Content for the Public

The International Legal Finance Association has filed its response to the UK Government’s consultation on competition redress, arguing that reforms intended to speed up the opt-out collective actions regime must not add cost or complexity that makes meritorious claims harder to fund.

The submission responds to the Department for Business and Trade’s consultation on “Swifter and Simpler Competition Redress, Regulatory Appeals and Competition Enforcement,” which opened on 17 July and closed on 25 September. ILFA’s central argument is that the Competition Appeal Tribunal and the appellate courts have already developed workable mechanisms for overseeing class representative suitability, and that the Government should deliver clarity through guidance and the formalisation of existing practice rather than new statutory or procedural requirements.

“Third-party litigation funding is the cornerstone of the opt-out collective actions regime,” said Neil Purslow, Chairman of the Executive Committee of ILFA. “Without it, consumers and small businesses would have no realistic means of bringing meritorious claims against well-resourced defendants. In our response, we make it clear that any new reforms must not inadvertently introduce cost or complexity, which only serve to make valid claims harder to bring.”

ILFA ties the Government’s proposal to permit damages-based agreements in collective proceedings to the unresolved question of funder returns. “Crucially, the Government’s proposal to permit damages-based agreements in collective proceedings underscores the urgent need to reverse the PACCAR ruling retrospectively,” Purslow said. “To keep this regime viable and investable, we must give funders earlier certainty over returns and introduce better cost budgeting to rein in unpredictable, disproportionate costs.”

On costs, the association supports mandatory costs budgeting for claimants and defendants alike from certification onwards, and greater use of alternative dispute resolution where it is required early and backed by real costs sanctions. It also backs a central CAT website for claims and settlements, while cautioning that efficiency measures such as reduced panel composition may yield only marginal savings.

“Maintaining a true equality of arms is essential,” Purslow said. “Large defendants should not be allowed to weaponise structural hurdles to quash meritorious claims and ordinary businesses and consumers must remain empowered to hold the powerful to account.”

Law firms, funders and legal departments are being sold AI for contract review, legal research and citation checking, and the models change every few months. So we looked only at independent studies published in 2026 that tested the current generation of models from OpenAI, Anthropic and Google on real legal tasks. The short version: the best models are now genuinely good at reading and extracting from documents you give them, still unreliable at recalling law from memory, and the commercial legal research tools lag behind the best custom systems.

At a Glance

Best overall model for legal document work: Google's Gemini 3.1 Pro. It was at or near the top in every 2026 study that tested it, and it was usually the fastest and cheapest of the leaders. OpenAI's GPT-5.5 found slightly more errors in contract review, and Anthropic's Claude models were the most careful about not flagging problems that weren't there.

Best accuracy recorded on a full legal task: 92%, on a 50-state statutory research test run by Stanford, achieved by a purpose-built research tool. The lesson is that how the AI is set up matters as much as which model sits underneath it.

Range of accuracy: from under 7% (asking a model to recall exact case citations from memory) to 99–100% (catching a citation to the wrong case when the model can read the source). Most real-world document tasks landed between 60% and 85%.

Westlaw and Lexis AI: 58% and 64% accuracy on a Stanford statutory survey test, below a custom-built tool at 83–92%.

Biggest single improvement: giving the model the actual documents instead of asking it from memory cut fabricated citations from roughly 15–40% to about 4–15%, and to under 0.2% with a well-built retrieval system.

Key Takeaways

The model to use. For contract review and extraction, start with Gemini 3.1 Pro. It matched the top performer on catching contract errors (74% vs. 75%) at about one-seventh of the cost and in 90 seconds instead of nine minutes. If catching every possible issue matters more than time or cost, GPT-5.5 with reasoning turned on found the most. For checking citations in a brief, the best 2026 results came from GPT-5 running as an agent and from Claude Code with Claude Opus, which was the most precise.

How to Use It

• Give it the documents. Never ask a model to supply case law or citations from memory.
• Turn on the model's "reasoning" or "thinking" mode for review work. It improved error-catching by 9 to 11 points in contract review.
• Use it as a first pass and a second reviewer, not the final reviewer.
• For research, use a tool that pulls from a full, current database of the law, because weak retrieval, not the model, causes many of the errors.

What to Expect

• Contract extraction (pulling out dates, parties, termination and liability terms): about 80–84% accuracy for the best models.
• Final contract proofreading (defined terms, cross-references, inconsistent language): the best models catch about three-quarters of errors. On a 60-page agreement, expect it to miss some.
• Citation checking: nearly all citations to the wrong case get caught, but wrong pinpoint pages slip through 20% to 60% of the time.
• Research answers grounded in the right documents: roughly 6–11% of answers still contain an unsupported statement.

What to Look Out For

• Citations from memory. When asked to recall exact citations without sources, even the best model scored under 7 out of 100, and 20 of 21 models gave confident, wrong answers more than 94% of the time.
• Right case, wrong page. Models tend to approve a citation because the case is on the right topic, even when the cited page doesn't support the point.
• Questions with a false premise. If your question assumes something that isn't true, models often go along with it.
• Legal research tools' marketing. Westlaw AI and Lexis+ AI trailed a custom-built tool by 19 to 25 points on a Stanford test.
• Studies funded by vendors. Some of the best-looking results come from companies selling legal AI. Check who ran the test.

Best Practices

• Ground every task in source documents, and require the model to quote the passage it relied on.
• Check every citation yourself at the pinpoint page before filing. Automated checkers help but don't replace this.
• Turn on reasoning mode for review tasks and accept that it's slower.
• Test a model on a few of your own documents before rolling it out. Rankings change by task.
• Re-test when a new model version arrives; this field moves in months, not years.
• Keep a human reviewer accountable for anything that goes to a court, a client or a counterparty.

What the Studies Found

Contract proofreading. In August 2026, researchers had experienced lawyers plant errors in contracts (misused defined terms, wrong cross-references, wrong party names, contradictions) and tested ten current models on catching them. GPT-5.5 caught 75% of errors, Gemini 3.1 Pro 74%, Claude Sonnet 4.6 69% and Claude Opus 4.7 62%. GPT-5.5 cost $1.38 per contract and took about nine minutes; Gemini 3.1 Pro cost $0.19 and took about 90 seconds. Turning on reasoning mode added 9 to 11 points. Every model was far cheaper than a lawyer, and none was close to perfect.

Contract extraction. A May 2026 study tested models on pulling 26 standard fields out of contracts. Among the major models, Gemini 3.1 Pro scored highest (82%), with Claude Opus 4.6 (82%) and Claude Sonnet 4.6 (80%) close behind and GPT-5.4 at 78%. A smaller legal-specific model built by the study's authors scored 84% at far lower cost. The authors work for Onit, which makes that model.

Made-up citations and facts. A January 2026 study had expert reviewers check 2,700 legal answers from 12 models. Asked without source documents, the best models (GPT-5.2 and Gemini 3.0 Pro) cited something false about 15–17% of the time, and the worst over 30%. Giving the models the relevant documents cut that to about 4–15%. A more carefully built retrieval system brought it below 0.2% for every model.

Research with sources. A March 2026 study found that when models answer from retrieved legal texts, Gemini 3.1 Pro produced unsupported statements 5.7% of the time versus 11.3% for GPT-5.2, and that the quality of the search step mattered more than the choice of model. Its authors sell the search component that performed best. An August 2026 study of eight research setups found unsupported answers ranging from under 10% for the best to nearly half for the worst, with the worst results on questions built on a false assumption.

Westlaw and Lexis. In a February 2026 Stanford study, researchers tested legal AI tools against a Department of Labor survey of state unemployment insurance laws. Westlaw AI scored 58% and Lexis+ AI 64%, while a custom statutory research tool scored 83%, rising to 92% after the researchers found that some of its "errors" were gaps in the government's own survey.

Citation checking. A June 2026 study found more than 1,000 court filings containing fabricated citations, a number growing every year, and tested AI checkers on catching them. GPT-5, working as an agent that looks up cases, caught 83% of planted errors; Claude Code running Claude Opus 4.8 was the most precise and scored best overall. No model reliably caught wrong pinpoint cites, partly because page numbers often sit behind Westlaw and Lexis paywalls. A separate August 2026 study found models catch 93–100% of citations to the wrong case but miss many citations to the wrong page, and even GPT-5.4 with full reasoning missed 40% of wrong pinpoints in court opinions.

Citations from memory. A May 2026 study built from 1,000 real U.S. judicial opinions asked 21 models to recall exact case citations without any sources. The best, Claude Sonnet 4.5, scored under 7 out of 100.

The Bottom Line

The 2026 research is consistent: today's best models, led by Gemini 3.1 Pro, GPT-5.5 and Claude, are useful and cheap for first-pass contract review and extraction when they work from the documents in front of them. They still invent law when asked from memory and still miss wrong pinpoint citations, so a lawyer has to verify anything that leaves the building.

Sources (All 2026)

• Bang et al., "ContractScrub: A benchmark for final review of legal contracts" (Aug. 2026), arXiv:2608.20204
• Lincoln et al., "A Few Good Clauses: Comparing LLMs vs Domain-Trained Small Language Models on Structured Contract Extraction" (May 2026), arXiv:2605.05532
• Dantart, "Reliability by design: quantifying and eliminating fabrication risk in LLMs" (Jan. 2026), arXiv:2601.15476
• Butler and Butler, "Legal RAG Bench: an end-to-end benchmark for legal RAG" (Mar. 2026), arXiv:2603.01710
• Das et al., "How Much Do Legal RAG Systems Still Hallucinate?" (Aug. 2026), arXiv:2608.14210
• Afane et al., "Benchmarking Legal RAG: The Promise and Limits of AI Statutory Surveys" (Feb. 2026), arXiv:2603.03300
• Liu, Stammbach and Henderson, "Who Checks the Citations? Benchmarking Legal Hallucination Detection" (June 2026), arXiv:2606.21155
• Verma, "Is this Citation on Point?" (Aug. 2026), arXiv:2608.12571
• Chen et al., "LegalCiteBench: Evaluating Citation Reliability in Legal Language Models" (May 2026), arXiv:2605.10186

The following was contributed by Eric K. Schuller, President, The Alliance for Responsible Consumer Legal Funding (ARC).

Recent criticism has raised questions about cost, Wall Street investment, settlement influence, medical treatment, litigation costs and consumer protection. Those questions deserve answers. But the answers should begin with what Consumer Legal Funding actually is, how consumers use it, and the protections states are putting into law.

A Debate That Needs More Precision

Consumer Legal Funding has become the subject of increasingly negative headlines. Some articles characterize the product as a “lawsuit loan” or “predatory lending.” Others connect it to Wall Street securitization, social inflation, nuclear verdicts, medical treatment, prolonged litigation or outside influence over settlements. Still others discuss Consumer Legal Funding in the same breath as multimillion-dollar commercial Third-Party Litigation Financing.

Those are serious claims. Consumers deserve transparency. The legal system must remain independent. Attorneys must exercise their own professional judgment. Funding companies should not control settlements, direct medical treatment or pay improper referral fees.

But a serious debate also requires precision. Allegations involving a particular company should not define an entire industry. Commercial litigation investments should not be treated as interchangeable with funds provided to an injured consumer for household expenses. And criticism should be weighed against something frequently missing from the discussion: what consumers themselves say about why they use the product and whether it helped them.

ARC’s 2026 Consumer Legal Funding Survey provides that perspective. Across most survey questions, 576 consumers responded. The results portray a product being used during genuine household financial disruption, not as a mechanism for financing litigation.

Start With the Consumer, Not the Lawsuit

The typical need for Consumer Legal Funding begins after the event giving rise to the legal claim has already occurred. A person is injured, income is interrupted, and household obligations continue while an insurance claim or lawsuit remains unresolved.

According to ARC’s 2026 survey, 72.08% of respondents were not employed when they received Consumer Legal Funding. Among respondents addressing the reason, 65.72% said their lack of employment resulted from the circumstances that created the need for funding, such as an automobile accident.

The financial pressure was basic and immediate. 73.03% reported struggling with rent or mortgage payments, 61.30% with utilities and 60.07% with food. The survey did not depict consumers primarily seeking money for attorneys, experts, depositions or court costs. It depicted people trying to maintain ordinary household stability while a legal claim remained pending.

That distinction is now reflected in law. Kansas’s Transparency in Consumer Legal Funding Act defines Consumer Legal Funding as a non-recourse transaction involving a contingent right to potential proceeds and expressly states that the funds are used for household or personal expenses, not expenses directly related to prosecuting the legal claim. Utah’s 2026 law separately defines consumer maintenance funding and commercial maintenance funding.

That is not semantics. It is the difference between funding a person’s life during litigation and funding the litigation itself.

