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LegalPay, India, and the Promise of Litigation Finance in Emerging Markets

May 11, 2022

LegalPay, India, and the Promise of Litigation Finance in Emerging Markets

LegalPay is a Litigation Finance startup founded in India, an emerging market for third-party legal funding. Until recently, investing in legal cases was reserved for high-end investors. The advent of LegalPay allows retail investors—those of average means–to take advantage of the potentially large uncorrelated returns that have attracted savvy investors for years. According to founder Kundan Shahi, LegalPay is the only formal player that offers third-party litigation funding for late-stage cases in India. One can’t help but wonder how this will influence the development of global Litigation Finance? Does LegalPay’s success foretell the rise of litigation funding in emerging markets?  How Does LegalPay Work? According to founder Kundan Shahi, LegalPay is a tech-focused, data-driven litigation funder which leverages a 15-point checklist proprietary algorithm in its underwriting process. The use of AI in diligencing cases is nothing new, however, LegalPay differentiates itself by enabling retail investors to commit modest amounts of capital as a means of participating in this uncorrelated asset class. Interest rates are competitive and offer high returns—plus investor and creditor interests are secured by the IBC. There are other such “crowdfunding for Litigation Finance” platforms on the market, though LegalPay seems to be performing a balancing act between being a tech platform for the masses, and a large-scale commercial funder that invests in mega cap cases (at least, as far as the Indian legal market is concerned). In 2021, for example, LegalPay offered interim financing to Yashomati Hospitals, a private medical entity in insolvency. This is in addition to more than a dozen short-term secured loans to hospitals undergoing insolvency. The funds go toward operating costs and payroll to keep the hospital running from six months up to a year. Ravindra Beleyur explains that the term sheet was finalized in fewer than two weeks from initial contact. LegalPay’s platform has worked out well for insolvent firms, and perhaps even better for the company’s spate of retail investors. A case involving Brain Logistics demonstrates the difference that backing from LegalPay can make. A bevy of delays and appeals by delinquent debtor Hero MotoCorp necessitated increased funding for Brain Logistics to continue fighting. This was provided by LegalPay, and allowed Brain Logistics to proceed with its claim against Hero MotoCorp. While the case has yet not resolved, it demonstrates how legal funding can expedite proceedings and allow for a more timely application of justice. In addition to its funding platform, LegalPay aims to create specialized products in insolvency and interim business financing, as well as carve out a piece of the legal funding market in India for itself. For insolvent companies, LegalPay offers short-term lending products that are asset-backed and secured.  Why is This Especially Important in India? Though the Indian legal system has been refined in recent years, it is still lacking when compared to that of developed nations. The Supreme Court of India is the de facto head of its unified legal system. Its purpose is to interpret laws and defend the constitution, resolve disputes, and affirm basic rights for citizens. Today, certain drawbacks of the Indian legal system make justice more difficult to achieve in a timely way. For example: As far back as 2016, the Chief Justice of India’s Supreme Court implored the Prime Minister to appoint more judges. Government inaction over judicial delays has caused significant hardships in all case types. Bloomberg Businessweek has affirmed that if India’s judges closed 100 cases every hour, 24-hours a day, it would take more than 30 years to clear the current backlog of pending cases. Ironically, there are pending cases from 30 years ago that are still unresolved. Given the dearth of judges and astronomical wait times, many companies–and even wronged individuals or businesses–are reticent to sue in India’s courts. New cases must work their way up from lower courts, which means they often take years to reach completion. Given all of this, it’s clear that in India today, finding innovative solutions to the old adage “justice delayed is justice denied,” is more important than ever. Who is Partnering with LegalPay? The well-documented challenges in India’s legal market may dis-incentivize investors from getting involved in TPLF in India. At the same time, LegalPay is amassing impressive partnerships that will enable it to make offers to companies undergoing insolvency. LegalPay’s Series A funding, a special purpose vehicle, found itself oversubscribed in a short amount of time—demonstrating consumer confidence in the concept and in its implementation. This first SPV was intended to diversify capital with a portfolio of 8-12 cases, and allowed retail investors to commit as little as Rs 25,000 in a single case. A second SPV will emphasize commercial disputes. These SPVs help investors diversify by investing in a basket of commercial cases that typically generate a pre-tax IRR of over 20 per cent. Incidentally, the entire investment process is digital and seamless, including signing investor documents, KYC, tracking of the basket of claims, and portfolio monitoring and analytics. Among those partnering with LegalPay is Jumbo Finance, which provides secured interim financing. Managing director Smriti Ranka explained that there are many benefits to investing in distressed debt assets. US hedge fund Hedonova is another LegalPay partner that, according to Shahi, will enhance LegalPay’s plan to aggressively grow its Indian market. Naples Global is also onboard with LegalPay, launching a $5MM fund that’s expected to protect the interests of founders in the event of disputes among the board. With disputes between founders and investors on the rise, this development may be crucial in attracting new investors and adding a sense of security to the opportunities LegalPay provides. The current $20 billion legal expense market in India has enabled seed funding led by 9Unicorns and Accelerator VC, along with LetsVenture, and angel investor Ambarish Gupta. Much of these funds will be deployed toward late-stage litigation—currently plentiful given that delays are rampant due to COVID. Also among LegalPay’s list of partners are Amity Technology Incubator and Venture Catalysts. What’s the Next Step? How will innovators like LegalPay alter the Litigation Finance landscape?  The complexities of global litigation funding make predictions like this difficult. As noted earlier, the Indian legal market is full of challenges, as are all emerging markets (heck, even most mature legal markets can be labyrinthine at times). But those challenges keep competitors out of the fray, which means funders willing to take the plunge typically have their pick of the litter in terms of cases. Lack of competition can present itself as a blue ocean of opportunity, as early entrants into the US and UK litigation funding markets can attest. And India certainly has a lot of untapped potential. The prospect of getting in on the ground floor of a maturing legal market that is home to over 1 billion people may be too enticing for some funders to pass up.  While LegalPay’s emergence may encourage more partnerships between larger funders and retail investor platforms, it’s unlikely we will see funders dive head-first into emerging markets like India any time soon (for example, opening an office in Bangalore). That type of commitment will take time, as there are less risky jurisdictions out there where the TAM has yet to be saturated (like Japan, South Korea and Israel–where Woodsford maintains an office and Validity Finance recently opened shop).  Yet established funders in Australia, the US and UK would do well to keep an eye on Shahi’s startup, given how its numerous strategic partnerships and technological capabilities enable both large-scale case investment, and promising returns for retail investors. Any company leveraging AI to effectively source and/or diligence cases deserves a second look, and one doing that in an emerging market like India deserves extra consideration. 
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Daily Caller Slams Third Party Funding as Funders Face Mounting Media Attacks

