Litigation Financing is an Investment in Democracy

Litigation Financing is an Investment in Democracy

The following is a contributed piece from Rory Donadio, CEO of www.tribecalawsuitloans.com There are many ways to look at what those of us in litigation funding do. Is it a pre-settlement cash advance or a non-recourse loan? Is it truly lending, or is it an investment? But far more important than what we call our work, is what we actually do. According to a September 2021 Bloomberg Law Litigation Finance Survey, 88% of the responding attorneys believe that litigation finance enables better access to justice. Without justice for all, democracy fails. So, I submit that litigation financing is an investment in democracy. Since the inception of this industry, back when it was ripe for opportunity and unregulated like the wild west, I have been excited and driven to help real people in their search for justice. We help level the playing field between large, powerful companies and financially damaged individuals who have been harmed. A pre-settlement loan robs the insurance company of the plaintiff’s economic desperation they are so eager to weaponize as they strive to protect their clients from accountability. With the litigation funding we provide, ordinary Americans can do the extraordinary — hold the most powerful entities in our society accountable for their actions. What could be more fundamental to democracy than this? We are investing in democracy. Believe it, and never let it go.

Advice to Others in Litigation Financing

When Tribeca advises newcomers to the industry, I tell them to diversify their portfolios to invest in a wide range of cases. I encourage them to prioritize relationships with everyone — with clients, lawyers, the mailman, the person checking your groceries at your local store, that stranger who looks like they need a friend, and of course, other funders and brokers. Most importantly, I advise them never to lose sight of the genuine good you can do with litigation funding. Never forget that we are helping real people in need — that we are investing in democracy. Let me share a story of one of our clients, who I am now proud to call my friend. Derrick Hamilton’s case is one — of many — that clarified how litigation financing is indeed investing in democracy.

When Democracy Falters

In 2011, Derrick Hamilton was released from prison after serving 21 years for a murder he did not commit. He was fully exonerated in 2015. In this country, we say it is better to let ten guilty men go free rather than convict a single innocent man. Yet our judicial system snatched more than two decades of this man’s life. Our legal system failed him. As bad as his wrongful imprisonment was, the way he was treated after his release was almost worse. He was released from prison into poverty with no support structure. And when he sued the state for compensation for the wrongful imprisonment — you know what happened next — the state’s attorneys stalled. Despite knowing the state wrongfully locked this man away from his family, his friends, and his life, knowing the state owed him compensation for this vast injustice, the attorneys representing New York and Connecticut still dragged out his compensation negotiations for six years. Think about that for a moment. There were no complex issues to analyze or painstaking research required. Nevertheless, more than two decades of this man’s life were stolen — a fact recognized by all sides. They delayed his compensation — for six entire years — because they could. They hoped that his financial straits would force him to accept far less money than he was owed, just to make the pain stop. It nearly worked. Fortunately, we were able to help fund his wrongful incarceration lawsuit. I gained so much more than a business deal from the experience.

All Money is Alike

If you are desperate and cannot scrape the funds together to keep a roof over your family’s heads, or provide necessary medical care, then every dollar is precious. But when you have enough money to cover all your needs and wants, then every dollar is just like any other. Forever chasing money simply adds up to bigger stacks of paper. But when we invest in people, we create opportunities to flourish. Unfortunately, sometimes these opportunities are squandered. But through passion, hard work, and faith in God, some people turn their chance to thrive into a way to lift up those around them. When this happens, you know your investment has paid rich dividends.

Investing in People Reaps Enormous Dividends

Supporting cases like Derrick’s crystallized my sense of the work we do. I recognized that, in a small way, I was investing in him and our democracy by helping him continue his fight for justice. I initially helped one man. Then, with the pre-settlement funding we provided, Derrick opened a business of his own, and invested in someone else’s restaurant. He netted the money he needed to hire other exonorees to work with him, pursuing justice for others still behind bars. He did this all while continuing to fight for the compensation he deserved. When I look at all Derrick accomplished with the lawsuit loan I provided — just a cash advance on the money he was owed — I am both humbled and in awe. I helped Derrick Hamilton, but he, in turn, helped his family start a business and another company grow. He has employed other men in his very same circumstance, others unjustly imprisoned, and together, they help even more people. Every dollar is a duplicate of another, but a single life that is improved reaches far and wide, bettering the lives of others. Whether someone we help plants a garden, raises a child, or creates opportunities for others our society has left behind, it is a beautiful thing. And each of these lives is singular, unrepeatable, and utterly unique. Calculating the way one life can enhance so many others, strengthening our society and making our democracy work just a little bit better is much messier than standard accounting, and more challenging. The math is harder, but it’s so much more rewarding!

