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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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Trucking Group Presses Case Against Hidden Funding in Crash Lawsuits

The trucking industry is intensifying its scrutiny of third-party litigation funding, arguing that undisclosed outside capital is distorting the economics of truck-crash lawsuits and driving up the cost of doing business.

As reported by Land Line Media, the Owner-Operator Independent Drivers Association contends that outside investors — sometimes including foreign entities — are bankrolling crash litigation without transparency, prolonging cases, inflating damages, and leaving plaintiffs with modest returns while funders capture the larger share of any recovery. In some instances, the group warns, foreign government involvement raises national-security questions.

The article frames the issue against a wave of state-level legislation. Ohio has enacted disclosure requirements and barred foreign participation outright, with Rep. Meredith Craig declaring that "foreign actors have profited off Ohio citizens and businesses by investing in our courts." North Carolina has gone further, imposing an outright ban on third-party funding backed by fines of up to $50,000, while New Hampshire has prohibited financing by foreign governments and designated adversarial nations. Michigan has approved disclosure and registration requirements and banned foreign entities and incentive payments to attorneys and medical professionals.

Industry voices echo the theme: Tom Balzer of the Ohio Trucking Association argues that such funding "incentivizes frivolous claims, prolongs litigation, and inflates damages." Together, the measures reflect a coordinated push to bring litigation finance in trucking cases into public view — and a signal that transportation is becoming a central front in the national funding-transparency debate.

Commercial

Cross-Jurisdictional Analysis Charts Diverging Rules for Litigation Funding

Third-party litigation funding has grown into a multibillion-dollar force across major legal markets, yet the rules governing it remain strikingly inconsistent from one jurisdiction to the next, according to a new cross-jurisdictional analysis.

As reported by JD Supra, the review — authored by Arthur Coviello, Colin Dunn, and Mark Selwyn of WilmerHale — examines third-party funding across the United States, United Kingdom, Germany, China, and the Unified Patent Court. It notes that funders now manage billions in assets, with an estimated 20% committed to patent litigation, and that the U.S. leads but no longer dominates a market with established industries in the U.K., Germany, and China.

The authors highlight a sharp regulatory divergence. The United States has built a patchwork of state and federal measures, including disclosure requirements, while the U.K., Germany, China, and the UPC have largely declined to adopt comprehensive rules despite voicing similar concerns about conflicts of interest, funder control, and foreign influence.

The analysis catalogs recent developments: at least five bills pending in Congress addressing transparency and national-security concerns, the lingering effects of the U.K.'s 2023 PACCAR decision and the Civil Justice Council's call for "light touch" regulation, the European Commission's November 2025 decision not to adopt proposed funding rules, and the International Trade Commission's recent disclosure proposal. Without mandatory disclosure, the authors argue, judges and parties cannot reliably assess who holds a stake in a case or where potential conflicts may lie.

Commercial

Funding Collapse Ends Musical-Instrument Collective Action, Triggering £1.5M in Costs

A proposed UK collective action against five musical-instrument manufacturers has collapsed after its litigation funding fell through, leaving the proposed class representative facing roughly £1.5 million in costs.

As reported by Legal Futures, the Competition Appeal Tribunal addressed the withdrawal of five collective proceedings brought by proposed class representative Elisabetta Sciallis against Fender, Korg, Roland, Yamaha, and Casio. The claims followed a Competition and Markets Authority finding that the manufacturers had restricted retailers' freedom to set prices online.

Ms Sciallis had initially pointed to a funding agreement with North Wall Capital, first set at £6.5 million and later increased to £18 million as more claims were filed. Negotiations between the funder and her firm, Pogust Goodhead, ceased in early 2023, but the tribunal found that the funder's departure was not clearly disclosed until shortly before a March 2026 case management conference — at which point the firm confirmed the North Wall agreement had never materialised and that some 25 alternative funders had been approached without success.

The tribunal, which was critical of how the funding position had been communicated, ordered indemnity costs from April 2023 onward, including £608,000 summarily assessed for three defendants and interim orders of £850,000 for two others. Ms Sciallis withdrew all five proceedings ahead of a June 2026 hearing that would have examined the funding. The case underscores how quickly a collapse in third-party backing can unwind even a well-advanced collective claim.