By John Freund |

In a harsh opinion piecd, the conservative outlet The Daily Caller blasts third party litigation funding (TPLF), casting the practice as a “scam” that feeds frivolous lawsuits, burdens the economy, and unfairly enriches hidden investors at the expense of all Americans.

The op-ed, penned by Stephen Moore, draws a dire picture: trial lawyers allegedly “suck blood out of the economy” through class action suits that generate millions for attorneys but little for the plaintiffs. The piece points to numbers — a projected $500 billion hit annually to the U.S. economy, and tort cost growth more than double the inflation rate — to argue that the scale of litigation has outpaced any legitimate quest for justice.

Where TPLF comes in, according to Moore, is as the lubrication for what he sees as a booming lawsuit industry. He claims that unknown investors donate capital to lawsuits in exchange for outsized shares of any settlement, not the injured party. These hidden financial interests, he argues, distort the incentives for litigation, encouraging suits where there is no “real” corporate villain, a concern especially pointed at class action and litigation targeting major media or tech firms.

Moore cites roughly $2 billion in new financing arranged in 2024 and a fund pool of $16.1 billion total assets as evidence TPLF is growing rapidly. He endorses the Litigation Transparency Act, legislation introduced by Darrell Issa, which would require disclosure of such funding arrangements in federal civil cases. In Moore’s view, transparency would strip the “cloak of secrecy” from investors and curb what he describes as “jackpot justice,” lawsuits driven less by justice than by profit.

But the tone is unmistakably critical. Moore frames the practice as a parasitic industry that drains capital, discourages investment, and suppresses wages. He cites recent reforms in states like Florida under Ron DeSantis as evidence that limiting litigation can lead to lower insurance premiums and greater economic growth.

For legal funders, this op-ed and others like it underscore a growing media trend: skepticism not just of frivolous lawsuits but of the very model of third party funding. To preserve reputation and legitimacy, funders may need to do more than quietly finance cases. They may need to publicly engage, explain their business model, and advocate for regulatory standards that ensure transparency while preserving access to justice.

Commercial

Global Litigation Funding Thrives, Yet Regulation Still Looms

By John Freund |

The global litigation funding market is experiencing strong growth, yet lingering regulatory uncertainties continue to shadow its trajectory. According to the Chambers Global Practice Guide, the market was valued at approximately US $17.5 billion (AUD $26.9 billion) in March 2025 and is projected to surge to US $67.2 billion (AUD $103 billion) by 2037.

An article in LSJ states that major drivers of this expansion include rising legal costs, complex cross-border commercial litigation, and increased demand from small and mid-sized law firms seeking external funding to build out specialist teams. While funders embrace the growth opportunity, critics raise concerns around transparency, claimant autonomy, and potential conflicts of interest.

In Australia, a notable development occurred on 6 August 2025 when the High Court of Australia in Kain v R&B Investments Pty Ltd clarified that federal courts may make common fund or funding equalisation orders for the benefit of third-party funders (but not for solicitors) in class actions—except in Victoria, which still allows contingency fees. This decision is seen as a win for litigation funders, providing greater clarity across most Australian jurisdictions. Australia also saw regulatory reform in December 2022 when the Corporations Amendment (Litigation Funding) Regulations came into force, exempting litigation funding schemes from the MIS/AFSL regime under specific conditions and emphasising the mitigation of conflicts of interest as a compliance feature.

