through rather than being pressured into quick settlements.
Purpose and Spirit
Gospel choirs aren’t just about music—they’re about inspiration, resilience, and community. Attorney Portfolio Financing carries a similar spirit. It’s designed not only to provide financial stability for law firms but also to empower them to serve clients more effectively.
While the audience for a gospel choir is often the community itself, the “audience” for portfolio financing is law firms and, indirectly, the clients who benefit from better-resourced representation.
Comparing the Three Sounds
To appreciate the differences, let’s put the three side by side:
Type of Funding
Musical Analogy
Audience
Scale
Purpose
Consumer Legal Funding
Rock Band
Individuals waiting for case resolution
Small-scale, personal
Helps consumers cover living expenses while awaiting settlement
Commercial Litigation Financing
Symphony Orchestra
Corporations, investors, large law firms
Large-scale, complex
Funds high-stakes commercial disputes over years
Attorney Portfolio Financing
Gospel Choir
Law firms (and indirectly their clients)
Medium-to-large scale
Provides stability by funding multiple cases at once
Why These Distinctions Matter
Understanding these distinctions isn’t just an academic exercise—it has real implications for policy, regulation, and public perception. Too often, critics conflate Consumer Legal Funding with Commercial Litigation Financing or assume Attorney Portfolio Financing operates the same way as individual case advances.
But regulating a rock band as if it were an orchestra—or treating a gospel choir as if it were a solo act—would miss the point entirely. Each type of legal funding has its own purpose, structure, and audience.
Consumer Legal Funding keeps people afloat in times of crisis.
Commercial Litigation Financing enables corporations to fight complex battles on equal footing.
Attorney Portfolio Financing stabilizes law firms and expands access to justice.
All three are part of the broader “music” of legal finance, but they are distinct genres with distinct contributions.
Conclusion: Harmony Through Diversity
Music would be dull if every performance sounded the same. The same is true for legal finance. A rock band, a symphony orchestra, and a gospel choir all create music, but their sounds, audiences, and purposes differ dramatically.
Similarly, Consumer Legal Funding, Commercial Litigation Financing, and Attorney Portfolio Financing are all forms of legal finance, but each plays a unique role. Recognizing these differences is crucial for policymakers, industry professionals, and the public.
When we appreciate the rock band, the orchestra, and the choir for what they are, we begin to see the full richness of the legal finance “soundtrack.” Together, they form a diverse ecosystem that, when balanced correctly, ensures both individuals and institutions can pursue justice without being silenced by financial pressure.
Pollen Street Capital ("Pollen Street") today announces a new senior secured credit facility of up to £50 million to New North Litigation Capital (“New North”). New North is a commercial litigation finance company and a direct subsidiary of Capital Law, a Cardiff based law firm founded in 2006.
Capital Law has a strong track record in commercial litigation, having closed over 400 claimant cases since 2001 with a 95% win rate. Drawing on its senior leadership and experienced disputes team, Capital Law launched New North to address the underserved small to mid-market segment of commercial litigation market.
New North will be the only litigation financier in the UK owned and operated by practicing lawyers, bringing their day to day lived experience of handling mid-market litigation into pricing the risk and the funding investment decisions.
Christopher Nott, Founder and CEO of New North commented: “We are pleased to work with Pollen Street on this financing to launch New North Litigation Capital. The funding supports us to bridge a critical gap by funding claims that are often deemed too small by other players in the market. We are excited to work with the Pollen Street team as we create this new kind of litigation funding.”
Connor Marshall-Mckie, Investment Director at Pollen Street, commented: “New North addresses an important gap in the litigation funding space, focusing on smaller mid-market commercial litigation. With the significant opportunity available and the deep experience of the leadership team from Capital Law we are excited to partner with the team to support their growth.”
About Pollen Street
Pollen Street is a fast-growing and high-performing private capital asset manager. Established in 2013, the firm has built deep capability across the real estate, financial and business services sectors aligned with mega-trends shaping the future of the industry. Pollen Street manages over €7bn AUM across private equity and credit strategies on behalf of investors including leading public and corporate pension funds, insurance companies, sovereign wealth funds, endowments and foundations, asset managers, banks, and family offices from around the world. Pollen Street has a team of over 95 professionals.
Express Legal Funding announced it has reached its fifth year as a member of the Alliance for Responsible Consumer Legal Funding (ARC), underscoring a commitment to best practices in an often-polarized pre-settlement space. For a company that brands itself around transparent pricing and consumer education, the ARC imprimatur doubles as a marketing and compliance asset—especially as statehouses revisit disclosure, APR caps and contract clarity.
