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Key Takeaways from the LFJ Podcast with Mani Walia of Siltstone Capital

February 3, 2022

Key Takeaways from the LFJ Podcast with Mani Walia of Siltstone Capital

On the latest episode of the LFJ Podcast, we spoke with Mani Walia, Managing Director, General Counsel and Chief Compliance Officer and Siltstone Capital. Siltstone is a Houston-based alternative investment firm that invests in litigation finance claims, focusing on $500,000 to $5 million funding requests. Siltstone is also producing LitFinCon, the inaugural litigation finance conference in the Houston area, set to take place on March 2nd and 3rd of 2022. Below are some key takeaways from the discussion: Re: Siltstone’s focus areas Siltstone was founded nearly ten years ago in 2013 by a group of entrepreneurial, energy focused investors. Our team being entrepreneurial, was able to recruit folks with a very interesting set of backgrounds—not just energy sophistication on the nitty gritty of energy assets, but a legal team that understood that there might be value in claims. Through the course of our energy work, we discovered that there may be times that we have to evaluate cases and see if there is any merit to a potential case. And that’s where my addition to the team was something that shaped how we look at things. I have a litigation background and am honored to have learned how to case pick from one of the premiere litigation firms in the country. We had the impetus to start a litigation finance fund focused on energy because of the unique skills set that our team displays. So these two strategies are distinct, they have different bases and stakeholders—but there’s overlap. Re: Limited Partners and Structuring of Funds I’ll note that our funds are separate, so we have a set of funds that are tailored to the energy investor, and then a separate set of funds for those who might want exposure to litigation finance. We’re proud to have successfully closed our second such litigation finance fund in December of last year, 2021. Some folks want a little exposure in both areas, in particular because of the uniqueness of our team—the energy expertise and the focusing on finding value in energy litigation. Re: Types of Claims: Jurisdiction, Single case v Portfolio, Sizes? First, we’re really proud to have entered into a very collegial space. Most of the litigation finance brethren that we have have helped pave the way for entities like us. We’re guided by our experience, so we enjoy a laser-like focus with helping provide solutions only in the commercial context. We haven’t ventured outside into consumer finance or injury cases. We also, for the same reasons, enjoy funding patent infringement cases. Earlier in my career, I tried patent infringement cases and by actively litigating a case or subject matter you really develop the ability to understand what makes a case meritorious or advantageous or what makes the case not good. So those are the two sub-focuses in our commercial lending. We enjoy looking at single case risk or portfolio funding. Q: On ESG Investing & Access to Justice At the end of the day, the job of a funder is to make sure there’s access to justice for somebody who thinks he or she should have a day in court. Embedded in that is an inherent ESG leveling-the-playing-field thought process. Learn more about Siltstone’s upcoming event, LitFinCon (the inaugural litigation finance conference in the Houston area), here.
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Commercial

WilmerHale Critiques VC-Style Patent Funding for Misaligned Incentives

By John Freund |

In a provocative new white paper, WilmerHale attorneys argue that venture capital–style strategies applied to patent litigation funding are fueling a wave of meritless lawsuits and stifling innovation in the U.S. tech economy.

An article in JD Supra outlines the firm's concerns about how litigation funders increasingly adopt a venture capital mindset when backing large portfolios of patent suits with the expectation that one or two major wins will offset the losses.

The paper contends that this model encourages the pursuit of weak or overbroad claims by non-practicing entities (NPEs), often through shell companies that obscure the funders' identities and incentives. In one example cited, a single defendant was forced to defend against dozens of claims, most of which were later dropped or invalidated, resulting in significant financial and operational burdens.

The authors also raise national security concerns, pointing to the lack of transparency around foreign investors that may leverage U.S. litigation as a strategic tool. In response, WilmerHale recommends mandating up-front disclosure of litigation funders, expanding fee-shifting mechanisms under laws such as 35 U.S.C. § 285, and amending the Federal Rules of Civil Procedure to improve accountability.