Building a Team and Moving Forward

More advice for others starting out in litigation financing — surround yourself with quality people who share your vision. After 28 years in the industry, I now have an incredible staff that does just that. They are open-minded, caring, and hardworking. They dig into the ways legal funding invests in people and strengthens our democracy. They never shy away from the messy accounting involved. What’s different for me today, is that I am not afraid of admitting that I have made a mistake, I can own it, and I can learn from it. When I was one of the litigation financing industry’s pioneers back in the 90s, there were no guardrails or guidelines. In many ways, we were inventing the industry as we worked. Together we helped a lot of people, but I also made plenty of mistakes. I lost deals and made loans I should have walked away from, but these mistakes helped to form the man and the investor I have become today. My faith has allowed me the comfort of knowing there is enough for my storehouse. I don’t have to have every deal. I credit self-reflection, passion, work ethic, and my relationship with God as the secrets to my success. In addition, the willingness to make mistakes and to learn from them — to grow — is as essential to success in this field as in any other. Each case is so different from the next; there’s plenty of trial and error involved. So when mistakes happen, the truth is better revealed because you see the problem more clearly. The goal should not be to avoid failure but to learn from it and move on. My mantra has become, “Yesterday’s denials are today’s approvals.” I find my passion for litigation financing redoubled. I feel honored to be in a position to invest in our democracy’s justice system.

Where is the Litigation Financing Industry Headed?

As long as we have positive regulation in the market, the litigation financing industry will continue to grow. We must be proactive with legislation to keep companies honest and keep the industry available to those who need it. I see legal funding as a genuinely noble business, where we use our money to help vulnerable people in distress meet their needs and secure the compensation they deserve. Sadly, some see nothing but an opportunity to victimize these people further and take quick profits with no regard to the damage they inflict. Our industry needs sensible regulations that do the following:
  • Rein in predatory lending practices
  • Allow consumers to get the help they need
  • Protect the litigation funder’s investment in the case
Currently, there are bills in Kentucky, North Carolina, New Jersey, Colorado, and New York that we are watching closely. At this time, most appear to be positive legislation that can benefit our industry and our clients. Too often, legislators don’t understand our industry, or they paint the good and bad actors with the same brush, so it’s vital to be proactive as legislation is written and debated. Litigation financing can serve a diversity of clients and needs. Sometimes, it helps individuals pay their rent while settlement negotiations drag on. Other times, it can provide a litigator with the funds they need to hire an expert witness or get an expensive analysis completed that can make their case. It can also be used for operating capital for commercial entities during litigation to cover their costs. Get creative in the way you look at legal funding, and you’ll always find people who will benefit from your support. I am the CEO of Tribeca Lawsuit Loans. We fund a wide diversity of personal injury and mass tort litigation. The cases I am closely watching in 2022 include: Lastly, wrongful imprisonment cases will forever be near and dear to my heart. Accordingly, I’ll be fascinated to see how the class action lawsuit against Hertz — for its disgraceful practice of falsely accusing customers of rental vehicle theft—shakes out. The author of this article is Rory Donadio. Rory can be reached by email: rory.donadio@tribecacapllc.com  
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Three Sounds, Three Purposes: Understanding Consumer Legal Funding, Commercial Litigation Financing, and Attorney Portfolio Financing

By Eric Schuller |

The following was contributed by Eric K. Schuller, President, The Alliance for Responsible Consumer Legal Funding (ARC).

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When people talk about third party litigation financing, they often lump everything into one bucket—as if every type of funding that touches the legal system is essentially the same. But that’s a misconception. The world of legal finance is much more varied, and each type serves a distinct role for a distinct audience.

A good way to understand the differences is to step away from the courtroom and into the world of music. Think of Consumer Legal Funding as a rock band, Commercial Litigation Financing as a symphony orchestra, and Attorney Portfolio Financing as a gospel choir.

All three make music—they all provide funding connected to the legal system—but they produce very different sounds, are organized differently, and serve different purposes. Let’s explore these three “musical groups” of legal funding to understand how they work, why they exist, and what separates them.

Consumer Legal Funding: The Rock Band

Immediate, Personal, and Audience-Driven

A rock band connects directly with its fans. The music is raw, emotional, and often tied to the lived experiences of ordinary people. That’s exactly what Consumer Legal Funding does—it provides individuals with direct financial support while they are waiting for their personal injury cases to resolve.

Most people who seek consumer legal funding have been in a car accident, or experienced some other harm caused by negligence. While their cases work their way through the legal system, they still need to pay rent, buy groceries, keep the lights on, and support their families. Consumer Legal Funding steps in to help them cover these day-to-day expenses.