Wall Street, Securitization and the Underlying Consumer Transaction

Recent reporting has focused heavily on Consumer Legal Funding receivables being financed or securitized by institutional investors. That may sound far removed from the consumer who needs help paying rent, but two questions should be separated.

How a funding company obtains capital is one question. What rights the company obtains from the consumer is another.

Institutional capital does not by itself determine whether the consumer received clear disclosures, whether the transaction was non-recourse, whether the company can influence the claim, or whether the funds were used for household expenses. Those questions are governed by the contract and, increasingly, state law.

There is also an important caution about using broader allegations of personal-injury fraud to support criticism of Consumer Legal Funding. The New York Times article discussing Wall Street investment also referenced lawsuits brought by Uber alleging that personal-injury law firms and medical providers conspired to pursue exaggerated or fabricated injury claims. Yet just days before the Times article was published, a federal judge in New York dismissed Uber’s case against three personal-injury firms and related defendants. The court concluded that Uber had not plausibly alleged the RICO conspiracy it claimed and had not yet established the required injury. The dismissal does not establish that every underlying personal-injury claim was legitimate, and Uber has pursued similar litigation elsewhere. But it is an important reminder that allegations contained in a lawsuit are not the same as proven facts and should not be used to characterize Consumer Legal Funding generally.

Kansas law even distinguishes the Consumer Legal Funding company from banks, lenders, financing entities and special-purpose entities that finance the company or receive security interests in contracts. Securitization can be a legitimate subject for oversight, but it should not replace analysis of the actual consumer transaction.

The “Predatory Lending” and Cost Criticism

One of the most common criticisms is that Consumer Legal Funding is expensive. Articles frequently convert charges into annualized percentage rates, highlight compounding, or present examples in which the amount due grows substantially while a case remains unresolved.

Cost matters. Consumers should know what they are agreeing to pay, how charges accumulate and the maximum amount that can become due. But calling the transaction a high-interest “loan” can leave out an essential feature: Consumer Legal Funding is non-recourse.

Unlike conventional recourse credit, repayment depends on a recovery from the legal claim. Kansas law requires the contract to state that if there is no recovery, the consumer owes nothing to the funding company, absent fraud or a material contractual violation. California similarly defines Consumer Legal Funding as a non-recourse transaction involving the purchase of a contingent right to potential legal proceeds.

That does not make price irrelevant. It makes transparency more important.

Modern state regulation addresses that concern directly. Kansas requires contracts to clearly disclose the funded amount, one-time charges, how charges accrue, a payment schedule and the maximum total amount the consumer may be obligated to pay. It also provides a 10-business-day right to cancel. New York likewise requires clear contracts, disclosure of charges and maximum obligations, and a rescission period.

The constructive response to concerns about cost is not to pretend cost does not matter. It is to ensure consumers receive understandable information before entering the transaction and meaningful time to reconsider it.

Do Consumers Understand What They Are Signing?

Another recurring criticism is that financially stressed consumers may not understand the agreements they enter.

The ARC survey provides a direct consumer-reported counterpoint. 87.70% of respondents said they fully understood the terms of their contract, while 90.42% said they understood their financial obligations.

Those numbers should not be used to argue that disclosure requirements are unnecessary. They support the opposite conclusion: understandable contracts and meaningful disclosures should be the standard.

Kansas requires contracts to use common, everyday language and to be completely filled in before presentation to the consumer. New York similarly requires contracts to be clear and coherent and requires attorney acknowledgment that mandatory disclosures have been reviewed with the consumer. These protections are designed to reinforce informed decision-making rather than substitute for it.

The survey also provides another important measure of consumer experience: 90.70% said they would use Consumer Legal Funding again if they were in need, and 87.35% said they would recommend the company they worked with.

No survey means every consumer had a positive experience. But those results deserve to be part of any discussion that portrays consumers broadly as victims of a product they neither understand nor value.

Can a Funder Control a Settlement or Prolong Litigation?

Some of the most serious criticism suggests that funding companies may prevent settlements, pressure consumers to hold out for larger recoveries or interfere with an attorney’s professional judgment.

Consumer Legal Funding companies do not operate that way.

Kansas law states that a funding company has no role in deciding whether, when or for how much a legal claim is settled. It may seek information about the status of the claim, but it may not interfere with the independent professional judgment of the attorney.

That also addresses the broader claim that Consumer Legal Funding necessarily prolongs lawsuits. A consumer receiving funds for rent or utilities does not transfer control of the legal claim to the funding company. Settlement decisions remain with the consumer, advised by counsel.

At the same time, a consumer facing eviction, utility shutoff or difficulty buying groceries may experience intense pressure to resolve a claim quickly for reasons unrelated to its legal merits. Consumer Legal Funding is intended to provide household liquidity during that period, not dictate when a case settles.

Referrals and Individual Allegations

Recent media coverage has also highlighted allegations involving referrals and relationships among funders, lawyers and medical providers. These allegations warrant careful attention, but different financial arrangements should not be collapsed into a single category.

Modern laws also address referral relationships. Kansas prohibits funding companies from paying or accepting commissions, referral fees or other consideration involving attorneys, law firms and specified medical providers. It also restricts attorneys and their immediate family members from holding certain financial interests in a funding company serving the attorney’s consumer. California prohibits specified commissions and referral fees to attorneys and law firms. New York requires attorney acknowledgment concerning referral consideration.

If an individual company is alleged to have crossed those lines, the facts should be investigated and the applicable law enforced. But alleged misconduct is an argument for enforceable standards, not for treating prohibited conduct as the defining feature of Consumer Legal Funding.

Nuclear Verdicts, Social Inflation and the Conflation Problem

Insurance, trucking and tort-reform commentary increasingly connects “litigation funding” with nuclear verdicts, social inflation, higher insurance costs and a so-called tort tax.

The problem is that “litigation funding” can describe very different products.

Commercial Third-Party Litigation Financing may involve multimillion-dollar investments used to finance litigation expenses. Attorney portfolio financing and medical financing involve other arrangements. Consumer Legal Funding, by contrast, is a consumer-facing, non-recourse transaction designed to provide funds for personal and household needs.

Evidence concerning one category should not automatically be treated as evidence concerning another. The ARC survey reinforces the point: consumers reported struggling with housing, utilities and food. Kansas law expressly says Consumer Legal Funding does not include expenses directly related to prosecuting the claim, and Utah distinguishes consumer and commercial funding in statute.

If critics contend that Consumer Legal Funding itself causes nuclear verdicts or social inflation, the appropriate question is straightforward: what evidence specifically connects this consumer product to that outcome? Broad statistics about commercial litigation investment or aggregate tort costs do not answer that question by themselves.

The Claim That Consumer Legal Funding Is Unregulated

Another recurring impression is that Consumer Legal Funding operates in an unregulated environment. That description is increasingly difficult to square with the laws states have enacted.

Kansas requires clear contracts, extensive disclosures, a 10-business-day rescission period, a maximum repayment disclosure, attorney involvement, prohibitions on improper referrals, restrictions on funder control and enforcement authority.

New York’s Consumer Litigation Funding Act establishes regulation addressing disclosures, registration, attorney responsibilities, rescission, prohibited conduct and repayment. California’s Consumer Legal Funding Act regulates contract terms, referrals, disclosures and the period during which charges can accrue. Utah requires registration and disclosures, restricts certain attorney-provider relationships and expressly separates consumer from commercial funding.

Missouri has also enacted statutory provisions governing Consumer Legal Funding as part of its broader legislation addressing judicial proceedings.

These approaches are not identical, and reasonable policymakers can disagree about particular regulatory details. But collectively they demonstrate that there is a workable middle ground between no regulation and eliminating the product.

Consumer protection and consumer access do not have to be opposing goals.

Listen to the Consumers

The recent scrutiny of Consumer Legal Funding can serve a useful purpose if it produces better information, stronger standards and more precise distinctions.

Consumers should understand the cost. Contracts should clearly state what may be owed. Funding companies should not control settlements. Attorneys should remain independent. Improper referrals should be prohibited. Consumer funds should not be confused with money used to prosecute litigation. Allegations of misconduct should be investigated and violations enforced.

Those principles are increasingly embedded in state law.

But the debate should also include the people who use the product. ARC’s 2026 survey found consumers facing disrupted employment and difficulty paying for housing, utilities and food. It found high reported understanding of contracts and financial obligations. More than nine in ten respondents said they would use Consumer Legal Funding again if they needed it, and nearly nine in ten would recommend their funding company.

That does not eliminate every policy question. It does show that many consumers believe the product has value during a difficult period in their lives.

The better approach is not to ignore criticism or eliminate consumer choice. It is to address legitimate concerns with clear disclosures, rescission rights, attorney safeguards, prohibitions on interference, restrictions on improper financial relationships and effective enforcement, while preserving access to a non-recourse product designed to help consumers meet household needs while legal claims are pending.

Consumer Legal Funding: Funding Lives, Not Litigation.

Below is our LFJ Conversation with Eric Schurke, CEO, North America at Moneypenny.

Eric Schurke is CEO, North America at Moneypenny, a global leader in customer conversations. He is passionate about the intersection of people, communication and technology, and how businesses can use AI to improve customer experience without losing the human judgment and empathy that build trust. He regularly writes and speaks on customer experience, AI and people-first leadership.

Moneypenny’s consumer research found that 38% of people aren’t comfortable using AI for any legal communication, rising to 51% among Baby Boomers. For funders and the firms they back, where is the line between what AI should handle at intake and what still needs a person on the phone?

I don’t think the answer is to draw a fixed line between AI and people. The key is designing an intake process that understands when one should give way to the other.

AI can be incredibly useful at the beginning of an enquiry. It can answer straightforward questions, gather basic information, establish the reason for contact, capture key details and make sure an enquiry reaches the right place quickly. Those are all areas where speed and consistency can improve the experience.

But legal and funding conversations aren’t always straightforward. Someone may be worried, confused or dealing with a difficult situation, and there will be moments when they want reassurance or need to explain something that doesn’t fit neatly into a predefined process. That’s where a person becomes essential.

Our research is a reminder that businesses can’t assume everyone is comfortable with AI. The best systems give people choice and make the transition to a human seamless, with the context already captured so the claimant doesn’t have to start again.

For me, the principle is simple: use AI for speed and structure, and people for judgment, reassurance and trust.

You’ve argued that funders often win or lose an opportunity before case review even begins. What actually happens in those first few minutes of contact that determines whether a claimant stays in the process?

Those first few minutes answer some very basic but important questions for the person making contact: Have I reached the right place? Does this organization understand what I need? Is someone taking me seriously? And what happens next?

Good intake needs to gather enough useful information to move an enquiry forward without making that first interaction feel like an interrogation. That’s why I think first contact deserves more attention. It’s not simply an administrative stage before the “real” work begins; it’s where trust and momentum start to form.

If the experience is slow, confusing or impersonal, a claimant may disengage before the funding team has even had an opportunity to assess the case. Get it right, and the claimant understands the next step while the funder has the context needed to progress the enquiry.

Most intake technology is sold on volume – enquiries handled, calls deflected, hours saved. Why are conversion and client outcomes the better measures, and what does a funder lose by optimizing for the wrong one?

Volume tells you how busy the system is. It doesn’t necessarily tell you whether it’s working.

You could automate thousands of interactions and reduce handling time considerably, but if good enquiries are dropping out, information is incomplete or people are having to contact you again because nothing was resolved, you’ve created efficiency on paper rather than value for the business.

I’d ask: Did the enquiry progress? Was the right information captured? Did it reach the right person? Was unnecessary follow-up avoided?

That’s the real ROI of a conversation. Passing a message is activity; gathering what’s needed for the next stage creates progress. For funders, optimizing purely for volume risks making the top of the funnel look efficient while valuable opportunities are being lost underneath it.

There is a wider lesson here for AI, too. We’re seeing businesses invest heavily in technology without always being clear about the outcome they’re trying to improve. That’s where an AI value gap can emerge; when adoption increases, but the commercial return doesn’t necessarily follow.

Consumer legal funding is drawing more state-level regulation in the U.S., much of it centered on disclosure and how claimants are communicated with. How should that shape the way a funder designs an AI-assisted intake process?

It makes clear boundaries and good governance even more important.

I’m not a lawyer, so I wouldn’t tell funders how to interpret individual state requirements, but from a customer communication perspective, AI should make a compliant process easier to follow, not harder to understand.

Funders need to define what an AI system can say and do, what information it can collect and when human involvement is required. If a conversation involves important disclosures, nuanced questions or judgment, there should be a clear escalation path.

Technology can support consistency, but it shouldn’t remove human oversight. In a regulated environment, knowing what your AI shouldn’t do can be every bit as important as knowing what it can. I’d build the guardrails at the beginning rather than adding them after deployment.

Looking out two to three years, what does a well-run intake operation at a litigation funder look like, and which parts of it do you expect will still be human?