An announcement in PR Newswire positions the milestone within a “rapidly growing” lawsuit-cash-advance market. While the release is light on metrics, the message tracks with the broader U.S. consumer-funding narrative: pressure from insurers and tort-reform groups on one side; advocates and funders emphasizing access to liquidity and non-recourse safety on the other.
For plaintiff firms, vendor due diligence remains a reputational imperative; for consumers, independent accreditation—however voluntary—can serve as a quick proxy for baseline standards when shopping funding offers. The strategic subtext is clear: as more states contemplate rules around discoverability, disclosures and rate structures, firms that can point to consistent adherence to codes like ARC’s may enjoy smoother law-firm relationships and fewer regulatory headwinds.
With regulatory skirmishes likely to continue at the state level, recurring membership signals (ARC or otherwise) will matter more.
Editor's Note: An earlier version of this article stated that Express Legal Funding reached its fifth consecutive year as a member of the Alliance for Responsible Consumer Legal Funding. Express Legal Funding reached its fifth year, but not consecutively. We regret the error.
A new salvo in the UK’s collective actions saga puts third-party funding in the spotlight. The Solicitors Regulation Authority (SRA) has criticized aspects of mass-consumer practices—specifically around funding and referral fees—raising uncomfortable questions for claimant firms and their financial backers. The latest flashpoint again involves Innsworth, the funder behind the long-running Mastercard litigation brought by class representative Walter Merricks CBE, where wrangling over settlement distribution and funder economics has spilled into public view.
An article in The Times reports that the watchdog sees “poor practices” in parts of the market and notes escalating tensions tied to the £200 million Mastercard settlement—well below the claim’s original £14 billion headline—prompting Innsworth’s threatened action over the deal’s terms. The piece underscores the funding dynamics now woven into virtually every major UK mass claim, from opt-out competition cases to data-privacy suits; the SRA’s framing suggests a harder regulatory edge on fee flows and governance in arrangements that align firms, funders and marketing affiliates.
Beyond the immediate case drama, two structural trends are converging. First, post-PACCAR contract examination has left funders and class reps renegotiating economics and disclosure with tribunals watching closely. Second, political and judicial appetite for “light-touch” oversight (rather than price caps) remains in flux, even as market size and claimant outreach expand.
If the SRA proceeds from cautionary statements to targeted enforcement, firms may re-paper referral arrangements and introduce additional ring-fencing around funder influence to avoid conflicts.
Apex Litigation Finance has announced the retirement of Stephen Allinson from his role as Head of Legal, marking the end of a formal leadership chapter but not his association with the litigation funder.
Stephen is a highly respected Solicitor and Licensed Insolvency Practitioner with more than 40 years’ experience in business law, insolvency and debt recovery. Over the course of his career, he has combined practice with thought leadership, lecturing widely on credit and insolvency matters and serving in senior regulatory and educational roles.
His distinguished career includes:
Building and leading a nationally recognised insolvency and debt recovery practice at a large regional law practice, employing over 60 department staff and managing key national contracts.
Serving as Chairman of the Board of The Insolvency Service and Chairman of The Joint Insolvency Examination Board.
Holding senior tribunal and regulatory positions, including membership of the ICAEW Conduct Committee and more than a decade chairing disciplinary and appeal tribunals for the ACCA.
Chairing the Assessment Board of the Chartered Institute of Credit
Stephen first joined Apex in 2019 as a consultant, before becoming Head of Legal in 2022. In that capacity he has been instrumental in guiding Apex’s legal strategy, strengthening its market position and ensuring the company’s commitment to fair, practical and client-focused litigation funding.
While he will be stepping down from the Head of Legal role, Stephen’s association with Apex will not end. He will continue to serve the business as a trusted consultant, providing invaluable expertise and support to the team and Apex’s clients.
Maurice Power, CEO of Apex Litigation Finance, said: “Stephen’s contribution to Apex has been exceptional. His legal expertise, combined with his deep understanding of insolvency and credit law, has helped shape Apex into the funder it is today. We are delighted that while he is stepping down from his formal role, we will continue to benefit from his counsel as a consultant. We thank him sincerely for his leadership and look forward to our continued collaboration.”
Tim Fallowfield, Apex Chairman wrote: “Apex would not be where it is today without Stephen’s contribution, his wide-ranging legal knowledge and passion for his work. He has mentored the legal team, led by example and been an integral member of the Apex Investment Committee. We wish him lots of luck for the next chapter and look forward to his future engagement with the Apex business. From all of us at Apex, a hearty thanks.”