Like a rock band that thrives on the energy of a crowd, Consumer Legal Funding is closely tied to the needs of everyday people. It’s not about abstract legal theories or corporate strategy. It’s about giving real people financial breathing room so they can withstand the pressure from insurers who might otherwise push them to settle for less than they deserve.

Flexibility and Accessibility

Just as a rock band doesn’t require a massive concert hall or multimillion-dollar backing, Consumer Legal Funding is accessible on a small, personal scale. A consumer can request a few hundred or a few thousand dollars to cover immediate needs, and repayment is contingent on the case outcome. If the plaintiff loses, they owe nothing.

This non-recourse structure mirrors the risk of a rock band going on tour—they might make money, or they might not, but the fans are there for the experience. Similarly, Consumer Legal Funding companies take the risk that the case might not succeed, and they may not get their investment back.

Critics and Misconceptions

Rock bands often face criticism for being too loud, too disruptive, or too unconventional compared to “serious” classical music. Consumer Legal Funding gets similar pushback. Critics sometimes argue it encourages frivolous lawsuits or drives up settlement costs. But the reality is the opposite—the funds provided to a consumer doesn’t fund lawsuits; they fund life necessities for individuals already in the legal system.

Consumer Legal Funding’s role is narrow but vital. Like a rock band giving a voice to ordinary people, it empowers individuals who might otherwise be silenced by financial hardship.

Commercial Litigation Financing: The Symphony Orchestra

Complex, Structured, and High-Stakes

Where Consumer Legal Funding is the rock band of the legal funding world, Commercial Litigation Financing is the full symphony orchestra—large, complex, and meticulously coordinated.

Here, the players are not individuals injured in accidents but corporations, investors, and law firms involved in high-value commercial disputes. These cases can involve intellectual property battles, antitrust issues, international contract disputes, or shareholder actions. The stakes often run into the tens or hundreds of millions of dollars.

Like an orchestra, Commercial Litigation Financing is structured and multi-layered. Each section—strings, brass, woodwinds, percussion—must work together under the baton of a conductor. In litigation finance, this “conductor” is the funding company, aligning investors, lawyers, and plaintiffs toward a common goal: seeing the case through to resolution.

Strategic and Long-Term

Orchestras don’t play three-minute songs; they perform long symphonies that require endurance, precision, and careful planning. Similarly, Commercial Litigation Financing is not about immediate cash flow. It’s about supporting a complex legal strategy over years of litigation.

Funds can cover attorney fees, expert witnesses, discovery costs, and even corporate operations while a case drags on. The financing enables companies to pursue claims they might otherwise abandon because of the sheer cost and duration of litigation.

Audience and Impact

The audience for an orchestra is often more formal, more elite, and more willing to pay for a grand performance. Commercial Litigation Financing likewise serves a specialized, high-stakes audience: multinational corporations, hedge funds, and sophisticated investors. The outcomes affect entire industries and markets, not just individual households.

While a rock band might play in bars or stadiums, an orchestra plays in concert halls before an audience expecting refinement. That’s the difference in scale between Consumer Legal Funding and Commercial Litigation Financing.

Attorney Portfolio Financing: The Gospel Choir

Collective Strength and Community

If Consumer Legal Funding is a rock band and Commercial Litigation Financing is a symphony orchestra, then Attorney Portfolio Financing is a gospel choir. It’s powerful, collective, and rooted in the idea of strength in numbers.

Attorney Portfolio Financing provides capital to law firms by pooling together multiple cases—often personal injury or contingency fee cases—into one financing arrangement. Instead of betting on a single case, the funding spreads across a portfolio, much like the voices of a choir blend to create a unified sound.

Stability and Predictability

A gospel choir doesn’t rely on one soloist to carry the performance. If one voice falters, the rest keep singing. Similarly, portfolio financing reduces risk because the outcome of any one case doesn’t determine the success of the financing. The strength lies in the collective performance of many cases.

This allows law firms to take on more clients, expand their practices, and better withstand the financial ups and downs of litigation. For clients, it means their attorneys have the resources to see their cases through rather than being pressured into quick settlements.

Purpose and Spirit

Gospel choirs aren’t just about music—they’re about inspiration, resilience, and community. Attorney Portfolio Financing carries a similar spirit. It’s designed not only to provide financial stability for law firms but also to empower them to serve clients more effectively.

While the audience for a gospel choir is often the community itself, the “audience” for portfolio financing is law firms and, indirectly, the clients who benefit from better-resourced representation.