I think the best intake operations will feel simpler to the claimant, even though the technology behind them will be more sophisticated.

AI will increasingly handle predictable work: answering routine questions, gathering and structuring information, identifying missing details, scheduling next steps and routing enquiries with the right context. It will also work behind the scenes, reducing administration and helping people find information quickly.

What won’t disappear is the human role at the moments that matter most. When somebody has a complicated story, is uncertain about the process, needs reassurance or simply doesn’t fit the expected pattern, judgment and empathy will remain essential.

So, I don’t see the future as AI-led or human-led. It will be intelligently blended. The best technology will almost disappear into the experience; the claimant will simply feel understood and know they’re moving forward.

The following was contributed by Eric K. Schuller, President, The Alliance for Responsible Consumer Legal Funding (ARC).

The Numbers Haven’t Changed, and That’s the Story. Three Years Apart, Consumers Report the Same Financial Need and the Same Value in Consumer Legal Funding.

The Alliance for Responsible Consumer Legal Funding (ARC) has released its 2026 Consumer Survey, providing a new look at how consumers use Consumer Legal Funding and why access to the funds remains important while legal claims are pending.

Hundreds of consumers from across the country reported turning to the product for help paying rent or a mortgage, utilities, food, transportation, and other essential household expenses that cannot wait for the legal system to run its course.

ARC’s second major consumer survey in three years reinforces the findings from 2023. Across both surveys, consumers describe a real need for funds to support everyday life, and more than nine out of ten say they would use Consumer Legal Funding again if needed.

The Need Has Remained Remarkably Consistent

Consumer Legal Funding is sometimes confused with financing the costs of litigation. The survey data tells a very different story.

Consumers reported needing financial assistance for the ordinary expenses of everyday life while waiting for their legal claims to be resolved. Housing, utilities, food, transportation, and other household obligations do not stop because someone has been injured or has a pending legal claim.

Perhaps the most striking finding from the comparison involves housing.

In 2023, 73.00% of respondents reported difficulty paying their rent or mortgage. In 2026, the number was 73.03%.

That consistency is significant. Two separate groups of consumers, three years apart, identified essentially the exact same financial pressure as the leading reason they needed assistance.

The same pattern appears with other basic necessities. Difficulty paying utilities increased from 58.35% in 2023 to 61.30% in 2026, while difficulty paying for food increased from 54.00% to 60.07%.

These consumers are not describing litigation expenses. They are describing household expenses.

They are trying to keep a roof over their heads, keep the lights on, put food on the table, make car payments, and maintain financial stability while their legal claims move through the system.

That is the real-world function of Consumer Legal Funding: Funding Lives, Not Litigation.

An Accident Can Create an Immediate Financial Crisis

The circumstances surrounding the need for funding are equally important.

In 2023, 70.64% of respondents were not employed when they received Consumer Legal Funding. In 2026, that number was 72.08%. Even more telling, the percentage reporting that their lack of employment resulted from the circumstances creating their need for funding, such as a car accident, increased from 58.94% in 2023 to 65.72% in 2026. Personal injury and automobile claims remained the dominant claim type, representing 76.83% of respondents in 2023 and 78.45% in 2026.

“Since my injury, I’ve had to retire from work. My funding company has checked in while waiting on my settlement to see if I need additional help through the process. This has been positive for me.”

The practical sequence is easy to understand.

A consumer is injured. That injury may interfere with the person’s ability to work. Household bills continue arriving. Meanwhile, the legal claim may take months or longer to resolve.

The legal system operates on one timeline. A family’s financial obligations operate on another.

Consumer Legal Funding can help bridge that gap by providing financial resources while ordinary household expenses continue and the consumer’s legal claim remains unresolved.

“I received money early in the process when I was very stressed, in a lot of pain, and overwhelmed because of my head injury. They made it easy for me to understand and receive.”

That distinction is essential to understanding the product. Consumer Legal Funding is not about paying attorneys’ fees, experts, discovery costs, or other litigation expenses. The surveys repeatedly identify rent or mortgage payments, utilities, food, transportation, and other household obligations as the financial pressures consumers are facing.

For Many Consumers, There Are Few Alternatives

One of the clearest findings from the ARC surveys is that many consumers appear to have very limited financial alternatives when they turn to Consumer Legal Funding.

In 2023, 39.13% of respondents selected “None” when asked which listed financial alternatives they had used before obtaining Consumer Legal Funding. By 2026, that number had increased to 43.19%. Reliance on family and friends was also significant, although it declined from 38.22% in 2023 to 34.51% in 2026. By comparison, credit cards were used by 19.68% of respondents in 2023 and 21.42% in 2026, while personal loans were used by only 11.90% and 13.45%, respectively.

Taken together, these findings paint an important picture. For a substantial number of consumers, Consumer Legal Funding is not simply one financial option among many. More than four in ten respondents in the 2026 survey reported using none of the listed alternatives before turning to Consumer Legal Funding, while many others had relied on family or friends rather than traditional financial products.

That makes access to Consumer Legal Funding particularly important. When someone has been injured, is unable to work, and is struggling to pay rent, utilities, food, or transportation expenses, there may be very few realistic places to turn for financial assistance while a legal claim remains pending.

“Thank you for helping me when everyone else turned me away.”

This is an important consideration for policymakers. Restrictions that significantly reduce access to Consumer Legal Funding do not create new financial alternatives for these consumers. They simply risk removing an option that many consumers are using at a time when their other choices appear limited.

The underlying financial need remains. The question is whether consumers will continue to have access to a product that can help them meet that need while they wait for their legal claim to be resolved.

Consumers Continue to Say They Would Use It Again

Perhaps the clearest measure of consumer satisfaction and the value consumers place on the product is what they say they would do if faced with the same need again.

The results are significant not simply because they are high, but because they are remarkably consistent.

In 2023, 91.08% of respondents said they would use Consumer Legal Funding again if needed.

Three years later, 90.70% said the same thing.

That is a difference of only 0.38 percentage points between two separate surveys. Recommendation rates were similarly strong, with 89.43% in 2023 and 87.35% in 2026 saying they would recommend their funding company.

Those numbers deserve a prominent place in the public discussion about Consumer Legal Funding.

A single survey showing that more than nine out of ten consumers would use the product again would be noteworthy. Two separate surveys, conducted three years apart among different groups of consumers, producing virtually identical results, are even more compelling.

91.08% in 2023. 90.70% in 2026.

More than nine out of ten consumers in both surveys said they would choose Consumer Legal Funding again if they needed it.

And nearly nine out of ten in both surveys said they would recommend their funding company.

These are not opinions from people observing the product from the outside. These are responses from consumers who actually used Consumer Legal Funding during a period of financial need.

“The process was easy, and the money was helpful. I would recommend this company to everyone who is in a situation like mine.”

Their experiences deserve to be part of the policy discussion.

Hundreds of Consumers Across the Country Are Telling a Consistent Story

The strength of the ARC surveys is not based on a single percentage or a single group of respondents.

Hundreds of consumers participated in each survey, with respondents coming from across the country.

About 73% in both surveys struggled with rent or mortgage payments. Basic household necessities remained the dominant reason consumers needed financial assistance. A substantial percentage reported using none of the listed financial alternatives before obtaining Consumer Legal Funding. And more than 90% in both surveys said they would use the product again if needed.

That is not simply one survey producing a favorable statistic. It is a repeated consumer story.

Two Surveys, One Clear Message

One survey provides a snapshot. Two surveys conducted three years apart provide something more meaningful: the ability to determine whether the same basic patterns appear again.

ARC’s 2023 and 2026 surveys independently tell essentially the same story. Consumers experience accidents, injuries, or other events that can disrupt employment. Their household expenses continue while their legal claims remain unresolved. Housing is consistently the leading financial pressure, with utilities and food also affecting significant majorities of respondents.

And after experiencing Consumer Legal Funding firsthand, more than 90% in both surveys said they would use it again if they needed it.

That repeated consumer response should matter to policymakers.

Consumer Legal Funding should be responsibly regulated, and strong consumer protections and meaningful industry standards are entirely compatible with preserving access. But regulation should begin with an understanding of why consumers need the product and what consumers themselves say about its value.

When policymakers consider laws or regulations that could significantly restrict Consumer Legal Funding, they should also consider what happens to the consumer afterward.

The accident has not disappeared. The pending legal claim has not suddenly been resolved. The rent has not gone away. Neither have the utility bill, grocery bill, car payment, or other everyday household obligations.

The most important voices in this debate should include the people who have actually faced that difficult period and used the product.

Across two surveys, three years, and hundreds of consumers from across the country, the message is remarkably consistent:

The need is real. The product serves an important purpose. And overwhelmingly, consumers say they would use it again.

A version of this commentary first appeared in The National Law Review.

Below is our LFJ Conversation with Ray DeLorenzi, founder of RebuttalPR.

RebuttalPR was founded by Ray DeLorenzi, who has counseled clients from the halls of Congress to the courtroom in a wide range of civil cases and adversarial regulatory enforcement actions. Ray’s groundbreaking communications campaigns have helped clients achieve verdicts and settlements totaling tens of billions of dollars.

Over the last 15 years, Ray has played a role in nearly every high-profile mass tort and class action. Whether working with disabled former athletes, sexual abuse survivors, or people injured by defective products, Ray has devised media strategies to help clients solve problems and obtain justice when facing the most difficult challenges and circumstances. For each of the past six years, he was honored by Lawdragon as a Global 100 Leader in Legal Strategy & Consulting. Ray and RebuttalPR have also been ranked by Chambers in their Litigation Support category.

Prior to founding RebuttalPR, Ray was a partner at a DC-based public affairs and communications firm. Before that, he was communications director at the American Association for Justice (AAJ), formerly known as the Association of Trial Lawyers of America. At AAJ, Ray directed the association’s national media relations and grassroots efforts while serving as its on-the-record spokesperson. In addition to directing legislative and political issue campaigns, Ray also provided counsel to trial lawyers across the country on civil justice issues and cases from local courts to the U.S. Supreme Court. He also worked at AARP, providing media relations support on both legislation and the association’s line of products and services.

Ray is a graduate of The George Washington University and lives in the New York metro area.

To set the stage, give us a snapshot of Rebuttal PR. What does the firm do, who do you serve across the plaintiffs’ bar, funders and their counsel, and what did your years as communications director at the American Association for Justice teach you that shaped how the firm approaches litigation communications today?

RebuttalPR is a communications firm built specifically to serve the plaintiffs’ bar. When I was communications director at the American Association for Justice (AAJ), I saw firsthand how the corporate defense bar had built a sophisticated operation to undermine the civil justice system – whether through seeking to influence the courts, or to push legislators to pass tort reform that would eliminate people’s rights. I strongly believed then, as I do now, that the plaintiffs’ bar deserved to have the same communications firepower and expertise on their side, and that is why I founded RebuttalPR.

On a day-to-day basis, we provide public relations and communications counsel and support to plaintiffs’ law firms. We help our law firm clients tell their stories to the audiences they care about most: people in their communities, the media, legislators, and regulators. This could mean highlighting the complaints they file, the results they obtain, and the impact they have on the people they represent.

We are also frequently retained to provide communications counsel on behalf of lead plaintiffs’ counsel in class actions, multidistrict litigations, and major single event cases to counter the messaging apparatus that corporate defendants typically deploy in these high-stakes matters.

Lastly, we work with other stakeholders in the plaintiffs’ bar on their communications challenges and opportunities, whether that is trade associations that represent trial lawyers, or companies that support plaintiff firms, their clients, and the civil justice system at-large.

You have argued that narrative risk belongs in underwriting. Funders diligence merits, damages and duration, but rarely the media environment around a case. How does an adverse narrative actually move settlement timing and value, and what does diligencing that risk look like in practice before capital is committed?

Settlement timing and value are most strongly tied to litigation risk facing defendants based on the merits and procedural posture of a case. But the people involved in these cases don’t exist in a vacuum. They are at least as sensitive to the prevailing narrative, good or bad, as the wider public, and they make decisions accordingly.

For example, executives at companies who set reserves or who grant settlement authority read. In fact, oftentimes they receive curated daily news briefings highlighting exactly how their organization appears in mainstream, legal, and trade news outlets. They are also looking at social media and talking to colleagues and neighbors just like the rest of us. When negative news coverage builds, the internal memo arguing for a bigger number gets easier to write and the memo arguing to wait gets harder. The opposite is also true, which is why corporate defendants for decades have invested heavily in public relations campaigns to deflect liability.

The influence of news coverage goes beyond the initial headlines. Consider a publicly-traded defendant facing analyst questions on an earnings call about a litigation, or a regulator opening a probe after an investigative story runs. These events do not occur if the case is invisible.

Developing the scientific record is also incredibly important. Corporate defendants are notorious for generating “junk science” that they then claim supports their position. But one skeptical piece in a serious outlet can follow a litigation for years.

