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Key Takeaways from IMN’s 5th Annual Financing, Structuring and Investing in Litigation Finance

June 8, 2023

Key Takeaways from IMN’s 5th Annual Financing, Structuring and Investing in Litigation Finance

On Wednesday, June 7th, IMN hosted its 5th annual Financing, Structuring and Investing in Litigation Finance conference. LFJ attended the event and covered various panel discussions on topics ranging from key trends and developments, ESG initiatives and insurance products. Below are some key takeaways from the event. The first panel of the day focused on broader trends and developments impacting the Litigation Finance industry. The panel consisted of Douglas Gruener, Partner at Levenfeld Pearlstein, Reid Zeising, CEO and Founder of Gain (formerly Cherokee Funding & Gain Servicing), William Weisman, Director of Commercial Litigation at Parabellum Capital, Charles Schmerler, Senior Managing Director and Head of Litigation Finance at Pretium Partners, and David Gallagher, Co-Head of Litigation Investing at the D.E. Shaw Group. The panel was moderated by Andrew Langhoff, Founder and Principal of Red Bridges Advisors. One of the most interesting back-and-forths came on the issue of secondaries, as Doug Gruener noted that ‘There were a large number of investments made five to seven years ago, so the opportunity is ripe both on the demand side and supply side.” Andrew Langhoff, the moderator, responded that there are major hurdles involved in facilitating a secondaries market, such as questions around pricing, execution and management of the claims, to which other panelists agreed. However, Charles Schmerler pointed out that this industry is like any other capital markets industry, and to the extend that a secondaries market can provide liquidity and be a useful resource, he would be surprised if five years from now we’re not all reminiscing about how we once questioned the efficacy of a secondaries market in Litigation Finance. Perhaps the most timely panel of the day was on insurance, and its impact on the Litigation Finance market. The panel consisted of Brandon Deme, Co-Founder and Director at Factor Risk Management, Sarah Lieber, Managing Director and Co-Head of the Litigation Finance Group at Stifel, Megan Easley, Vice President of Contingent Risk Solutions at CAC Specialty, and Jason Bertoldi, Head of Contingent Risk Solutions at Willis Tower Watson. The panel was moderated by Stephen Davidson, Managing Director and Head of Litigation and Contingent Risk at Aon. Brandon Deme pointed to the rapid growth of the industry: “The insurance market is expanding. We’ve got insurers that can go up to $25MM in one single investment. When you put that together with the six to seven insurers who are active in the space, you can insure over $100MM. And that wasn’t possible just a few years ago.” One interesting point of discussion was on how to engender more cooperation between insurers and litigation funders, given that the two parties are at odds on issues relating to disclosure and regulatory requirements. Jason Bertoldi of Willis Tower Watson noted that almost every carrier who offers this product will have some sort of interaction with funders, either directly or indirectly. And while there is opposition to litigation funding from insurers around frivolous litigation and ethical concerns, there are similarly concerns amongst insurers around adverse selection and information asymmetry. So the insurance industry has to get more comfortable with litigation finance, and vice versa. The panel on ESG consisted of Viren Mascarenhas, Partner at Milbank, Nikos Asimakopoulos, Director of Disputes at Alaco, and Rebecca Berrebi, Founder and CEO of Avenue 33, LLC. The panel was moderated by Collin Cox, Partner at Gibson Dunn. This discussion touched on the opportunities afforded to funders by ESG efforts, as well as the challenges this emerging sector presents, such as diligence problems and confusion around how multinational ESG initiatives might impact state and local laws. Examples were provided around whistleblower claims, international arbitration efforts, supply chain issues in foreign jurisdictions. Other panels included discussions on the economics of the Litigation Finance market, strategies for mass torts investments, regulatory issues, and a small group meeting on women in Litigation Finance. Overall, IMN’s 5th annual Litigation Finance event highlights the growth and maturation of a nascent industry, and the range of interested parties in attendance (from funders to law firms to insurance providers to asset allocators) underscores the sector’s long-term sustainability.