Comparing the Three Sounds

To appreciate the differences, let’s put the three side by side:

Type of FundingMusical AnalogyAudienceScalePurpose
Consumer Legal FundingRock BandIndividuals waiting for case resolutionSmall-scale, personalHelps consumers cover living expenses while awaiting settlement
Commercial Litigation FinancingSymphony OrchestraCorporations, investors, large law firmsLarge-scale, complexFunds high-stakes commercial disputes over years
Attorney Portfolio FinancingGospel ChoirLaw firms (and indirectly their clients)Medium-to-large scaleProvides stability by funding multiple cases at once

Why These Distinctions Matter

Understanding these distinctions isn’t just an academic exercise—it has real implications for policy, regulation, and public perception. Too often, critics conflate Consumer Legal Funding with Commercial Litigation Financing or assume Attorney Portfolio Financing operates the same way as individual case advances.

But regulating a rock band as if it were an orchestra—or treating a gospel choir as if it were a solo act—would miss the point entirely. Each type of legal funding has its own purpose, structure, and audience.

  • Consumer Legal Funding keeps people afloat in times of crisis.
  • Commercial Litigation Financing enables corporations to fight complex battles on equal footing.
  • Attorney Portfolio Financing stabilizes law firms and expands access to justice.

All three are part of the broader “music” of legal finance, but they are distinct genres with distinct contributions.

Conclusion: Harmony Through Diversity

Music would be dull if every performance sounded the same. The same is true for legal finance. A rock band, a symphony orchestra, and a gospel choir all create music, but their sounds, audiences, and purposes differ dramatically.

Similarly, Consumer Legal Funding, Commercial Litigation Financing, and Attorney Portfolio Financing are all forms of legal finance, but each plays a unique role. Recognizing these differences is crucial for policymakers, industry professionals, and the public.

When we appreciate the rock band, the orchestra, and the choir for what they are, we begin to see the full richness of the legal finance “soundtrack.” Together, they form a diverse ecosystem that, when balanced correctly, ensures both individuals and institutions can pursue justice without being silenced by financial pressure.

Express Legal Funding Re-Ups Ethics Signal With ARC Membership

By John Freund |

Express Legal Funding announced it has reached its fifth year as a member of the Alliance for Responsible Consumer Legal Funding (ARC), underscoring a commitment to best practices in an often-polarized pre-settlement space. For a company that brands itself around transparent pricing and consumer education, the ARC imprimatur doubles as a marketing and compliance asset—especially as statehouses revisit disclosure, APR caps and contract clarity.

An announcement in PR Newswire positions the milestone within a “rapidly growing” lawsuit-cash-advance market. While the release is light on metrics, the message tracks with the broader U.S. consumer-funding narrative: pressure from insurers and tort-reform groups on one side; advocates and funders emphasizing access to liquidity and non-recourse safety on the other.

For plaintiff firms, vendor due diligence remains a reputational imperative; for consumers, independent accreditation—however voluntary—can serve as a quick proxy for baseline standards when shopping funding offers. The strategic subtext is clear: as more states contemplate rules around discoverability, disclosures and rate structures, firms that can point to consistent adherence to codes like ARC’s may enjoy smoother law-firm relationships and fewer regulatory headwinds.

With regulatory skirmishes likely to continue at the state level, recurring membership signals (ARC or otherwise) will matter more.

Editor's Note: An earlier version of this article stated that Express Legal Funding reached its fifth consecutive year as a member of the Alliance for Responsible Consumer Legal Funding. Express Legal Funding reached its fifth year, but not consecutively. We regret the error.

Karyn Cerulli Joins High Rise Financial to Bolster PI Funding

By John Freund |

High Rise Financial has added industry veteran Karyn Cerulli as Regional Vice President of Sales, deepening the Los-Angeles-based funder’s reach into the personal-injury bar. Cerulli spent more than a decade with FindLaw and Thomson Reuters, where she partnered with firms on digital marketing and business-development strategies. In her new role she pivots from lead generation to liquidity, positioning High Rise’s non-recourse advances as a client-care tool for plaintiffs’ firms facing lengthy litigation timelines.

A post on LinkedIn sets out Cerulli’s agenda: hands-on attorney support, a “best rate guarantee,” and white-glove service that places “zero pressure” on case strategy while delivering cash within days. Cerulli frames High Rise as a complement rather than a competitor to existing funders, inviting firms to keep her on standby as a “second option” or safety net when primary partners stall or pricing shifts.

The move comes amid rapid growth for High Rise, which secured a $100 million senior credit facility late last year to expand its pre-settlement portfolio and medical-lien program. The funder touts 24-hour approvals, no credit checks, and repayment only from a successful resolution—features that resonate with Cerulli’s long-time focus on consumer-friendly legal services. With her network of plaintiff-side marketers and case managers, the company hopes to accelerate origination across high-volume auto and premises claims.