Risk is not one-sided. Corporate defendants of late have sought to paint every mass tort as a “lawsuit mill” story to undermine the integrity of the case and the legitimacy of the claims. This can decrease the value of a litigation if unanswered and add months if not years to its duration.

The diligence is not tremendously complicated. It should look like the media equivalent of a lien search. Get a baseline of what coverage already exists on the defendant, the product, the science, and the firms involved — volume and tone in particular. Check what search and AI answers surface, because that’s what a claimant, a reporter, an analyst, or a company executive sees. Profile the defense operation: who runs their communications, what they did in the last three analogous matters, whether they go quiet or go loud. Assess claim-integrity exposure honestly, especially where recruitment is ad-driven and high-volume. And find out whether anybody owns communications on the case at all (and it should never be a lawyer litigating the actual case).

An asset class this disciplined about duration cannot ignore one of its most important determinants.

Assume a funder buys the premise but wants to know what it costs and what it buys. What does communications support look like over the life of a funded case, from pre-filing through resolution, and how should a funder think about it as a line item: who owns it, when it should start, and what a realistic budget is relative to case size?

As it relates to a specific litigation (versus supporting a specific law firm), there are five phases, and each has a different cadence and strategy behind it. Note that none of these phases are asymmetrical; the best defense teams are counteracting at every stage, building their own relationships, etc.

Pre-filing is where the leverage is highest. Sixty to ninety days out you are deciding what the lawsuit is about in one sentence, modeling the defense response (as the defense is modeling their response), drafting messaging, and building relationships with the journalists who own the relevant beats to begin acclimating them to the case and key issues.

Filings are news moments that most firms unfortunately waste. This does not mean putting a press release on a news wire stating “we filed a lawsuit.” That is not news. What is news is the story behind the defendant’s misconduct – who was injured, what caused it, and what the case is all about – conveyed through direct engagement with reporters.

Discovery and motion practice is the long middle. Lower intensity, but this is where documents surface, where allies are identified, and where the key reporters are kept informed or forget you exist. It is also when a case can be tied into bigger stories already in the news.

Bellwether trials are full intensity, daily. A lot of different factors are at play here, such as geography, state or federal court, and what groundwork was laid in the first three phases.

Resolution is about settlement communications, claimant communications, and the record the litigation leaves behind, which determines how the next case in that space gets covered.

A budget structure varies depending on the current state of the litigation, but generally speaking, is tailored to the size of the case (from a time standpoint) as well as the communications challenges or opportunities it presents.

On ownership: lead counsel owns it. The communications strategy must always follow the litigation strategy, never lead it. Regular communication between lead counsel and the PR team helps ensure the right message reaches the right people at the right time. Those partnerships have been the most successful and fulfilling for us, and what we emphasize from day one.

You have said the plaintiffs’ bar is losing the messaging war on third-party litigation funding. The Chamber and ILR have spent a decade building the “foreign money in U.S. courts” frame while the funding industry and its law firm partners largely stayed quiet. Why did the industry cede that ground, what has it cost in the state disclosure bills and the federal rules debate, and what would a credible counter-narrative actually sound like?

To start, there is a real lack of understanding of what third-party litigation funding is, and groups like the U.S. Chamber have used that to their advantage. Is it a funder fronting case costs? Is it a line of credit? Do they have a stake in the outcome? What about funding provided to individual claimants?

There are a lot of wrinkles here, and as they say, if you’re explaining, you’re losing. The truth is that plaintiff lawyers for decades have been engaged in some form of litigation funding. There are countless stories of trial lawyers mortgaging their homes as they spend their last nickel on a case and cause they believe in.

Part of the issue is that funders are financial institutions run by people from finance and law. Traditionally, their instinct has been to hide from the press (too risky), stay silent, and hope the moment passes. This is not a long-term sustainable strategy, especially when the other side is actively attacking the legitimacy of litigation finance. What I found particularly interesting is that the financial sector, not so long ago, would work with the U.S. Chamber on key issues. You also have Big Law defense firms, which again, traditionally worked with the Chamber, now dipping their toes in the third-party funding waters and exploring contingency fee litigation and alternative fee arrangements. I would counsel the industry to embrace transparency, despite the industry’s reticence to go down that road. A strategy that focuses on transparency (and not just from plaintiffs) could be a way to counteract the Chamber’s narrative.

Your view is that ads buy attention while media earns it. The mass tort client-acquisition model runs on paid advertising that is expensive, increasingly regulated, and generates the exact optics the other side uses against the bar. Where does earned media do work that advertising cannot, and how should firms and their funders be reallocating between the two over the next 18 to 24 months?

Four things earned media does that no advertising budget can buy.

Third-party validation. An ad or claims on a firm’s own website are easy to discount or ignore, because they are obviously paid for. A reporter’s byline, or an endorsement from an outside group, carries different weight.

Spotlight on the defendant. No television ad has ever moved a reserve or prompted a question on an earnings call. News coverage and third party validation does both.

Referral and co-counsel flow. The most valuable case sources in this business are other lawyers, and other lawyers are not responding to your ad. They notice who is quoted on the litigation they’re watching and leading the biggest cases.

The regulatory environment. This is the one firms most consistently miss. Ad-driven acquisition is the single richest source of ammunition the other side has. Every “lawsuit mill” segment opens with a screenshot of somebody’s commercial. This is not to say advertising is all bad; it is important for people to know and understand their rights. But there are certainly tactful ways to do it.

The bigger shift is where discovery of lawyers is actually happening. We’ve spent much of this year researching how plaintiffs find law firms in the current age of AI, and the finding is consistent: when someone asks ChatGPT or Claude whether there’s a lawsuit about a product, the generated answer is assembled from news coverage, legal trade press, and ranking sites. Not from the firm’s landing page, and not from paid search, which does not appear in a generated answer at all (although OpenAI is dabbling in this area). A decade of SEO and PPC spend was buying position on a search results page whose importance is eroding. Earned coverage is one of the few inputs generative AI systems actually read.

On reallocation, I would not tell anyone to blow up their acquisition model. But a firm spending $500,000 a month on acquisition can take a couple percentage points off that to fund an earned program and still leave the machine running.

One warning: earned media does not scale on demand. No amount of capital can buy news coverage the moment you need it. That is exactly why the reallocation has to start now. Earned media build trust, reputation, and credibility in a way that paid media cannot.

The following piece was contributed by Eric Schurke, CEO, North America at Moneypenny.

Litigation finance is an industry built around measurement. Funders scrutinize risk, duration, capital deployment, potential returns and portfolio performance, because understanding what creates or erodes value is fundamental to making good investment decisions.

But there is another form of value creation that is much harder to see on a spreadsheet: the progress created by the hundreds of conversations, emails and interactions that surround a matter.

A call is answered. An email is sent. A follow-up is logged. A message is passed to an investment manager. All of that looks like work being done, but the more useful question is whether any of it actually moved the matter forward.

That distinction between activity and progress is one I think more leaders should be paying attention to.

Busy doesn’t always mean productive

Every interaction creates work, but productive communication should also remove work somewhere else.

If a conversation gathers the missing information needed to progress an assessment, resolves a question from a law firm, arranges the right follow-up or gets an issue to the person capable of resolving it, it has created value.

If it simply results in another message, another email or another task being added to somebody’s list, it may have created activity without creating much progress at all.

That matters in litigation finance because senior legal and investment professionals are an expensive and finite resource. Their time is best spent applying judgment to complex matters, assessing risk and building relationships, rather than chasing information or dealing with routine requests that could have been resolved earlier.

So perhaps productivity shouldn’t simply be measured by how efficiently communications are handled. We should also ask how much unnecessary work those communications remove.

Think about what happened next

At Moneypenny, this is something we’ve thought about a great deal because answering the phone is only a small part of what a well-managed conversation can achieve.

Depending on the business and the interaction, that might mean capturing detailed information, qualifying an inquiry, arranging an appointment, updating a system, following up an outstanding action or ensuring a complex conversation reaches the right person with the right context.

For a litigation finance business, the specifics will obviously be different, but the principle is the same: the value isn’t simply in handling the interaction; it’s in what happens because it was handled well.

That changes the questions leaders should ask.

Rather than only looking at volumes, response times or the number of interactions completed, look at outcomes. Did we obtain the information required? Did we resolve the issue? Did we eliminate another round of follow-up? Did we protect someone’s time? Did we move the matter to its next meaningful stage? Those measures tell you far more about productivity.

AI should create progress, not just efficiency

This becomes particularly relevant as AI takes on a greater role in business communication.

There is understandable enthusiasm around what automation can do faster and at greater scale but simply automating activity doesn’t necessarily create value. If AI answers a question but leaves the person unsure what to do next or captures information that still needs to be manually re-entered or clarified, the business may have made one interaction faster while creating more work downstream.

The real opportunity is to use technology to remove friction: handling routine requests consistently, capturing and organizing information, supporting faster routing and completing straightforward actions where appropriate.

Then, when an interaction requires commercial judgment, sensitivity, negotiation or expertise, it should move seamlessly to a person who can provide it.

The objective isn’t to automate the greatest possible number of interactions. It’s to create the best possible outcome from each one.

Communication is part of operational performance

This way of thinking also changes where communication sits within the business. It stops being something that happens around the “real work” and becomes part of how efficiently that work gets done.

In litigation finance, where matters can be complex, involve multiple stakeholders and continue over long periods, there is considerable value in reducing unnecessary friction. One well-managed interaction can prevent several follow-ups, clarify responsibility, surface an issue earlier or simply give the right person the information they need to make a decision.

Multiply those small gains across an organization and they become significant. That’s why leaders should start treating case progress as a productivity lens.

Not another metric for the sake of another dashboard, but a simple discipline: when we communicate, are we creating momentum or merely moving information around?

From measuring work to measuring value

Businesses have spent years becoming better at measuring activity. Technology has made it possible to track almost everything: calls, emails, response times, tasks, tickets and workflows.

The next step is to become better at measuring what all that activity achieves.

For litigation funders, that means looking beyond whether an interaction happened and asking whether it helped a matter progress, protected valuable expertise, strengthened a relationship or removed work further down the line.

Because being busy and being productive are not the same thing.

And ultimately, the most valuable conversation isn’t necessarily the longest, the fastest or even the most complex. It’s the one that gets something done.

—

Eric Schurke is CEO, North America at Moneypenny, the world’s customer conversation experts. He works with legal firms, litigation funders, and professional services to transform how they manage and qualify inbound opportunities. Eric is passionate about helping organisations strengthen deal flow, improve first impressions, and deliver exceptional client experiences from the very first interaction.

The president of the Alliance for Responsible Consumer Legal Funding has argued that consumer protection and access to legal funding are not competing goals, pointing to near-identical safeguards enacted in states at opposite ends of the political spectrum.

Writing in the National Law Review, Eric Schuller compares the frameworks adopted in Kansas, Utah, California and New York and finds the same core provisions recurring regardless of which party controls the legislature. The starting point is the product itself: consumer legal funding is non-recourse, so repayment depends solely on the proceeds of the claim and a consumer who recovers nothing owes nothing.

From there, the statutes converge on disclosure. Kansas HB 2518 requires agreements to use “common, everyday language” and to state all charges and the maximum amount the consumer could owe; New York requires “common, understandable language” alongside a repayment schedule. Cancellation rights follow a similar pattern, with Kansas and New York providing ten business days, Utah HB 280 extending its window from five days to ten, and California allowing five business days to rescind.

Each state also builds in the claimant’s attorney. Kansas requires an attorney acknowledgment confirming the disclosures were reviewed and that no referral fee was paid, without which the contract is null and void. All four bar funding companies from influencing the conduct, settlement or resolution of the claim, leaving those decisions with the consumer and counsel.

On enforcement, Kansas permits penalties of up to $10,000 per willful violation, California provides statutory damages and attorney’s fees, and New York allows a company to forfeit its right to recovery.

A new research brief from litigation finance and insurance provider Certum Group finds that corporate legal departments are broadly aware of litigation risk transfer products but almost never use them, a gap the firm describes as “the next frontier in corporate litigation strategy.”

According to the brief published by Certum Group, which surveyed 44 General Counsel and in-house litigation attorneys, roughly 70% of respondents are familiar with litigation funding but have never used it, while only about 6% have. The brief was authored by Kevin Skrzysowski, a Director at Certum Group, whose litigation funding team also includes Director William Marra, a former U.S. Supreme Court clerk.

The survey characterises in-house litigation risk as operational rather than existential. Employment and intellectual property disputes drew the highest concern levels, while roughly two-thirds of respondents reported no concern at all about antitrust or mass tort exposure. Decision-making was consistent across defensive and affirmative matters, with likelihood of success (~84%) and cost to pursue (~74%) the most frequently cited factors.

