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Litigation Finance Journal’s Quarterly Industry Roundup

Litigation Finance News
July 29, 2020

Litigation Finance Journal’s Quarterly Industry Roundup

Litigation Finance News
It’s clear by now that 2020 has been a year like no other. Industry growth and the impact of COVID make this an ideal time to catch up on all of the relevant issues impacting the commercial Litigation Finance industry. With that in mind, LFJ is hosting a panel discussion that will cover a wide range of topics, including the Burford/Muddy Waters saga, the IMF/Omni merger, the rise in IP litigation, hedge fund interest in the funding sector, and much more.  The panel will be moderated by Slingshot Capital founder Ed Truant. Truant is an investor with a unique perspective on commercial litigation finance, backed up by years of experience in the field. The panel will feature a collection of industry experts:  Molly Pease is the managing director of Curiam Capital, and a former litigator whose expertise includes insurance, antitrust, and securities. She has also been an Executive Director and has worked as General Counsel—providing her a varied and nuanced perspective on a vast array of legal subjects. Mick Smith is the founder of Almatura, and co-founded Calunius Capital in 2006. He has studied Mathematics and Law at Cambridge, and is pursuing a Masters in Data Science. Robert Hannah, co-founder of Augusta Ventures, spent 20 years managing hedge funds before becoming acting Chief Investment Officer for Mako Investment Managers—an organization he co-founded. Hannah has an LLB and an MBA from Cranfield School of Management. He is currently the Managing Director of the London office. William Farrell Jr. is the managing director and co-founder of private investment company Longford Capital. His current duties include underwriting, sourcing, and monitoring investments. He has decades of litigation experience and as a government prosecutor. Farrell has also served as a partner in the commercial litigation departments of two different firms. The panel is audio-only and will be held Thursday, July 30th at 1 pm EST. It will feature a 45-minute panel discussion that will be followed by a question and answer period with attendees.  For more information and to purchase tickets, please visit this link.
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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.