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Litigation Funders: We’re Unsexy and We Know it!

By Maurice Power |

The following article was contributed by Maurice Power, Chief Executive Officer of Apex Litigation Finance. Apex is an established litigation funder providing bespoke funding solutions to small/mid-size commercial claims in the UK.

The widely reported panel session on litigation funding, at the recent London International Disputes Week, was wide ranging and thought provoking, with several insightful comments from Judge Sara Cockerill, former head of the Commercial Court, and the three senior lawyers who joined her on the panel. 

Mrs Justice Cockerill shared her concerns that whilst “sexy” cases, such as those which can be commoditised (e.g. competition or class action claims) or fit well into a funder’s portfolio, are most likely to be funded, other claims are less likely to be funded.  I think those familiar with the litigation funding market would broadly agree with those sentiments.  However,  contrary to that view, new entrants to the litigation funding market, including Apex Litigation Finance, are increasing the funding options available to litigating parties.  One off mid-sized claims by SMEs, individuals and insolvency practitioners are of interest to certain funders, even if the claims are deemed not to be “sexy”!

Apex was set up specifically to fund mid-sized claims.  One of Apex’s USPs is that we have no minimum funding need, so we are able to offer funding solutions for claims where, for example, only disbursements need funding. For a range of mid-sized claims  a cash injection from a funder can allow a case to proceed when it would otherwise be stymied.  The sort of claims Apex typically fund probably fall outside of the description of “sexy” used in the panel session due to their size and nature.

An SME (as well as individuals and insolvency practitioners), when faced with the reality of funding the costs of litigation, the delaying tactics of defendants, the adverse costs risk exposure and lengths of cases in the Commercial Courts, may simply be unable to afford the risk or cost of pursuing a meritorious case, or may prefer to spread and share some of the risks that come with all litigation in order to access justice. 

There is a gap between the sorts of cases typically brought by an SME and those of interest to the larger high profile funders.  Claims for breach of contract, business interruption cover insurance, professional negligence and shareholder disputes (to name some examples), as well as claims brought in insolvency processes, rarely involve claim values of more than £10m and yet they may not be pursued as many funders are simply not interested in supporting lower value cases. Litigation funding is just as essential in providing access to justice for these sorts of claims, as for the larger claims and class actions.  That funding gap is increasingly being addressed by funders such as Apex, who focus not on the scale of the investment but whether flexible funding, alongside a legal team working on full or partial CFAs, can enable these sorts of claims to be pursued in a cost-effective manner to deliver a decent commercial return to the funded client.

Whilst Apex bases their return on a multiple of funds deployed, as opposed to being paid a percentage of realisations, the impact of the PACCAR case on the wider litigation funding market is not helpful for the promotion of the concept of litigation funding and building confidence in the market.  The Litigation Funding Agreements Bill has been stood down for now, given the pending general election, but it is essential that it is revisited as soon after the election as possible, a sentiment we share with Mrs Justice Cockerill.

Mrs Justice Cockerill accepted that it is not feasible to have a single cap on the costs of funding and called for more transparency so both parties know what they are selling and what they are buying.  Many funders, including Apex, provide a funding facility with the funder’s fee based on a multiple of funds deployed, an approach which should be easily understood by the litigant seeking funding, and thus provides the transparency the litigant needs to calculate the costs.  I personally love a spreadsheet and am happy to set out the likely returns to the client in a series of scenarios, including an early settlement, a successful mediation, a deal done on the Court steps and (usually the worst for all parties) an outcome at trial, with some clearly set out assumptions.

The UK has a rapidly developing litigation funding market which Apex is proud to be an active part of.  That a senior Judge has endorsed the concept of litigation funding is great to hear.  The market would be wise to listen to the issues raised by commentators such as Lady Justice Cockerill, who have a deep understanding of the challenges facing litigating parties, and continue to evolve their approach and offerings to address the needs of as wide a range of litigating parties as possible.  That can and should include the “unsexy” cases.

About the author

Maurice Power

Maurice Power

Commercial

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Sony and Apple Challenge Enforceability of Litigation Funding Models

By John Freund |

A pivotal UK court case could reshape the future of litigation finance agreements, as Sony and Apple reignite legal challenges to widely used third-party funding models in large-scale commercial disputes.