Stephen commented: “It has been a privilege to be part of the Apex journey and contribute to the growth of the company. Access to justice has always been one of the guiding principles of my professional career and I look forward to the continuing growth of Apex and still playing my part, albeit in a different role.”
About Apex Litigation Finance
Apex Litigation Finance provides fast, fair and flexible funding solutions for small to mid-sized UK commercial disputes requiring between £10,000 and £750,000 of funding, on a non-recourse basis. By combining financial support with deep sector expertise, Apex enables access to justice for claimants while serving as a trusted partner to legal professionals and insolvency practitioners.
Pogust Goodhead has emphatically denied that it is controlled by litigation funders, insisting it retains full “forensic independence” in the high‑profile claim over the 2015 Mariana dam collapse.
As LFJ recently reported, the class action firm, representing hundreds of thousands of victims in a potential £36 billion lawsuit against mining giant BHP, is under scrutiny following the recent ousting of its co‑founder and chief executive, Tom Goodhead, at the behest of its primary financier, Gramercy Funds Management.
An article in The Law Society Gazette reports that Pogust Goodhead maintains it enjoys “forensic independence” from its principal backer. Opponents—including BHP and its counsel, Slaughter and May—have raised serious concerns about governance, questioning whether Gramercy now exerts undue influence over strategic decisions—an arrangement that could run foul of English and Welsh rules reserving case control for qualified lawyers.
In response, Pogust Goodhead reiterated that it remains “fully independent, with complete control over the strategy and direction of every case” and that its renewed governance structures strengthen its capacity to act in its clients’ best interests. Gramercy, for its part, denied any ownership or management control of the firm.
Looking ahead, this unfolding governance dispute raises critical questions for the future of litigation funding: How will courts view funder-linked control over claimant law firms? Could the outcome limit or reshape access-to-justice models reliant on third-party financing? As this case nears a key ruling, the legal funding industry may be on the cusp of a regulatory watershed.
A new joint study by the Insolvency Law Academy and Burford Capital sheds light on how legal finance is gaining traction as a strategic tool in the India's insolvency processes. By enabling distressed entities and professionals to monetize contingent assets without exhausting limited estate resources, legal finance has the power to enhance liquidity and improve recovery outcomes for creditors.
An article by Burford Capital unveils how legal finance-backed structures can convert contingent claims into tangible value, supporting corporate continuity and delivering stronger creditor returns. The study highlights India’s unique factors: abundant untapped recoveries from avoidance claims and disputed receivables, widespread capital shortages faced by insolvency professionals, and the need for prompt liquidity solutions. It also references real-world case studies showcasing how legal finance facilitated strategic wins for firms like Hindustan Construction Company and Patel Engineering.
On the regulatory front, judicial rulings—such as in Tomorrow Sales v. SBS Holdings (2023)—have explicitly recognized the legitimacy of legal finance in India’s litigation ecosystem. Meanwhile, updates to the IBC now permit the assignment of “not readily reali[z]able assets” during liquidation, laying groundwork for integrating legal finance into the insolvency framework. Nonetheless, the regulatory landscape—including aspects of FEMA compliance and fund repatriation—remains cautiously permissive.
Emerging operational structures include direct estate financing, SPV‑based claim ring‑fencing, and creditor assignments for immediate value. The report urges a “light‑touch” regulatory approach, alongside the development of codes of conduct and educational efforts to arm insolvency professionals and creditors with the know‑how to deploy legal finance effectively.
Looking ahead, as India’s insolvency infrastructure matures, legal finance is poised to play a central role—unlocking value in distressed assets, bridging funding gaps, and aligning with global best practices.
Burford Capital’s new push to take minority stakes in U.S. law firms is already meeting resistance from tort-reform advocates and insurer-aligned groups, who argue the structure could blur loyalties inside the attorney-client relationship. The plan, described by Burford’s chief development officer Travis Lenkner as “strategic minority investments” to help firms scale, would rely on managed service organizations (MSOs) that house back-office assets while leaving legal work to a lawyer-owned entity. Supporters cast it as a lawyer-friendly alternative to private equity; skeptics see a back-door end-run around state bars’ bans on non-lawyer ownership.
An article in Insurance Journal reports that critics, including the Florida Justice Reform Institute’s William Large, warn MSO-style deals could tilt decision-making toward investors focused on “big verdicts,” threatening firm independence and client interests. Only Arizona permits direct non-lawyer ownership today, and while Utah and Washington, D.C., have loosened rules at the margins, most states still enforce bright-line prohibitions.
