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Key Takeaways from LFJs Digital Event: Litigation Finance: What to Expect in 2024

February 12, 2024

Key Takeaways from LFJs Digital Event: Litigation Finance: What to Expect in 2024

On February 8th, 2024, Litigation Finance Journal hosted a special digital event titled ‘Litigation Finance: What to Expect in 2024.’  The event featured Gian Kull, Senior Portfolio Manager at Omni Bridgeway, David Gallagher, Co-Founder of LitFund, Justin Brass, Co-CEO and Managing Director of JBSL, and Michael German, Co-Founder and CIO at Lex Ferenda. The event was moderated by Peter Petyt, founder of 4 Rivers. The discussion covered a range of topics pertinent to the litigation funding space. Below are some key takeaways from the event: Which areas are you particularly interested in investing in over this coming year?  MG: There is a supposition that this industry will continue to grow in 2024. All of the indicators suggest that the industry will continue to grow–nearly all of the funders are funding bankruptcy-related cases, and three quarters are funding patent cases. Those are areas of interest to us, and I think that will continue to make sense, given the types of commercial cases they are – complex cases that require significant amounts of attorney time and defendant time,  and yield significant costs to the litigaiton. JB: We’re going to see a continued expansion into the mass arbitration space. That is something that has been coming up with more frequency. Mass torts has been staying quite busy. And where we see a lot of potential is with the evolution of the secondary market. There are a lot of funders coming up with maturing cases, and it makes sense for those funders to redeploy that capital into other opportunities – not necessarily exit that case – but just sell a minority stake or a portion of it. We that in traditional fixed income classes, so we think that is going to continue in the funding market as well. Are you seeing any kind of appetite to invest in jurisdictions you haven’t previously invest in? Have some jurisdictions matured to the point where you now will give them a serious look?  GK: That’s a hard question to ask Omni Bridgeway as a whole, because we try to be in a lot of places. But from my own experience in Europe, we’ve gotten quite comfortable in the Netherlands, we have a very large investment in Portugal. Spain is next on the list. Italy is after that. The jurisdiction I’ve been most disappointed in – aside from the UK with the regulatory issues there – is Germany. For such a large economy, from a commercial collective redress perspective that is a dead end. As we move through Europe, I’ll be watching the regulatory regimes and how those are tested over the coming years. Are you seeing many requests for monetization of judgements or awards, or is that not an area that you are particularly interested in?  DG: We’re especially interested in that, largely because my partners have spent a lot of their careers making those types of investments. And just speaking from my own experience, that has always been an important part of the market, and continues to be an important part of the market. I think the availability of judgement preservation insurance makes funding more available and appropriate both on the funder’s side and the client’s side. In my view, it’s very interesting to see the number of people in the market moving into the insurance space. In my view quite a surprising number – it’s certainly indicative of a trend. LFJ just announced today that Ignite has launched a capital protection insurance resource. So there are a lot of interesting things happening here. Is it still early days for this space, because there are a lot of people moving into it with interest?  MG: I share the sentiment of having a general level of surprise with how many folks from the litigation finance industry insurance has drawn. From the Lex Ferenda perspective, insurance has proven to be a very expensive option, that ultimately my clients and I don’t feel is worth the cost. But the vast majority of our investments – from an insurer’s perspective – are probably the least good fit, so that’s probably why it’s reflecting in the price. JB: I think the insurance aspect of litigation finance is here to stay. There will be growing pains along the way. I think even as recently as last week, there were disclosures in the Affordable Care Act fee dispute where the law firm got an insurance policy related to its fee award. What was interesting there, was the law firm was seeking disclosure about the policy, and in essence how it worked. So not only is it new and here to stay, we’re seeing it become public. The risk to early-stage cases is the pricing can be expensive, but what will happen over time, is like anything else, the insurers will be tracking the progress on those cases, and as funders come back as repeat customers, they’ll be looking at you and factoring that relationship into their pricing, just like how a bank factors that into a credit score. I think the best path forward is figuring out how to work together and create a level of transparency and trust, because it’s not going away. For the full recording of the event, click here.

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Private Equity and Litigation Funders Build Out MSO Pipeline into U.S. Personal Injury Law Firms

By John Freund |

Private equity firms — and a growing number of established litigation funders — are accelerating their push into U.S. personal injury law firms through management services organizations, a structure that lets outside capital share in firm economics without running afoul of state rules against non-lawyer ownership of legal practices.

As reported by Bloomberg Law, Apollo Global Management, Fortress Investment Group, and Stifel Financial Corp. are all actively eyeing the space, with Fortress reportedly behind a $125 million investment into Rafi Law Group. Louisiana's Dudley DeBosier has launched a PE-sponsored MSO that has already acquired a second firm, and Holland & Knight is advising the Amaro Law Firm on an MSO-routed capital infusion expected to close by year-end.

Litigation finance players are squarely in the mix. Mass tort funder Certum Group has acquired an MSO partnered with Dallas trial firm Sbaiti & Co., and Burford Capital has expressed interest in U.S. law firm investments through similar vehicles. Advisory firm Samson Partners Group closed 10 MSO deals in 2025 and is working on roughly 20 in 2026, the bulk of them in personal injury, while Tierra Capital Partners is fundraising a $100–125 million co-investment fund dedicated to the structure.

The MSO route — typically handling IT, marketing, intake, and back-office functions — gives funders and PE sponsors economic exposure to plaintiff-side caseflow that has historically only been accessible through case-by-case advances or portfolio facilities.

Commercial

Loopa Finance Backs Nearly 300 Chilean Families in $18 Million Villa Panamericana Construction Defects Suit

By John Freund |

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.

Commercial

Merricks Urges UK Court to Reject Innsworth’s Challenge Over £200M Mastercard Settlement Distribution

By John Freund |

The class representative in the Merricks v Mastercard collective claim has urged a London court to reject litigation funder Innsworth Advisors' judicial review of the £200 million settlement distribution, in what observers describe as the first substantive test of a Competition Appeal Tribunal settlement decision.

As reported by Law360, Walter Merricks's legal team told the High Court on Wednesday that Innsworth has already received an adequate return from the CAT-approved settlement and that its challenge should be dismissed. Innsworth argued earlier in the week that the distribution scheme is "illogical" and "flawed," contending that the tribunal failed to properly assess the funder's recovery.

The CAT had divided the settlement into three pots. Pot 1, totalling £100 million, is ring-fenced for class members. Pot 2, approximately £45 million, covers Innsworth's litigation costs. Pot 3, approximately £55 million, allocates roughly £23 million to Innsworth as the profit element of its return, bringing its total recovery to around £68 million. Innsworth contends that this amounts to only a 0.5x return on more than £45 million invested, and disputes the methodology used to set the figure.

The case has drawn close attention from the UK funding sector. A judicial review of a CAT-sanctioned distribution could establish important parameters around how courts assess funder returns in collective proceedings, particularly at a moment when the tribunal has signaled heightened scrutiny of certification and take-up in entrepreneurial class actions.