These calls for reform arrive at a moment of increased scrutiny on third-party litigation finance, particularly in the intellectual property space. With transparency and disclosure at the center of WilmerHale’s proposed solutions, the paper adds to a growing chorus of voices calling for more regulatory oversight in the litigation finance ecosystem.

Announcements Commercial

ILFA Welcomes Commissioner McGrath’s Rejection of EU Regulation for Third-Party Litigation Funding

By John Freund |

On 18 November 2025, European Commissioner for Justice Michael McGrath closed the final meeting of the EU’s High-Level Forum on Justice for Growth with a clear statement that the Commission does not plan new legislation on Third Party Litigation Funding (TPLF). 

He added that Forum participants also indicated that there is no need to further regulate third-party litigation funding.

Instead, Commissioner McGrath said the Commission will prioritise monitoring the implementation of the Representative Actions Directive (RAD) over any new legislative proposals. 

(video from 2.32 here). 

Paul Kong, Executive Director of the International Legal Finance Association (ILFA), said:  “We’re delighted to see Commissioner McGrath’s clear statement that EU regulation for third-party litigation funding is not planned. This appears to close any talk of the need for new regulation, which was completely without evidence and created considerable uncertainty for the sector.

Over several years, ILFA has consistently made the case that litigation funding plays a critical role in ensuring European businesses and consumers can access justice without financial limitations and are not disadvantaged against larger and financially stronger defendants. New legislation would have choked off the availability of financial support to level the playing field for claimants. 

We will continue to work closely with the Commission to share the experiences of our members on the implementation of the RAD across the EU, ensuring it also works for claimants in consumer group actions facing defendants with deep pockets.”

About ILFA

The International Legal Finance Association (ILFA) represents the global commercial legal finance community, and its mission is to engage, educate and influence legislative, regulatory and judicial landscapes as the global voice of the commercial legal finance industry. It is the only global association of commercial legal finance companies and is an independent, non-profit trade association promoting the highest standards of operation and service for the commercial legal finance sector. ILFA has local chapter representation around the world. For more information, visit www.ilfa.com or @ILFA_Official. 

About the High-Level Forum on Justice for Growth

European Commissioner for Justice Michael McGrath launched the High-Level Forum on Justice for Growth in March 2025 to bring together legal industry experts to “focus on and discuss together how justice policies can contribute to – and further support – European competitiveness and growth”. The final meeting of the Forum took place on 18 November 2025, in Brussels. 

Commercial

Litigation-Funding Investment Market to Hit USD 53.6B by 2032

By John Freund |

A new report projects that the global litigation-funding investment market will reach approximately USD 53.6 billion by 2032, growing at a compound annual growth rate (CAGR) of about 13.84 percent. This robust growth forecast is driven by increasing demand for third-party financing in commercial litigation, arbitration, and high-stakes legal disputes. Investors are seeking exposure to legal-asset strategies as an uncorrelated return stream, while funders are scaling up to handle more complex, higher-value outcomes.

According to the article in Yahoo News, the market’s expansion is fueled by several structural shifts: more claimants are accessing capital through non-traditional financing models, law firms are leaning more on outside capital to manage cost and risk, and funders are expanding their product offerings beyond single-case funding. While the base market size was not specified in the summary, earlier industry data suggests significant growth from previous levels, with the current projection indicating a several-fold increase.

Still, the path forward is not without challenges. Macroeconomic factors, regulatory ambiguity, and constraints within the legal services ecosystem could affect the pace and scale of growth. Funders will need to maintain disciplined underwriting standards and carefully manage portfolio risks—especially as the sector becomes increasingly mainstream and competitive.

For the legal funding industry, this forecast reinforces the asset class's ongoing maturation. It signals a shift toward greater institutionalization and scale, with potential implications for pricing, transparency, and regulatory scrutiny. Whether funders can balance growth with rigor will be central to the market’s trajectory over the coming decade.