On affirmative claims, respondents said they would be more likely to proceed if cost and risk could be shifted to an insurer (~62%), a contingent-fee firm (~49%) or through claim monetisation (~46%). A litigation funder ranked lowest at ~28%. Looking forward, however, roughly 51% said they would consider litigation funding, ahead of capital protection insurance (~43%) and claim monetisation (~41%), with about 30% ruling out all such products.

Cost certainty (~51%) and budget constraints (~46%) were the leading drivers of interest. Among the small group that has used litigation funding, two-thirds reported satisfaction with the decision.

An Invenio LLP partner has published a detailed argument that the principal danger of artificial intelligence in litigation finance underwriting is not fabricated citations but the quiet erosion of the human judgment that underwriting depends on.

According to Real Talk About AI in Litigation Finance Underwriting, written by Brenna Legaard, large language models perform reliably on well-defined, data-rich tasks such as analyzing prior art and preparing claim charts, and they work without fatigue or anchoring bias. What they cannot do is predict case outcomes, because the training data does not contain them. Models learn from published opinions, while the vast majority of disputes end in confidential settlements that are never mapped. Legaard writes that models “have known knowns, perhaps known unknowns, and no unknown unknowns whatsoever.”

The piece cites a 2024 study finding hallucination rates between 58% and 88% on factual legal questions, with the weakest performance on less prominent cases, and notes that model accuracy degrades as input length grows. Its sharper concern is automation bias: decision-makers deferring to polished output under time pressure, so that “the model’s confident framing then becomes an unwary underwriter’s confident framing.”

Legaard draws a parallel to McKinsey research on insurance underwriting, where firms that mandated black-box models over human judgment found that staff lost faith in the models and underwriting skills atrophied. The recommended response is cultural rather than technical: open discussion of where AI use introduces confirmation bias, and hiring underwriters who interrogate outputs rather than merely producing them faster.

A New York Times investigation published Wednesday reports that some of the largest consumer legal funding companies are bundling cash advances made to personal injury plaintiffs into asset-backed securities sold to investors, and examines how that financing cycle interacts with a sharp rise in personal injury litigation.

As reported by The New York Times, reporters Ellen Gabler, Robert Gebeloff and Julie Tate identified six major funders that securitize their advances, accounting for more than 90% of advances nationwide according to industry trade group figures. The Times found more than two dozen securitization deals since 2020, representing hundreds of thousands of cases and raising $2.8 billion from investors. Advances carry fees and interest averaging 35% to 45% a year, and in one cited example a New York plaintiff who received $76,500 in advances owed at least $1.4 million by the time her case settled.

The article situates this alongside a 70% increase in personal injury filings in state courts over the past decade, and notes that since 2023 companies including Geico, Allstate, Uber and FedEx have brought at least 60 civil racketeering suits accusing lawyers and medical providers of inflating claims. Funders quoted in the piece dispute that fraud is widespread, with the American Legal Finance Association’s Jack Kelly arguing that cutting off securitization would cut off the supply of money to victims. The Times also reports that more than a dozen states have restricted third-party litigation funding, with West Virginia the first to explicitly limit securitization.

The Alliance for Responsible Consumer Legal Funding responded to the report by calling for regulation rather than restriction.

“Some of the conduct described in The New York Times article is exactly the type of conduct responsible regulation should prevent,” said Eric Schuller, President of the Alliance for Responsible Consumer Legal Funding. “New York has now put strong protections in place that directly address many of these concerns, while states such as Kansas have adopted similarly comprehensive regulatory frameworks. The answer is not to take Consumer Legal Funding away from injured consumers who need help paying their rent, mortgage, utilities or putting food on the table while their case moves through the legal system. The answer is to establish clear rules, enforce those rules and hold anyone who violates them accountable. Responsible regulation protects consumers while preserving access to Consumer Legal Funding for the people who truly need it.”

The Alliance for Responsible Consumer Legal Funding has published a commentary arguing that debates over litigation costs concentrate on indirect costs passed through the economy while overlooking the direct financial pressure on injured consumers waiting for their claims to resolve.

As reported by the National Law Review, the piece was written by Eric K. Schuller, president of ARC. It draws on U.S. Bureau of Labor Statistics data showing average household expenditures reached $78,535 in 2024, or roughly $6,545 a month, with housing averaging $2,189 per month, transportation $1,110 and food approximately $847. Extended across a claim’s lifespan, ordinary household expenditures average about $157,070 over 24 months and $235,605 over 36 months.

Schuller cites the Federal Reserve’s 2026 report on household economic well-being, which found that only 63% of adults said they could cover a $400 emergency expense entirely with cash or its equivalent. The commentary argues that if many households struggle to absorb a $400 shock, expecting an injured consumer to absorb months or years of reduced income while a claim moves through the system is unrealistic.

The article is careful to note that the figures do not suggest an injured consumer must replace every dollar of normal household spending. It describes Consumer Legal Funding as non-recourse and not used to pay attorneys, writing that the funds “can help consumers meet ordinary household obligations” and that “if there is no recovery, the consumer owes the funding company nothing.”

The following was contributed by Eric K. Schuller, President, The Alliance for Responsible Consumer Legal Funding (ARC).

America’s trucking industry deserves a fair civil justice system. So do injured consumers. Those principles are not in conflict.

In his recent Transport Topics commentary, “Truckers Deserve Lawsuit Transparency,” American Trucking Associations Chairman Greg Hodgen raises concerns about third-party litigation financing. He describes hedge funds, private equity firms and foreign sovereign wealth funds investing in lawsuits for profit.

Those concerns deserve discussion. But that discussion becomes problematic when Consumer Legal Funding is swept into the same category.

They are fundamentally different products.

Consumer Legal Funding is not Wall Street financing a lawsuit. It is not a hedge fund paying attorneys’ fees or litigation expenses. And it does not give a funding company control over litigation strategy or settlement decisions.

Consumer Legal Funding provides relatively small amounts of financial assistance directly to individuals who have pending legal claims and need help paying ordinary household expenses while those claims are resolved.

Simply put, it is funding lives, not litigation.

Consider the Independent Truck Driver

The trucking industry itself provides a good example of why Consumer Legal Funding exists.

Consider an independent truck driver who is seriously injured when another vehicle runs a red light and crashes into his truck.

The accident was not his fault, but suddenly he cannot work.

For an independent driver, that can mean his income stops immediately. Yet his mortgage or rent remains due. He still has to buy groceries, keep the electricity on, make vehicle payments and support his family.

His attorney may be pursuing a legitimate claim against the responsible party, but claims do not get resolved overnight. The defendant may have the resources to wait months for a settlement. The independent truck driver may not.

A Consumer Legal Funding company might provide him with $4,000 to help pay those household expenses while his claim is pending.

That money does not pay his lawyer. It does not pay an expert witness. It does not finance the lawsuit. And the funding company does not tell his attorney how to handle the case or whether to accept a settlement.

It helps the truck driver keep his family financially stable while he waits for the legal system to work.

And because Consumer Legal Funding is non-recourse, if he receives no recovery from his legal claim, he owes the funding company nothing.

That truck driver is not part of the litigation financing problem described in Hodgen’s article. He is a consumer who needs financial help because of an accident that was not his fault.

The Distinction Matters

Hodgen describes investors “pouring money into civil litigation” and argues that outside capital can fuel inflated claims and settlement demands. He also raises concerns that third-party financiers can discourage settlements when their financial interests depend on obtaining a larger recovery.

Those concerns do not accurately describe Consumer Legal Funding.

Consumer Legal Funding companies do not determine whether a lawsuit is filed. They do not select the consumer’s attorney. They do not direct litigation strategy. They do not determine the value of a claim or decide whether a settlement should be accepted.

Those decisions remain with the consumer and the consumer’s attorney.

There is also an enormous difference in scale. Consumer Legal Funding typically involves relatively modest amounts, often approximately $3,000 to $5,000, provided directly to an individual consumer. Commercial litigation financing can involve millions of dollars invested in individual lawsuits, law firms or portfolios of cases.

Policymakers should not treat those transactions as interchangeable simply because both have been placed under the broad umbrella of “litigation financing.”

Consumer Legal Funding Can Help Prevent Forced Settlements

There is another side to this debate that deserves greater attention.

Financial pressure can influence litigation decisions just as surely as outside investment can.

Imagine that independent truck driver again. His attorney believes the claim is worth substantially more than the insurance company is offering, but it may take another six months to reach a fair resolution.

The defendant can wait.

The truck driver facing next month’s mortgage payment may not be able to.

Without some financial breathing room, he could be forced to accept an early settlement, not because it fairly compensates him for his injuries, but because his family needs money immediately.

Consumer Legal Funding can help level that imbalance.

It does not guarantee a larger settlement. It simply gives the consumer something critically important: time to make a decision based on the merits of the claim rather than immediate financial desperation.

Non-Recourse Is Not Traditional Lending

Hodgen’s article also characterizes certain litigation financing arrangements as “predatory lending.”

But Consumer Legal Funding is fundamentally different from a traditional loan because repayment is contingent upon the consumer recovering proceeds from the underlying legal claim.

If there is no recovery, the consumer owes nothing.

The funding company therefore assumes the risk that it may receive less than the contracted amount or nothing at all.

That distinction matters and should be recognized when policymakers consider how these products should be treated.

Transparency Should Be Relevant to the Litigation

The article argues that litigation financing arrangements should be disclosed because defendants may otherwise be unaware that an outside party has a financial interest in a lawsuit.

That argument may be relevant when a commercial litigation financier possesses contractual rights that could influence litigation strategy or settlement.

Consumer Legal Funding presents a very different situation.

If the funding company cannot control the litigation, cannot select the attorney and cannot decide whether a consumer accepts a settlement, what legitimate purpose is served by automatically giving the defendant or its insurer access to the consumer’s private financial contract?

If a judge determines that a particular agreement is relevant to an issue in a case, normal discovery procedures can address it.

Automatic disclosure, however, could reveal something very different: how financially vulnerable the plaintiff is.

The defendant learning that an injured consumer needed funding to pay rent, utilities or groceries could gain information about how long that consumer can financially withstand litigation. That risks creating leverage for the very party with the resources to wait.

Truckers and Consumers Should Not Be Pitted Against Each Other

Hodgen makes an important point when he emphasizes that more than 90% of motor carriers operate 10 trucks or fewer.

Those businesses deserve protection from fraudulent lawsuits, staged accidents and abusive litigation practices.

But an independent truck driver injured through someone else’s negligence deserves protection too.

These goals can coexist.

Congress can address multimillion-dollar commercial investments in litigation without treating a $4,000 funding used to keep an injured family in its home as the same product.

It can demand transparency when outside investors exercise control or influence over litigation without automatically exposing an individual consumer’s personal financial circumstances to defendants and insurance companies.

Regulate the Product, Not the Label

The real problem is that “third-party litigation financing” has become an umbrella term covering very different products.

Policymakers should distinguish between commercial litigation financing, where institutional capital may finance litigation, law firms or portfolios of cases, and Consumer Legal Funding, where relatively small amounts are provided directly to individuals for personal and household expenses.

Hodgen concludes his article by calling for “transparency, accountability and fairness in our courts.”

We agree.

But fairness requires precision.

A hedge fund investing millions of dollars in litigation is not the same as an independent truck driver receiving $4,000 to make his mortgage payment and put food on the table after an accident that was not his fault.

One is funding litigation. The other is helping fund someone's life while the litigation runs its course.

America’s truckers deserve a fair civil justice system. So do America’s consumers.

Protecting one does not require harming the other.

Consumer Legal Funding is not the problem. For consumers facing financial hardship through no fault of their own, it can be the lifeline that allows them to keep their families financially stable while they wait for the justice system to work.

Author J.K. Rowling has offered to underwrite legal challenges brought by NHS patients and staff over single-sex facilities policy, in a privately funded intervention arriving days after new equality guidance took effect in the UK.

As reported by PinkNews, the offer followed an announcement by the Midlands Partnership University NHS Foundation Trust that trans women could continue to use women-only wards, changing rooms and toilets in line with their gender identity. Rowling directed anyone seeking support to her foundation, writing that “should any female patient or member of staff require funding to fight this assault on their legal rights, apply to jkrwf.org.”

The offer, made on 8 August, follows guidance from the Equality and Human Rights Commission that came into force on 5 August recommending that single-sex facilities be allocated according to sex recorded at birth. EHRC guidance is not itself binding law, and the resulting gap between the Commission’s recommendations and individual trusts’ operational policies is what any litigation would test.

For the funding sector, the arrangement sits outside the commercial model. Rowling’s foundation is not seeking a return, and the funding is philanthropic rather than an investment in claim proceeds. That distinction matters to the regulatory debate: disclosure regimes advancing in the UK and elsewhere are generally aimed at financiers holding an economic interest in the outcome, and campaign-driven backing raises questions those frameworks were not designed to address.