The debate has sharpened as disclosure and licensing regimes proliferate: at least 16 states now require some level of third-party funding transparency. The Insurance Journal piece also notes a recent Texas Bar ethics opinion that green-lights MSOs for law-firm services under narrow conditions, though it doesn’t answer the broader question of outside investors’ influence. For its part, Burford says it understands the ethical guardrails and intends to be a passive investor focused on firm growth and operational support.
For the legal finance industry, the MSO path signals a pivotal test. If bars and courts accept these structures, capital could flow directly into firm operations—potentially accelerating portfolio origination, technology spend, and fee-earner leverage. If regulators balk, expect renewed calls for explicit rulemaking on ownership, disclosure, and control—alongside creative alternatives (credit facilities, revenue shares, and hybrid portfolios) to replicate MSO-like benefits without the governance controversy.
A high-stakes governance fight is spilling into the UK’s largest group action. BHP has demanded clarity over hedge fund Gramercy Funds Management’s role at Pogust Goodhead, the claimant firm fronting a £36 billion suit tied to Brazil’s 2015 Mariana dam disaster. The miner’s counsel at Slaughter and May points to recent leadership turmoil at the firm and questions whether a non-lawyer financier can exert de facto control over litigation strategy—an issue that cuts to the heart of legal ethics and England & Wales’ restrictions on who can direct claims.
Financial Times reports that Gramercy, which finances Pogust, has just extended $65 million more to the firm after the removal of CEO-cofounder Tom Goodhead. BHP wants answers on independence and management oversight as the case nears a pivotal High Court ruling. For its part, Pogust says it remains independent and committed to its clients, while Gramercy rejects any suggestion it owns or manages the firm. The backdrop is familiar to funders: courts’ increasing scrutiny of who calls the shots when capital underwrites complex, bet-the-company litigation. Prior settlement overtures from BHP and Vale—reported at $1.4 billion—were rebuffed as insufficient relative to the claim’s scale and alleged harm.
Beyond this case, the episode underscores a larger question: how far can financing arrangements go before they collide with the long-standing principle that lawyers—and only lawyers—control litigation? The answer matters well beyond Mariana. If courts or legislators tighten the definition of control, expect deal terms, governance covenants, and disclosure norms in UK funding to evolve quickly. For cross-border mass-harm claims, the line between support and steer is narrowing—and being tested in real time.
A new opt-out competition claim aims squarely at Amazon, alleging price-parity tactics inflated costs for more than 45 million UK consumers. The Association of Consumer Support Organisations has filed for certification in the Competition Appeal Tribunal, instructing Stephenson Harwood with counsel from Monckton Chambers. The claim asserts Amazon’s marketplace policies restricted third-party sellers from offering better prices elsewhere—costs that, ACSO says, consumers ultimately bore.
The Global Legal Post notes a third-party litigation funder—confirmed as a member of the Association of Litigation Funders—is bankrolling the action, with identity to be revealed at certification. That disclosure posture aligns with the CAT’s funder-transparency expectations post-PACCAR while preserving competitive sensitivity during the early phase. On the defense side, Amazon labeled the case “without merit,” and emphasized consumer benefits and seller support on its platform. For claimant-side practitioners, the case illustrates how funders continue to underwrite large opt-out competition claims notwithstanding shifting case law on damages-based LFAs; structures are adjusting, not retreating.
If certified, the case will test funder appetite for big-ticket consumer competition matters amid the UK government’s newly announced review of the collective actions regime. It could also influence how funders structure returns (percentage vs. multiple, hybrids) to thread the needle between tribunal oversight and commercial viability. Watch for whether the CAT’s scrutiny of fees and “just and reasonable” outcomes further standardizes funding terms across UK opt-out claims.
The following was contributed by Tom Webster, Chief Commercial Officer for Sentry Funding.
The UK government is seeking views on the operation of litigation funding in the collective actions sphere, as part of its wider review of the opt-out collective actions regime in competition law.
An open call for evidence by the Department for Business & Trade (DBT) earlier this month featured a number of questions relating to litigation funding. These included whether the approach to funders’ share of settlement sums or damages is fair and proportionate; how the secondary market in litigation funding has developed and whether this has affected transparency and client confidentiality; whether funding provision for the full potential cost of claims is considered enough at the outset; and how conflict between litigation funders and class representatives should be approached.
As well as funding issues within the regime, the review will also look at scope and certification of cases; alternative dispute resolution, settlement and damages; and distribution of funds.
The DBT said it was time to review the operation and impact of the opt-out collective actions regime in competition law, as it is now ten years since its introduction through the Consumer Rights Act 2015.
It said: ‘This government is focused on economic growth, and a regime that is proportionate and focused on returns to consumers where they are due is good for growth and investment.