On the regulatory front, the Australian Securities and Investments Commission (ASIC) is considering extending relief instruments that exempt certain litigation funding arrangements from the National Credit Code and financial services licensing until March 2030. Meanwhile in the UK, the proposed Litigation Funding Agreements (Enforceability) Bill 2024 seeks to remove the classification of third-party funding agreements as “damages-based agreements” under the Courts & Legal Services Act – a move which proponents say will enable greater access to justice and clear the path for global funders.

Announcements Commercial Deals

Apex Group Ltd Selected to Support Seven Stars Legal Group Ltd’s Pioneering Tokenised Litigation Fund in Dubai

By John Freund |

Apex Group Ltd (“Apex Group”), one of the world's largest fund administration and solutions providers, today announced it has been selected to provide fund administration and digital asset infrastructure for the anticipated Seven Stars Legal Group Ltd (“Seven Stars”) Tokenised Litigation Fund, a pioneering investment vehicle that will combine institutional-grade litigation finance with blockchain technology.

The proposed fund, targeting GBP 50-250 million in commitments with an anticipated first close of GBP 50 million by March 31, 2026, represents a significant innovation in alternative investments. Once launched, the tokenised structure is expected to reduce traditional investment minimums from GBP 1 million to GBP 50,000, making institutional-quality litigation finance accessible to a broader range of qualified investors.

Subject to regulatory approvals and successful fund structuring, Apex Group is positioned to provide comprehensive fund administration services, while its digital asset platform, Apex Digital 3.0 (including Tokeny), would handle the token issuance and management infrastructure. This dual capability positions Apex Group as the sole provider managing both traditional fund administration and digital asset components under one unified platform.

Upon launch, Seven Stars will act as Investment Manager responsible for portfolio selection and management.

“Our selection to support Seven Stars' innovative fund structure exemplifies our commitment to bridging traditional finance with digital innovation,” said Agnes Mazurek, Global Head of Digital Assets at Apex Group. “By providing both conventional fund administration and tokenisation infrastructure, we're positioned to help fund managers unlock new distribution channels and operational efficiencies while maintaining institutional-grade governance and compliance standards.”

Offering up to a capped 16% annual return backed by diversified UK litigation portfolios, Seven Stars brings significant experience to the venture, having already deployed over GBP 44 million in UK litigation finance and funded more than 56,000 legal claims with a proven track record of performance, together with a team which includes leading Silk, Louis Doyle KC, who sits on the board and Advisory Committee at Seven Stars.

“Apex Group's expertise in both traditional fund administration and digital assets makes them the ideal partner for this groundbreaking initiative,” said Leon Clarance, Chief Strategy Officer at Seven Stars. "Their infrastructure will enable us to deliver the operational efficiency gains of tokenisation while maintaining the rigorous compliance and reporting standards our institutional investors expect.”

Mazurek added: “We are pleased to be supporting Seven Stars in this groundbreaking project. Our mission at Apex Group is to help clients bridge the TradFi and DeFi universes and this project perfectly represents this connectivity.”

Planned Partnership Capabilities

The anticipated partnership would leverage several key Apex Group capabilities:

  • Fund Administration: NAV calculation, investor services, and regulatory reporting 
  • Digital Asset Infrastructure: Token issuance, custody, and lifecycle management via Apex Digital 3.0
  • Regulatory Compliance: Full regulatory oversight and compliance monitoring 
  • Investor Onboarding: Streamlined KYC/AML processes for both traditional and digital investors

The proposed tokenised structure would enable secondary trading after a 6-month lock-in period, providing liquidity options traditionally unavailable in litigation finance funds. Smart contract automation is projected to reduce administrative costs by up to 90%, with anticipated savings passed through to investors.

This announcement follows Apex Group's recent expansion of its digital asset capabilities in the DIFC, positioning the firm as a leader in supporting the convergence of traditional finance and blockchain technology in the Middle East's premier financial hub.

About Apex Group

Apex Group is dedicated to driving positive change in financial services while supporting the growth and ambitions of asset managers, allocators, financial institutions, and family offices. Established in Bermuda in 2003, the Group has continually disrupted the industry through its investment in innovation and talent.

Today, Apex Group sets the pace in fund and asset servicing and stands out for its unique single-source solution and unified cross asset-class platform which supports the entire value chain, harnesses leading innovative technology, and benefits from cross-jurisdictional expertise delivered by a long-standing management team and over 13,000 highly integrated professionals.   

Apex Group leads the industry with a broad and unmatched range of services, including capital raising, business and corporate management, fund and investor administration, portfolio and investment administration, ESG, capital markets and transactions support. These services are tailored to each client and are delivered both at the Group level and via specialist subsidiary brands.

The Apex Foundation, a not-for-profit entity, is the Group’s passionate commitment to empower sustainable change. 

About Seven Stars Legal

Seven Stars Legal is a specialist litigation finance provider focused on high-volume, precedent-based UK consumer claims. Founded by a team with over GBP 380 million in litigation finance experience, the company provides institutional investors with access to uncorrelated, asset-backed returns through secured lending to regulated UK law firms. Seven Stars has funded over 56,000 claims since 2022, maintaining a zero-default track record through its multi-layered security framework and AI-enhanced due diligence processes