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Westfleet Insider 2025: Commercial Litigation Finance Rebounds as Capital Constraints Persist

By John Freund |

The U.S. commercial litigation finance market posted a notable recovery in 2025, with new capital commitments climbing approximately 23% year-over-year to $2.8 billion across 346 new deals, according to the seventh annual Westfleet Insider report.

As reported by Westfleet Advisors, the rebound follows two consecutive years of contraction — commitments had slipped from $2.7 billion in 2023 to $2.3 billion in 2024 — and signals renewed deployment activity after a period of broad market retrenchment.

Despite the headline recovery, the data paints a nuanced picture. The uptick was driven by incremental deployment among a small cohort of established funders rather than any broad-based expansion of available capital. Of the 39 funders identified as active in the U.S. commercial market, a notable subset deployed little to no new capital during the reporting period, and only one new entrant emerged. Several funders are actively winding down operations, pointing to a quiet but ongoing consolidation across the industry.

Deal economics remained largely stable. The average transaction size held steady at approximately $8.1 million overall, though the composition shifted meaningfully: single-matter deals contracted to $4.5 million from $6.6 million the prior year, while portfolio transactions expanded to $19.6 million from $16.5 million. Portfolio structures continued to dominate, representing 64% of new commitments.

One of the more significant structural shifts in 2025 was the decline in Big Law utilization, with the share of total commitments directed to the 200 largest U.S. firms dropping to 24% from 37% in 2024. Client-directed deals edged ahead of firm-directed arrangements for the first time in recent years, representing 52% of commitments.

Other notable findings include patent litigation accounting for 27% of funded matters, contingent risk insurance coverage ticking up to 21% of deals, and claim monetization declining to 17% of new commitments from 26% in 2024.

Commercial

Gen Re Calls for EU-Wide Third-Party Litigation Funding Regulation

By John Freund |

The reinsurance industry is adding its voice to growing calls for a unified regulatory framework for third-party litigation funding across Europe.

As reported by Gen Re, the European litigation funding market now includes more than 300 funders operating with limited transparency and fragmented oversight across EU member states. The publication highlights a significant regulatory gap, with most countries allowing TPLF under general contract law while lacking specific rules around disclosure, conflicts of interest, or funder control over litigation strategy.

The Netherlands and Germany lead Europe as the most developed markets, while Ireland still prohibits outside litigation funding under common law. France, Spain, and Portugal have introduced or are considering consumer-focused legislation, but no harmonized EU-wide framework exists.

Insurance Europe and the Reinsurance Advisory Board have both called for regulation at the EU level, arguing it is necessary to maintain trust in the justice and financial systems. Their primary concerns include a lack of transparency about funding arrangements, potential conflicts of interest, rising litigation costs, and insufficient investor oversight.

Proponents of the industry counter that professional funders improve access to justice for under-resourced claimants and help filter out weak claims through rigorous due diligence. A cross-sector group of business associations issued a joint statement in January 2026 renewing their call for proportionate, harmonized EU-level rules.

Commercial

The Next Battleground in Consumer Legal Funding: Discovery and Transparency

By John Freund |

A growing legal debate is taking shape over whether consumer legal funding agreements should be subject to discovery during litigation, with significant implications for plaintiffs and the funding industry alike.

As reported by the National Law Review, Eric Schuller of the Alliance for Responsible Consumer Legal Funding argues that mandatory disclosure requirements create strategic advantages for defendants by exposing plaintiffs' financial vulnerabilities and sensitive underwriting information.

Defendants and insurers have increasingly pushed for access to funding agreements, framing their requests as transparency measures. Proponents say disclosure could reveal whether funders are influencing litigation strategy and promote accountability in the civil justice system.

Critics counter that forcing plaintiffs to produce funding contracts may discourage injured individuals from seeking legitimate financial assistance during lengthy cases. Consumer legal funding arrangements are non-recourse, meaning plaintiffs repay only if their case results in a successful settlement or verdict.

Several states have proposed or enacted laws requiring varying degrees of disclosure — from simple notification that funding exists to full production of contract terms. The debate reflects broader tensions between transparency and consumer protection that continue to shape litigation funding regulation across the country.