An article in Law360 reports that the two tech giants are questioning the validity of litigation funding arrangements tied to multibillion-pound cartel claims brought against them. Their core argument: that certain litigation funding agreements may run afoul of UK laws governing damages-based agreements (DBAs), which restrict the share of damages a representative may take as remuneration. A previous Court of Appeal decision in PACCAR Inc. v. Competition Appeal Tribunal held that some funding models might qualify as DBAs, rendering them unenforceable if they fail to comply with statutory rules.

This resurrected dispute centers on claims brought by class representatives against Apple and Sony over alleged anti-competitive behavior. The companies argue that if the funding arrangements breach DBA regulations, the entire claims may be invalidated. For the litigation funding industry, the outcome could severely curtail access to justice mechanisms in the UK—especially for collective actions in competition law, where third-party financing is often essential.

The UK’s Competition Appeal Tribunal previously stayed the proceedings pending clarity on the legal standing of such funding arrangements. With the dispute now heading back to court, all eyes will be on whether the judiciary draws a clear line around the enforceability of funder agreements under current law.

The decision could force funders to rework deal structures or risk losing enforceability altogether. As UK courts revisit the DBA implications for litigation finance, the sector faces heightened uncertainty over regulatory compliance, enforceability, and long-term viability in complex group litigation. Will this lead to a redefinition of permissible funding models—or to a call for legislative reform to protect access to collective redress?

Funder’s Interference in Texas Fee Dispute Rejected by Appeals Court

By Harry Moran |

A Texas appeals court has ruled that a litigation funder cannot block attorneys from pursuing a fee dispute following a remand order, reinforcing the limited standing of funders in fee-shifting battles. In a 2-1 decision, the First Court of Appeals found that the funder’s interest in the outcome, while financial, did not confer the legal authority necessary to participate in the dispute or enforce a side agreement aimed at halting the proceedings.

An article in Law360 details the underlying case, which stems from a contentious attorney fee battle following a remand to state court. The litigation funder, asserting contractual rights tied to a funding agreement, attempted to intervene and stop the fee litigation between plaintiffs' and defense counsel. But the appellate court sided with the trial court’s decision to proceed, emphasizing that only parties directly involved in the underlying legal work—and not third-party financiers—are entitled to challenge or control post-remand fee determinations. The majority opinion concluded that the funder’s contract could not supersede procedural law governing who may participate in such disputes.

In dissent, one justice argued that the funder’s financial interest merited consideration, suggesting that a more expansive view of standing could be warranted. But the majority held firm, stating that expanding standing would invite unwanted complexity and undermine judicial efficiency.

This decision sends a strong signal to funders operating in Texas: fee rights must be contractually precise and procedurally valid. As more funders build fee recovery provisions into their agreements, questions linger about how far those rights can extend—especially in jurisdictions hesitant to allow funders a seat at the litigation table.

Oklahoma Moves to Restrict Foreign Litigation Funding, Cap Damages

By John Freund |

In a significant policy shift, Oklahoma has enacted legislation targeting foreign influence in its judicial system through third-party litigation funding. Signed into law by Governor Kevin Stitt, the two-pronged legislation not only prohibits foreign entities from funding lawsuits in the state but also imposes a $500,000 cap on non-economic damages in civil cases—excluding exceptions such as wrongful death. The new laws take effect November 1, 2025.

An article in The Journal Record notes that proponents of the legislation, including the Oklahoma Civil Justice Council and key Republican lawmakers, argue these measures are necessary to preserve the integrity of the state's courts and protect domestic businesses from what they view as undue interference. The foreign funding restriction applies to entities from countries identified as foreign adversaries by federal standards, including China and Russia.

Critics, however, contend that the laws may undermine access to justice, especially in complex or high-cost litigation where third-party funding can serve as a vital resource. The cap on non-economic damages, in particular, has drawn concern from trial lawyers who argue it may disproportionately impact vulnerable plaintiffs without sufficient financial means.

Oklahoma’s move aligns with a broader national trend of state-level scrutiny over third-party litigation funding. Lawmakers in several states have introduced or passed legislation to increase transparency, impose registration requirements, or limit funding sources.

For the legal funding industry, the Oklahoma law raises pressing questions about how funders will adapt to an increasingly fragmented regulatory landscape. It also underscores the growing political sensitivity around foreign capital in civil litigation—a trend that could prompt further regulatory action across other jurisdictions.