‘However, we are aware of the potential burden on business that increased exposure to litigation can present. Finding the right balance between achieving redress for consumers and limiting the burden on business is essential to ensure that businesses can operate with certainty, whilst providing a clear, cost-effective, route for consumers.’
Providing background to its review, the DBT noted that when it was introduced in 2015, the regime was intended to make it easier for consumers, including businesses, to seek redress where they have suffered loss due to breach of competition law. It said that since then, the regime has developed and expanded significantly: ‘tens of billions’ of pounds in damages have been claimed, and ‘hundreds of millions’ of pounds spent on legal fees. The DBT said this was far higher than anticipated in the original impact assessment, which estimated the total cost to business to be just £30.8 million per annum.
The DBT also noted that the type of case being brought before the CAT has also developed in ‘unexpected’ ways. When the regime was introduced, it was expected that most cases would be follow-on claims, brought after the Competition and Markets Authority (CMA) or European Commission have already investigated anti-competitive behaviour and made an adverse finding. However, approximately 90% of the current caseload is now made up of standalone cases, the DBT said.
The government also pointed out that only one case (Justin Le Patourel v BT Group Plc [2024] CAT 76) has reached judgment in the CAT, with other certified cases generally concluding in settlement outside of court. This means that there has been limited precedent set on key issues such as damages and distribution, it asserted.
Proponents of the collective actions regime have pointed out that it is still relatively new, and has been subject to much challenge by defendants. But while it will inevitably take time to bed in, they argue that the regime is already effective in improving corporate behaviour and levelling the playing field for consumers.
The government said its review will also take into account existing work relevant to the regime, such as the Civil Justice Council (CJC)’s recent report on litigation funding.
The following article was contributed by Kevin Prior, Chief Commercial Officer of Seven Stars Legal Funding.
On Friday 1st August 2025, the Supreme Court delivered its ruling on car finance commission complaints. While banks avoided the massive £44 billion liability some predicted, one customer called Johnson won his case - and that victory has opened the door for thousands of similar claims totalling somewhere between £9bn and £18bn – still a huge market.
The Bottom Line: Johnson proved his finance deal was "unfair" because:
The dealer received a massive undisclosed commission (55% of all the interest he paid)
He was misled about getting independent advice when the dealer was actually tied to one lender
Important information was hidden in small print
What This Means
The Supreme Court has given us a clear roadmap. Claims will succeed where customers can show:
Excessive hidden commissions (Johnson's was 55% of his interest payments)
Misleading sales practices - claiming to offer "best deals" while being tied to one lender
Pre-2021 agreements often have the strongest cases
Why This Is Good News
No government bailout risk - the ruling removes fears of political intervention to protect banks
Clear success criteria - we now know exactly what makes a winning case
Settlement pressure - lenders know more claims are coming and want to avoid court
Immediate opportunity - claims can start now without waiting for regulators
Our Position
Our cautious approach to date has been vindicated. While others rushed in with untested legal theories, we waited for clarity. Now we have it.
The car finance opportunity is very much alive - it just requires smarter case selection. We're actively evaluating opportunities and expect to be funding cases that meet the Johnson criteria in the coming weeks.
The FCA will announce their compensation scheme plans in October, but the legal pathway is already clear. Well-selected cases with Johnson-style facts have strong prospects of success.
A Texas bankruptcy judge has voided a $2.3 million litigation funding agreement between GLS Capital and a Chapter 11 liquidation trust, in a decision that may reverberate across the bankruptcy and legal funding sectors.
An article in Bloomberg Law reports that Chief Bankruptcy Judge Stacey G. Jernigan ruled the funding deal—entered into by trustee David Gonzales—was an "abuse of discretion," finding it failed to benefit creditors and lacked proper court oversight. The deal gave GLS the right to nearly $7 million in repayment (a 3x return), plus 12% of any proceeds beyond that, and included a $75,000 broker fee. Judge Jernigan noted that the financing appeared structured in a way that made it difficult for creditors to receive any meaningful recovery, commenting that “it’s hard to see how the juice will ever be worth the squeeze.”
The judge was particularly troubled by the trustee’s failure to seek prior court approval and disclose the agreement, which she found to be a serious breach of duty. As a result, she not only voided the agreement but also removed Gonzales from his trustee position. GLS Capital and the trustee have both signaled plans to appeal.
Ken Epstein, a litigation finance broker and former investment manager at Omni Bridgeway, suggested this ruling is more of an outlier than a trendsetter. While he acknowledged that courts may struggle with understanding litigation finance, he emphasized that most funders approach these agreements with appropriate safeguards.
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