The case also illustrates how litigation funding has become a mechanism for pursuing contested policy questions. Where a claimant lacks the resources to challenge an institutional policy, outside capital determines whether the question reaches a court at all — a dynamic increasingly visible on both sides of politically charged disputes.

No claim has yet been filed.

A new commentary pushes back on the tendency to lump consumer legal funding together with commercial third-party litigation financing, arguing the two are fundamentally different products that warrant different policy treatment.

Writing in The National Law Review, Eric K. Schuller, president of the Alliance for Responsible Consumer Legal Funding (ARC), contends that consumer legal funding (CLF) is a modest, non-recourse product that helps injured individuals cover household costs — rent, groceries, utilities, childcare — while their claims proceed, rather than an investment in the litigation itself. Typical transactions run $3,000 to $5,000, carry no repayment obligation if the case fails, and give the funder no control over legal strategy.

Commercial litigation finance, by contrast, involves institutional investors deploying millions into business disputes. On that basis, Schuller argues CLF cannot be blamed for a so-called “tort tax,” since it neither causes accidents nor finances litigation expenses. “If Consumer Legal Funding disappeared tomorrow, accidents would still happen,” he writes.

He points to state high-court decisions — Maslowski v. Prospect Funding Partners in Minnesota and Ruth v. Cherokee Funding in Georgia — and to states including Kansas, New York, California, and Georgia that regulate CLF separately, alongside a U.S. Government Accountability Office report describing commercial funding as institutional and corporate in nature. ARC says it supports responsible CLF regulation — licensing, plain-language contracts, cancellation rights, and prohibitions on controlling litigation — while opposing measures that treat CLF as commercial litigation finance.

Consumers are increasingly willing to interact with artificial intelligence when contacting a law firm, but that comfort drops sharply once the conversation turns complex or personal, according to new survey data.

According to figures published by Bristol Law Society, the research was commissioned by customer conversation company Moneypenny and conducted by Censuswide among 2,000 UK consumers between June 8 and June 10, 2026. It examined how receptive people are to AI when dealing with different types of businesses, including legal providers.

Where law firms are concerned, willingness tracks closely with the simplicity of the task. Some 29% of respondents said they would be happy using AI for an initial enquiry and 28% for completing a questionnaire. That figure falls to 22% for receiving a case update and 17% for settling a bill. A substantial 38% said they would not be happy using AI for any legal-related communications at all.

The survey also found pronounced generational and gender divides. Among Baby Boomers, 51% rejected AI for any legal communications, as did 44% of Gen X, compared with 28% of Millennials and 26% of Gen Z. More women than men expressed reluctance, at 43% versus 33%.

Bernadette Bennett, Head of Legal at Moneypenny, said the results point away from a uniform approach. “The best customer experiences will be achieved by blending both tech and human communications seamlessly, with AI handling simple queries quickly and efficiently, but deferring consumers to a real person for sensitive issues,” she said.

In an Independence Day editorial, the Alliance for Responsible Consumer Legal Funding (ARC) argues that meaningful freedom includes the ability of injured Americans to pursue their legal claims without financial desperation forcing them into unfair settlements. The piece positions consumer legal funding as a practical tool for keeping the outcome of a case tied to its facts rather than to a plaintiff’s bank balance.

Writing in the National Law Review, ARC president Eric Schuller contends that “justice delayed can quickly become justice denied when mounting bills force individuals into decisions they otherwise would never make.” Defendants, he argues, understand this dynamic and can use the length of the civil justice process to pressure vulnerable plaintiffs into accepting less than their claims are worth.

Schuller distinguishes consumer legal funding from commercial litigation finance and traditional lending. These are typically small, non-recourse advances — often $3,000 to $5,000 — used for everyday necessities such as rent, groceries, and medical bills while a claim proceeds. Because the funding is non-recourse, a consumer who loses the underlying case owes nothing. ARC’s guiding principle, he writes, is “Funding Lives, Not Litigation.”

The editorial also makes the case for responsible oversight, endorsing disclosure requirements, attorney acknowledgment, and prohibitions on funders influencing litigation strategy — safeguards intended to protect consumers while preserving their access to the tool.

The family at the heart of the Netflix documentary “Take Care of Maya” is now locked in a dispute with its former attorneys over the proceeds of a litigation loan, in a case that puts the mechanics of litigation finance in an unusually public spotlight. Jack Kowalski and his daughter Maya, whose ordeal with a rare chronic illness and a Florida hospital drew national attention, are challenging the fees claimed by the lawyers who once represented them.

As reported by Bloomberg Law, the dispute centers on a $42 million litigation funding loan and nearly $10 million in attorneys’ fees now in contention. The family’s current counsel alleges that the prior firm, AndersonGlynn LLP of Jacksonville, “committed flagrant, serious, and repeated violations of their professional, ethical, and fiduciary duties” during the representation. The matter is being heard in Florida’s Twelfth Judicial Circuit.

The fight illustrates a recurring tension in funded litigation: when sizable awards meet layered financing arrangements and contingency fees, the division of proceeds can become its own battleground. Disputes over how loan repayments, interest, and legal fees are calculated against a recovery are increasingly common as litigation finance scales.

For an industry often criticized for operating out of public view, the high profile of the Kowalski case offers a rare, concrete look at how litigation loans intersect with attorney compensation — and what can go wrong when the relationship between client, counsel, and funder breaks down.

A decade after he secretly bankrolled Hulk Hogan’s lawsuit that bankrupted Gawker, billionaire Peter Thiel is again funding an effort aimed at the press — this time through a startup that lets the wealthy pay to put reporters on trial before an artificial-intelligence “jury.” The venture, called Objection, was founded by Aron D’Souza, the lawyer who orchestrated the Thiel-financed campaign against Gawker, and launched in April 2026 with seed money from Thiel, Balaji Srinivasan, and venture firms Social Impact Capital and Off Piste Capital.

As reported by The Hollywood Reporter, Objection works as a private arbitration service. For a starting fee of roughly $2,000, a client can challenge a published article. Human investigators — ranging from recent graduates to former CIA and FBI agents — gather evidence, which is then assessed claim-by-claim by multiple large language models acting as jurors. The system issues an “Honor Index” score grading a journalist’s accuracy and integrity, and clients can pay extra to amplify favorable findings on social media.

The company’s first target is a Hollywood Reporter investigation, brought by a Purdue Pharma heir disputing 2021 coverage of his image as an ethical investor. Media lawyers and First Amendment scholars warn the model could chill reporting that relies on confidential sources, with one attorney describing it as “a high-tech protection racket for the rich and powerful.” The case underscores how litigation — and the money behind it — has become a tool to shape, and sometimes silence, coverage of the powerful.

Today, The Milestone Foundation, the only nonprofit organization providing fair and transparent litigation funding to plaintiffs, announced the honorees of its 2026 Compassionate Counsel Program.  

Now in its fourth consecutive year, the Compassionate Counsel Program recognizes trial lawyers who go above and beyond in serving their clients, not only as skilled legal advocates, but as trusted guides through some of the most difficult periods of their clients’ lives. Honorees are nominated by peers, clients, and organizations, and selected by a review panel evaluating each nominee against the program’s core criteria: putting clients’ wellbeing first, demonstrating empathy alongside legal skill, and upholding the highest standards of integrity in the pursuit of justice. This criteria collectively reflects The Milestone Foundation’s mission and values.  

“Trial lawyers who practice with compassion are the backbone of our civil justice system,” said Rachel McCarthy, Executive Director of The Milestone Foundation. “The Compassionate Counsel Program exists to celebrate those attorneys and to inspire every member of the plaintiffs’ bar to approach their work with the same humanity and commitment. We are proud to honor this year’s remarkable group of honorees as we mark a decade of impact for the Foundation.” 

The honorees will be formally celebrated at the Foundation’s 10-Year Anniversary Celebration on Saturday, July 25th at Avli on the Park in Chicago, Illinois.  

The 2026 Compassionate Counsel honorees are: 

Daisy Ayllón | Romanucci & Blandin 

Kate Feroleto | Feroleto Law 

Rayna Kessler | Robins Kaplan 

John Reagan | Kisling Nestico & Redick 

Laura Yaeger | Yaeger Law  

About the 2026 Compassionate Counsel Honorees 

Daisy Ayllón | Romanucci & Blandin 

Daisy Ayllón is a Partner at Romanucci & Blandin, where she represents individuals and families in cases involving sexual abuse, medical malpractice, civil rights violations, and other catastrophic injuries.  Daisy chose plaintiffs’ work because she believes working-class people, immigrant families, survivors, and people facing powerful institutions deserve excellent legal representation when they have been harmed. 

She played a leading role in representing more than 200 women in the widely reported Ortega sexual abuse matters, which resulted in substantial resolutions for the survivors. Daisy also served as first chair in a $15 million verdict against a school district for failing to protect a male student from sexual abuse by a teacher. She has played a role in other significant cases, including a $40 million verdict for a child left paralyzed after a botched surgery and a $35 million settlement for a girl injured at birth. For Daisy, “compassionate counsel” means pairing fierce advocacy with the patience, empathy, and care required to earn a client’s trust and pursue justice with humanity. 

Kate Feroleto | Feroleto Law 

Kate Feroleto is a nationally recognized trial lawyer and leader in personal injury and trucking litigation. A passionate advocate for injured individuals and their families, she is known for combining compassionate client representation with relentless advocacy against insurance companies and corporate defendants. 

Kate serves as President of the Western Region Affiliate of the New York State Trial Lawyers Association and Dean of the NYSTLA Trial Lawyers Institute. She is a member of the Academy of Truck Accident Attorneys and has held national leadership roles dedicated to advancing the representation of victims of commercial trucking crashes. In addition to her litigation practice, Kate is a frequent lecturer, mentor, and educator on catastrophic injury litigation, traumatic brain injury cases, trial advocacy, and trucking accident law.  

Rayna Kessler | Robins Kaplan 

Rayna Kessler is a Partner at Robins Kaplan and Deputy Chair of the firm’s National Mass Tort Group. A nationally recognized leader in emerging mass tort litigation and advocacy for survivors of child sexual abuse, she has held court-appointed leadership roles in complex, high-profile matters including the Taxotere, Abilify, and Olmesartan multi-county litigations. She currently serves as MDL Liaison Counsel in the Exactech knee and hip replacement litigation in the Eastern District of New York. 

In October 2025, Rayna secured a $5 million jury verdict on behalf of a survivor of child sexual abuse against the Order of St. Benedict of New Jersey, which operates the prestigious Delbarton School in Morristown. The verdict is the first known in New Jersey against an entity of the Catholic Church for the sexual abuse of a minor, marking a significant milestone in institutional accountability litigation. 

John Reagan | Kisling Nestico & Redick 

John J. Reagan is a Partner at Kisling, Nestico & Redick (KNR), where he devotes his practice exclusively to personal injury, wrongful death, insurance coverage, bad faith, and class-action litigation. He brings a rare dual perspective to plaintiff-side work, having spent more than a decade as lead trial counsel defending national insurance companies, product manufacturers, and trucking companies — including being a shareholder for nearly ten years at one of Ohio’s largest regional defense firms. 

That background shifted when John took on a seriously injured motorcycle accident victim whose own insurer denied his claim. John secured a six-figure jury verdict well in excess of policy limits, then obtained an additional substantial settlement against the same carrier for bad faith claims handling. The experience reoriented his practice toward representing individuals, and he joined KNR in 2010. Since then, John has secured significant recoveries for clients in personal injury, wrongful death, and insurance bad faith matters.  

Laura Yaeger | Yaeger Law 

Founder of Yaeger Law and Yaeger Legal Consulting, Laura Veronica Yaeger is a lawyer, consultant, educator, and nationally recognized leader whose career has been defined by a commitment to helping others. For more than 25 years, Laura has represented individuals harmed by defective medical devices, dangerous pharmaceuticals, toxic substances, and other forms of negligence.  

A dedicated servant leader, Laura has devoted more than two decades of service to the American Association for Justice (AAJ). She currently serves as AAJ Parliamentarian and is a past Chair of the Women’s Trial Lawyers Caucus, co-founder and past Chair of the LGBT Caucus, former member of the Executive Committee, and longtime member of the Board of Governors. She is also a graduate of AAJ’s Leadership Academy and has served on numerous committees and leadership initiatives dedicated to strengthening the organization and expanding opportunities for others. Laura’s contributions to the legal profession have earned her numerous honors, including the AAJ Harry Philo Award in 2021 for outstanding contributions to the civil justice system and the Richard D. Hailey Distinguished Service Award in 2025 for her years of exceptional service and leadership. She also serves on the Board of Directors of the Florida Justice Association. 

About The Milestone Foundation 

The Milestone Foundation is a 501(c)(3) nonprofit organization providing an ethical funding solution to individuals pursuing justice after suffering a catastrophic incident. Through simple interest-only rates, attorney collaboration, and a mission-driven approach, the Foundation provides plaintiffs with fair access to the financial resources they need to pursue justice. For more information, visit https://themilestonefoundation.org/.    

As states such as Illinois move to restrict non-lawyer ownership of law firms, defenders of alternative business structures are pushing back, arguing that ABS models expand access to justice for consumers and small businesses that traditional firms have little economic incentive to serve. The debate goes to the heart of how technology and outside capital should reshape the delivery of legal services.

As reported by Bloomberg Law, Matt Freund, co-founder and chief executive of Arizona ABS-licensed firm ClaimsHero, contends that conventional firms lack the incentive to handle consumer protection and wage-theft claims where clients cannot afford hourly billing. ABS firms, he argues, combine legal expertise with technology to operate on contingency at scale, serving more than 100,000 clients at no cost to consumers through automated onboarding, eligibility screening, and client communication.

Freund counters concerns that non-lawyer ownership weakens oversight, asserting that ABS firms face stricter regulation than traditional practices. Entity-level licensing, he notes, creates firm-wide accountability, with semi-annual audits, biennial renewals, compliance-attorney requirements, and the risk of firm-wide suspension for ethics violations. He cites a 2025 Stanford Law School study finding that 85% of Arizona ABS firms target individual consumers and that there was “de minimis evidence of consumer harm.”

To address skeptics, Freund recommends entity-level regulation, feedback mechanisms, ownership transparency, and governance safeguards for attorney independence as a template for other states. The argument offers a direct counterpoint to the restrictive measures gaining traction in statehouses across the country.

Kansas has adopted a comprehensive framework for regulating consumer legal funding, with Governor Laura Kelly signing the Transparency in Consumer Legal Funding Act, House Bill 2518, into law. Commentators have positioned the statute, which takes effect July 1, 2026, as a model for other states weighing how to oversee the fast-growing consumer funding sector.

As reported by the National Law Review, the measure passed unanimously in both chambers of the Republican-controlled legislature before earning the Democratic governor’s signature, a rare show of bipartisan consensus on an issue that has drawn sharp debate elsewhere. The law defines consumer legal funding as a non-recourse transaction in which a company purchases a contingent interest in the proceeds of a legal claim, and it expressly states that such funding is not a loan and is not subject to lending laws.

The statute builds in extensive consumer protections, including a 10-business-day rescission period without penalty, plain-language contract requirements, full disclosure of all charges and the maximum repayment amount, and mandatory attorney acknowledgment. It also bars referral fees and kickbacks, prohibits misleading advertising, and restricts funding companies from influencing litigation decisions.

On transparency, the law requires disclosure of funding agreements upon request by parties and insurers while shielding attorney-funder communications from discovery. Supporters describe that balance as the statute’s central achievement: protecting consumers through disclosure and accountability while preserving access to funding and safeguarding attorney independence, a template lawmakers in other states may look to replicate.

The following piece was contributed by Eric Schurke, CEO, North America at Moneypenny.

In litigation finance, firms often believe they win or lose opportunities based on the quality of their analysis, the strength of their capital position, or the sophistication of their investment strategy.  But, in reality, that decision is often made much earlier.

It happens during the very first interaction; the first inquiry, the first call, the first exchange of information between a claimant, law firm, or referrer and the funding team. Long before a case is reviewed in detail or due diligence begins, impressions are already forming around responsiveness, professionalism, clarity and trust.

And yet, across much of the industry, first contact is still treated primarily as an administrative process rather than a strategic one.

First contact shapes confidence

Litigation finance is fundamentally relationship driven. While analytics, modelling and case assessment are all critical, trust remains central to every funding decision and every long-term partnership.

Over the years, I’ve seen that first contact is rarely neutral. A prompt, thoughtful response signals professionalism, organization, and confidence, while slow follow-up or fragmented communication can quietly introduce doubt even when the underlying opportunity is strong.

Potential claimants and law firms may not always articulate those impressions directly, but they absolutely act on them.

At Moneypenny, we often see this when new legal and professional services clients come to us after experiencing missed calls, delayed responses, or inconsistent handling of inbound inquiries that have already cost them opportunities. In many cases, the issue is not capability. The organization may be highly experienced and commercially strong, but the experience at first contact simply failed to reflect that at the moment it mattered most.

That is why first contact should not be viewed as operational admin alone. It is the beginning of the relationship, and increasingly, a competitive differentiator.

The hidden cost of inconsistent intake

One of the biggest operational challenges within litigation finance is inconsistency in how inbound opportunities are handled.

Inquiries arrive through multiple channels; law firm referrals, direct claimant inquiries, email introductions, website forms, conferences, and professional networks. Information is often captured differently depending on who receives it, while ownership and follow-up responsibilities can quickly become unclear.

From the outside, that creates a fragmented experience. Internally, it slows evaluation, introduces inefficiencies, and increases the likelihood of missed opportunities or incomplete information at the earliest stages of review.

The most effective organizations bring structure and clarity to this process. They define what information needs to be captured at first contact, how it should be recorded, and how opportunities move efficiently through the pipeline.

But importantly, they do this without losing the human element.

Structure creates consistency. People create trust. And in litigation finance, both matter.

Responsiveness matters but so does judgment

There is understandably a strong focus across the sector on speed. Opportunities move quickly, competition for high-quality matters is increasing, and firms want to accelerate triage and evaluation wherever possible.

But speed on its own is not enough. A rushed or overly transactional interaction can be just as damaging as a slow one, particularly when claimants or law firms are dealing with complex, high-stakes, or emotionally charged situations.

Equally, over-automation creates its own risks. Generic responses, unclear escalation pathways, or communication that feels impersonal can weaken trust very early in the relationship.

What matters is balance. 

In litigation finance, the value of first contact extends far beyond simply answering an inquiry. Early interactions often determine how efficiently opportunities are qualified, routed, and progressed, while also protecting valuable time for investment and legal teams by filtering out incomplete or non-viable matters early in the process.

At Moneypenny, we regularly see how structured intake and well-managed communication can improve responsiveness, reduce operational friction, and create stronger early-stage relationships with claimants, referrers, and law firms. Small improvements at this stage can have a significant downstream impact on both pipeline quality and overall efficiency.

In practice, that may mean using technology to improve responsiveness, consistency, and information capture, while ensuring experienced people remain central to judgment, relationship-building, and decision-making.

When that balance is right, the experience feels seamless rather than procedural.

Leadership shows up in the operational details

It is easy to think of leadership primarily in terms of investment strategy, growth targets, or market positioning. But in practice, leadership often reveals itself much earlier and in far smaller moments.

It shows up in what organizations prioritize, what they intentionally design, and what they refuse to dismiss as “just operational.” First contact is one of those moments.

When firms invest in structured intake, responsive communication, and the people responsible for handling those early interactions, the impact is tangible, not only in efficiency, but in stronger relationships, improved deal flow, and greater long-term trust.

The organizations that consistently stand out in litigation finance are not simply better at evaluating opportunities. They are better at demonstrating professionalism, clarity, and confidence from the very first interaction.

Because by the time formal case review begins, the first decision has often already been made.

Latin America–focused litigation funder Loopa Finance has announced that it will fund a civil action filed by nearly 300 apartment owners at the Villa Panamericana housing complex in Cerrillos, Santiago, against the developers and contractors behind the project. The claim, brought before Santiago’s 10th Civil Court, exceeds $18 million in aggregate damages.

According to a Loopa Finance announcement, the suit is led by Nicolás Vassallo, partner at Chilean firm Abogabir Miranda, and targets Inmobiliaria Parque Cerrillos SpA, Empresa Constructora DLP S.A., Ameris Capital S.A., and related investment entities. Plaintiffs are seeking roughly $11 million in direct damages and temporary housing costs, nearly $7 million in moral damages, and additional compensation equal to 10% of each unit’s purchase price to capture lost property value.

Villa Panamericana’s Lot B comprises 17 buildings and 1,355 apartments originally built to house athletes at the 2023 Pan American and Parapan American Games, before being allocated to lower-income families through government housing subsidies and the Teletón program. Residents have reported water leaks, structural cracks, and serious electrical, plumbing, gas, and elevator failures, with preliminary expert reports citing violations of Chile’s General Urban Planning and Construction Law.

“Access to justice should not depend on the affected families’ financial resources,” said Federico Muradas, Loopa’s head of legal. Loopa’s funding will cover legal and technical costs of the proceedings on a non-recourse basis, in what stands as one of the larger consumer-tied construction defect actions yet financed in Latin America.

The Court of Appeal of England and Wales today refused BHP’s application for permission to appeal the High Court’s landmark liability judgment in the Mariana disaster litigation.

The High Court found BHP responsible for the 2015 collapse of the Fundão tailings dam in Mariana, Minas Gerais, Brazil, concluding that BHP is liable for the disaster under both the Brazilian Civil and Environmental law.

The Court of Appeal heard BHP’s application for permission to appeal the decision on 12 March after BHP was refused permission to appeal by the High Court in January.  BHP asked the court for permission to contest the findings that it was a polluter, and that it had knowledge of the risks associated with the dam before the collapse. The mining company also challenged the finding that all claimants brought their claims in time.

The Court of Appeal’s refusal marks a further victory for the hundreds of thousands of Brazilian victims who have spent over ten years pursuing justice, and a major setback for BHP. The High Court’s liability judgment remains in force, and BHP has exhausted the ordinary routes by which it could seek to overturn it.

In today’s ruling, the court concluded that BHP’s proposed grounds of appeal have no real prospect of success and there is no other compelling reason for the appeal to be heard.  The decision means that the parties will proceed to the trial of Stage 2 of the proceedings, which will determine issues of causation, loss and damages. The trial evidence is to be heard from April 2027 to December 2027, with closing submissions listed for March 2028.

Lord Justice Fraser wrote in the decision: “I do not accept that any of the grounds relating to BHP’s liability for the dam collapse are reasonably arguable. I do not consider that there is any foundation for the different complaints that the trial judge failed to engage with BHP’s case.”

Jonathan Wheeler, lead partner for the Mariana litigation at Pogust Goodhead, said: “The Court of Appeal has now joined the High Court in finding that BHP’s grounds of appeal have no real prospect of success – an emphatic and unambiguous outcome. BHP remains liable for the worst environmental disaster in Brazil’s history, and it will not be given another bite at the cherry.”

“Our clients have waited more than a decade for justice while BHP pursued every procedural avenue to avoid accountability; those avenues are now closed. We are focused on securing the compensation that hundreds of thousands of Brazilians have been owed for far too long.”

Legal Asset Servicing (LAS) has appointed Gian Kull as Chief Executive Officer to lead the institutional scale-up of its operational platform for litigation finance. The London-based platform currently supports more than €7 billion in claim value across litigation funders, law firms, and insurers backed by leading institutional investors.

According to the National Law Review, Kull joins LAS from Omni Bridgeway, where he served as Regional Portfolio Manager and led the UK office to become the funder’s largest globally by investment volume. He previously served as Chief Investment Officer at Augusta Ventures, where he managed one of the UK’s leading litigation finance portfolios.

LAS positions itself as the financial infrastructure layer for legal assets, providing funders, law firms, insurers, and capital providers with a single platform to monitor, manage, and report on legal asset portfolios. “Billion-dollar portfolios are still being managed on spreadsheets and fragmented tools,” Kull said in the announcement. “LAS exists to fix that. We’ve built the operational layer that litigation finance needs to function at institutional scale.”

The platform also targets one of the structural barriers to a secondary market in litigation finance: due diligence friction. Because LAS holds structured, multi-party data tied to each case, it functions as an instant data room for secondary transactions — reducing diligence timelines from weeks to hours and supporting cleaner information transfer when portfolio assets change hands. Kull’s appointment marks the start of an accelerated commercial phase for LAS as the asset class continues to mature.

Jonathan Sablone, a commercial disputes attorney with three decades of cross-border, financial services, and litigation finance experience, has launched Sablone Advisory LLC — a Boston-based boutique positioned to serve claimants, funders, and insurers across the legal finance ecosystem under the tagline “at the intersection of law and finance™.”

According to Sablone Advisory LLC, the new firm offers underwriting, diligence, monitoring, and asset management services to litigation funders and to insurers offering contingent risk products. On the claimant side, Sablone Advisory works with plaintiffs and their counsel to position cases for funding, including packaging case portfolios for cross-collateralized funding and insurance wrappers — services that have become increasingly central as funders and insurers structure deals across multiple matters and risk layers.

“I founded Sablone Advisory to assist clients with the most intractable problems and issues facing the legal finance industry,” said Sablone in announcing the launch. “‘At the intersection of law and finance’ is not just a slogan, but a practical, commercial approach to legal problem-solving that I have practiced for decades.”

The launch reflects a continuing trend in the litigation finance industry: senior practitioners with capital-markets and complex-litigation backgrounds spinning out of large institutional platforms to offer specialized, independent advisory and underwriting services. As funders increasingly structure portfolio-level deals, layer ATE and contingent risk insurance into capital stacks, and pursue cross-border recoveries, demand for senior independent diligence and asset management — particularly from professionals fluent in both legal strategy and structured finance — has grown.

For claimants and their counsel, the firm’s case-positioning services are likely to resonate in a market where funders are increasingly selective about case quality, structure, and counsel pedigree. For funders and insurers, an independent boutique offering monitoring and asset management — separate from origination — represents the kind of service-provider infrastructure that more mature alternative-asset markets typically develop as they scale.

Inquiries can be directed to Jonathan Sablone at jsablone@sabloneadvisory.com or via www.sabloneadvisory.com.

The following article was contributed by Kevin Prior, Chief Commercial Officer of Seven Stars Legal Funding.

When the Financial Conduct Authority pushed back its redress consultation deadline to 12 December 2025, its reasoning sounded awfully familiar: the regulator needed more time to ‘get it right’.

What eventually landed in the FCA’s final redress scheme rules in Policy Statement 26/3 on 30 March 2026 was, depending on where you sit, the good, the bad, and the ugly all at once.

• Good, in that an estimated £7.5 billion will move from lenders to consumers, and the regulator will clean up a historically disorderly market in the process.
• Bad, in that the final rules are more complicated, conditional, and fairly transparently the product of a protracted negotiation between the FCA and lenders.
• And ugly, in that the scheme ultimately falls materially short of the full remedy the FCA promised many mis-sold consumers—a point the regulator itself has effectively conceded.

For law firms, claims management companies, and funders, this is a more interesting combination than it may appear at first glance.

The rules introduced:

• two schemes, not one—albeit there was some logic behind the regulator’s reasoning on this point; 
• tightened eligibility;
• a cap on compensation in roughly a third of claims;
• an APR adjustment that the FCA itself described as a ‘bounded regulatory judgement’; and 
• rebuttable presumptions on certain agreements.

All of this prompts a question worth asking: what do the FCA’s delays, and the scheme that eventually emerged from them, actually mean for law firms, claims management companies, the funders behind them, and, most importantly, the consumers who are waiting to get their money back?

The drumbeat that never stopped

Between the FCA commencing its investigation into historical car finance mis-selling tied to the use of discretionary commission arrangements on 11 January 2024 and the recent publication of the final rules, motor finance mis-selling has become the biggest consumer finance news in the UK. The Court of Appeal and Supreme Court rulings in the Johnson, Wrench and Hopcraft test cases gave the scandal legal weight. The regulator’s October 2025 proposals provided the redress framework. Every court ruling, extension of the complaint-handling pause, public comments by the FCA, or advice from consumer advocates ensured that motor finance mis-selling was never far from the headlines.

None of this was free publicity for the FCA’s preferred outcome of a tidy, do-it-yourself scheme. In addition to coverage of these events themselves, each development generated further news by prompting additional rounds of lender provisioning and speculation about the industry’s total liabilities.

The FCA estimates that:

• 79% of motor finance customers know their lenders may owe them compensation;
• 61% are aware of the redress scheme; and
• 75% of eligible people will participate in the scheme and receive redress.

The awareness percentages, in particular, still seem lower than you might expect, given the scandal’s extensive coverage. But these numbers did not come from nowhere. They came from over two years of accumulated noise.

And behind the noise—the removal of 800 misleading adverts by FCA-regulated claims management firms, the new joint taskforce to deal with law firms and CMCs failing to adhere to good practice, the regulator’s continued insistence that consumers do not need professional representation—sits the reality the regulator will not admit. 

Professional representation remains in demand and for very good reasons. If it did not, the FCA would not be spending considerable resources on campaigns dedicated to dissuading customers from using it.

Complexity favours expertise

The FCA’s scheme does not inspire confidence that the average consumer will be able to work it out on their own.

Policy Statement 26/3 divides affected agreements into two schemes based on whether the loan began before or after 1 April 2014. Within both schemes, eligibility for redress depends on whether there was a DCA, commission above certain thresholds, or an undisclosed contractual tie. Lenders will calculate consumers’ redress using either a hybrid remedy, which is the average of commission paid and an APR-based estimated loss, or full commission repayment for the estimated 90,000 cases closely aligned with Johnson. Compensatory interest, the Bank of England base rate plus one percentage point, with a 3% annual floor, applies. There are certain inclusions, exclusions, and permissible rebuttals. There are even rules for deceased customers.

The bottom line is that a consumer who took out an agreement 10 years ago and receives a redress offer full of legalese and jargon from their lender probably won’t be able to work out what any of it means over breakfast.

Of course, some people will be able to work it out, or at least receive an offer they deem acceptable, take the money, and get on with their lives. These are exactly the people the FCA has in mind, and the regulator itself even admits that the scheme is more about giving as many eligible people as possible something back rather than fully remedying what has happened.

That is an honest admission, and an uncomfortable one. Getting something back is not the same as getting back what you were owed.

It is right that the FCA has made the scheme as accessible as possible. The problem is that the scheme covers 12.1 million agreements, and our data estimates that most mis-sold consumers will have had at least 2 or 3 motor finance agreements during the relevant period. Expecting millions of people to assess whether their lender has correctly assessed their eligibility or calculated their redress offer is not a realistic view of how consumers engage with financial services. It also paints a picture of an out-of-touch regulator—one that has, separately, decided to let lenders assess the scale of their own wrongdoing. And one whose scheme is now itself the subject of a confirmed legal challenge, which is hardly a vote of confidence in the regulator’s promise of an orderly, do-it-yourself route to compensation. Especially as the challenge is that the FCA’s final rules come down too heavily in favour of lenders. The regulator’s response? To call the challenge ‘disappointing,’ focus on the delay it may cause, and call on those bringing it to explain themselves to their clients. Consumer Voice, which is bringing the challenge with Courmacs Legal, says that the scheme need not be delayed at all, as only specific elements are in dispute.

The FCA wants to kill the category, but it will actually weed out the bad actors

The FCA’s joint taskforce with the Solicitors Regulation Authority, the Information Commissioner’s Office and the Advertising Standards Authority is, on the face of it, a warning shot to professional representatives. Exit fees are under scrutiny. Seven law firms have been closed down by the SRA, with some facing multiple ongoing investigations into their practices, and others have agreed to stop signing up new clients until they can demonstrate compliance with FCA rules. 

This, however, is not going to kill the category. Nor will it discourage consumers who have experienced harm. Many are simply not prepared to take lenders’ word that they’re doing right by them this time. Nor do they want to listen to or unquestioningly trust a regulator that allowed this misconduct to happen on its watch in the first place. Instead, it will ensure that what remains is a disciplined, well-run consumer claims market. The firms that can prove to the various regulatory bodies that they are operating fairly and correctly will be left standing and continue to demonstrate and deliver genuine value over and above the outcome of simply waiting for your lender to tell you what they think is a fair redress offer.

For funders, this is a welcome tidying of the sector. The surviving market will be smaller. It will also be more investable.

Where does this all leave law firms and funders?

Delays have given well-run firms time, something they rarely get. Time to refine their onboarding procedures. Time to build a case-vetting methodology worth the name. Time to prepare for a scheme whose final shape only recently became clear. Time to prime their clients for what’s coming. And time to watch the FCA’s own messaging evolve from confident proclamations that consumers do not need representation to an awareness campaign that implicitly concedes that it knows many will seek it anyway.

The scheme that has emerged is more complex and favourable to lenders than the one initially floated. The public awareness that has built up in the meantime has outgrown the neat category of ‘people who will just claim directly’. And the FCA and SRA’s regulatory housekeeping is doing what it should have been doing all along—removing the bad actors responsible for an entire sector being tarred with the same brush, raising the floor for good practice and operational standards, and giving the industry the credibility it needs to grow.

The FCA wanted to take the time to get things right. But it got some things right, some things wrong, and left others visibly short of the mark.

And in delivering its final motor finance redress scheme rules, it has arguably made the case for professional representation more clearly than any law firm could have.

Kansas has become the latest state to adopt a regulatory framework for consumer legal funding, with Governor Laura Kelly signing the Transparency in Consumer Legal Funding Act into law. The measure passed with unanimous bipartisan support in both chambers of the Kansas legislature and establishes baseline standards for how consumer legal funding companies operate in the state.

According to EIN Presswire, the new law affirms that consumer legal funding is not a loan and codifies several consumer protections. Those include a 10-day cancellation window allowing consumers to rescind agreements without penalty, a non-recourse structure ensuring consumers owe nothing if their case is unsuccessful, and a requirement that contracts be written in plain language. Funding companies must also provide full financial disclosure of funded amounts, fees, and maximum repayment schedules.

The statute additionally prohibits funders from influencing settlement decisions or the direction of litigation, preserving attorney independence and client control over case strategy. A referral fee ban eliminates kickbacks to attorneys or medical providers, addressing a long-standing concern among industry critics.

Eric Schuller, President of the Alliance for Responsible Consumer Legal Funding, called the legislation “a thoughtful, balanced framework that ensures consumers fully understand their agreements while preserving access to critical financial support during litigation.” The Kansas law adds to a growing patchwork of state-level consumer legal funding regulations and reflects continued momentum toward standardized disclosure requirements across the industry.

The following article was contributed by Celso Filho, Global Head of Special Projects at Market Securities, and co-founder and CEO of Rachel AI.

Life insurers and other institutional investors face a structural allocation challenge: securing sufficient volumes of rated, long-duration, yield-bearing assets to match long-tail liabilities. Public investment-grade bond markets remain large, but they do not consistently provide the spread, structure, or customization required. As a result, insurers have steadily increased allocations to private placements, asset-backed securities, and other forms of private credit.

According to Milliman’s 2026 analysis of NAIC statutory filings, private bonds now account for approximately 46% of U.S. life insurers’ bond portfolios — up from 29% a decade ago — reflecting a sustained and accelerating shift toward alternative sources of yield and duration. The trend is sharpest among PE-owned life insurers, where structured securities account for approximately 49% of total bonds — underscoring how deeply the search for rated, yield-bearing paper has become embedded in the asset allocation strategies of the most capital-active players in the sector.

Market Securities is addressing that demand by bringing to market asset-backed securities backed by legal finance receivables, including pre-settlement plaintiff advances and receivables linked to contingent fee arrangements with law firms. These assets introduce a distinct return profile driven by legal case cash flows rather than traditional corporate credit cycles, and they can be structured into rated securitizations suitable for institutional portfolios.

The opportunity is crystallizing across three investor tiers — each approaching the asset class from a different angle, but converging on the same structure and, together, driving the institutionalization of legal finance.

1. Insurers and other rated-mandate investors represent the largest pool of demand. Operating within strict capital and rating constraints, they allocate to investment-grade instruments at 125 to 200 basis points over Treasuries and can deploy hundreds of millions per transaction. Their participation defines the scale of the opportunity — and creates the demand for rated, structured exposure that legal finance ABS is uniquely positioned to meet.
2. Private credit managers, sovereign wealth funds, and large family offices occupy the senior and mezzanine tranches, targeting enhanced yield with structural protections. Unlike insurers, these investors are not dependent on ratings and underwrite assets directly, focusing on risk-adjusted returns, structure, and downside protection. They provide the capital depth required to scale transactions and anchor issuance.
3. Specialist legal finance investors sit in the junior and equity tranches, underwriting legal risk directly and targeting returns in excess of 25%. These investors take first-loss positions, pricing legal risk at the asset level — and for them, securitization offers a compelling strategic advantage: lower cost of capital and greater leverage availability than traditional fund formation, particularly relevant in today’s challenging fundraising environment.

These tiers are complementary rather than competitive. Rated investors bring scale and duration demand; private credit and sovereign capital provide flexible, non-rating-constrained liquidity; and specialist managers contribute underwriting expertise and first-loss alignment. Securitization is the architecture that aligns them — converting legal finance receivables into a format that institutional capital can size, rate, and deploy against.

Market Securities sees this convergence as structural rather than cyclical, and legal finance ABS as the mechanism through which it becomes permanent.

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Celso Filho, CFA, CAIA is Global Head of Special Projects at Market Securities, based in the Dubai International Financial Centre (DIFC). He is also co-founder and CEO of Rachel AI, a London-incorporated litigation finance technology and analytics platform. Celso began his career as a lawyer, practising for seven years before transitioning into investment banking and specialty finance, with prior roles at Citigroup and Credit Suisse. He holds an MBA from INSEAD.