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The UK legal profession is bracing for sweeping regulatory changes after the government announced plans to transfer anti-money laundering (AML) supervision of lawyers and accountants to the Financial Conduct Authority (FCA).

An article in Legal Futures details the surprise decision, which has sparked widespread criticism from legal regulators including the Solicitors Regulation Authority (SRA), the Council for Licensed Conveyancers (CLC), and the Law Society. SRA Chief Executive Paul Philip, speaking at the regulator’s compliance conference, described the change as “very different” from existing oversight, warning that the FCA’s rules-based approach could upend how legal firms manage AML compliance. SRA Chair Anna Bradley echoed this sentiment, highlighting the potential for friction in adapting to the FCA's framework.

Currently employing 30 AML specialists, the SRA may redirect those resources elsewhere, but clarity remains lacking on how the FCA will structure and fund its expanded mandate. Law Society President Mark Evans cautioned that the move could raise compliance costs and create a burdensome dual-regulation environment, sentiments echoed by the CLC and the Law Society of Scotland.

The FCA, for its part, says the consolidation will streamline AML oversight and bolster enforcement capabilities. However, several experts—including former SRA AML director Colette Best and compliance professionals across the sector—warn that the FCA’s unfamiliarity with legal practice, possible under-resourcing, and the need for new legislation may delay implementation and sow confusion.

While anti-corruption advocates like Spotlight on Corruption welcomed the move, calling it a long-overdue shakeup, industry voices argue the transition must be carefully managed to avoid disrupting one of the UK’s most respected professions.

For litigation funders, the development underscores a trend toward stronger centralized oversight in areas intersecting with financial crime enforcement. Questions remain over how the FCA’s broader enforcement style might influence law firms—and by extension, the funders who work with them.

William Weisman of Parabellum Capital uses a football metaphor to dismantle claims that commercial litigation funders wield excessive influence over the U.S. legal system. Opponents—like the Chamber of Commerce and Lawyers for Civil Justice—portray funders as shadowy power brokers manipulating outcomes. In reality, Weisman argues, the industry is tiny.

Writing in the National Law Review, Weisman notes that U.S. commercial litigation funding represents just $2.3 billion in annual commitments, with only about $759 million going directly to litigants. The workforce across roughly 33 funders totals only 337 people, over half of whom work at firms with five or fewer employees. Burford Capital alone accounts for about 20% of that headcount.

Of those 337 employees, only 204 hold law degrees, and most are focused on origination or operations—not trial oversight. Roughly 80% of funders employ fewer than 10 lawyers, making it implausible that they could “quarterback” litigation. Compared to the 1.3 million U.S. lawyers, 450,000 law firms, and 85,000 attorneys at Am Law 100 firms, the entire funding sector barely registers in size. Even individual corporate law departments often employ more attorneys than all U.S. funders combined.

Weisman concludes that funders aren’t calling plays—they’re providing capital to level the field for smaller businesses that couldn’t otherwise litigate against deep-pocketed opponents. Allegations of undue influence, he writes, are a strategic “ball fake” meant to preserve the advantage of entrenched corporate interests.

A sharp pivot is underway in litigation finance as funders increasingly court the private credit market amid waning interest from traditional backers.

An article in Law Gazette details how funders, faced with reduced appetite from pension and endowment funds due to rising interest rates and macroeconomic volatility, are now tapping into the $1.7 trillion private credit sector—comprising non-bank lenders known for backing complex, high-yield opportunities. At Brown Rudnick’s European litigation funding conference last week, executives from Rocade, Therium, and others dissected the sector’s evolving funding landscape.

Brian Roth, CEO of Rocade LLC, emphasized that litigation finance offers the kind of complexity private credit thrives on. “We’re looking for assets that are complex or hard to source… [that offer] a ‘complexity premium,’” Roth said, adding that insurance-wrapped and yield-segmented portfolios could make the space even more appealing to credit investors.

Therium Capital Management co-founder Neil Purslow—whose flagship fund is now in runoff—recently launched Therium Capital Advisors to help bridge the gap between funders and private credit. Purslow noted that while capital is plentiful, accessing it requires sophisticated structuring to meet private lenders’ expectations. “It’s very bespoke,” he said. “This pool of investors… think very specifically about their strategy.”

Not all industry voices are convinced. Soryn IP’s Michael Gulliford warned that litigation finance must deliver returns consistent with private credit norms, or risk being shunned. Meanwhile, Balance Legal Capital’s Robert Rothkopf and Harbour Litigation Funding’s Susan Dunn raised alarms over new players using questionable financial structures and attracting inexperienced investors.

The shift toward private credit could redefine how litigation finance structures deals, raises capital, and manages risk. But the influx of new money—especially if poorly vetted—may also invite instability. As private credit steps into the void, funders must weigh innovation against the risk of diluting industry standards.

The London‑based asset manager Yield Bridge Asset Management (Yield Bridge) has announced its entry into the litigation financing arena, marking a strategic shift into the private‑credit sector of the legal‑funding landscape.

According to a press release in OpenPR, Yield Bridge has entered into several strategic partnerships in the international arbitration space, granting the firm ongoing access to “vetted, insurance‑wrapped Litigation and Private Credit asset programs.”

In detailing the strategy, Yield Bridge highlights litigation finance as a rapidly growing asset class. The release states that high costs in international arbitration often create an uneven battlefield—where financial strength outweighs merits. Litigation funding, the firm argues, offers a counterbalance. It points to “Litigation Finance Bonds” as their preferred investment vehicle—emphasizing 100% capital protection, attractive yields, and short-duration liquidity windows for accredited investors. The firm claims to target structured portfolios of multiple claims (versus single-case investments) to diversify risk and leverage economies of scale. Cases “displaying pre‑determined characteristics and a potential 8–10× multiple” are cited as typical targets.

Yield Bridge positions itself as a “leading international financial services intermediary … bringing together multi‑asset expertise with targeted investment propositions.” While the announcement is light on detailed track record or specific claim‑portfolios, the firm is formally signalling its ambitions in the litigation finance space.

Yield Bridge’s pivot underscores a broader trend: litigation finance moving deeper into structured, institutional‑grade private‑credit models. By packaging multiple claims and targeting returns familiar in alternative‑credit strategies, firms like Yield Bridge are raising the bar—and potentially the competition—for players in the legal‑funding ecosystem. This development raises questions about how deal flow will scale, how returns will be verified, and how risk will be managed in portfolio‑based litigation funding.

In a significant development for UK collective actions, the Competition Appeal Tribunal (CAT) has granted a Collective Proceedings Order (CPO) in the landmark case Spottiswoode v Airwave Solutions & Motorola. The case—brought by Clare Spottiswoode CBE—accuses Motorola of abusing its dominant position in the UK's emergency services network by charging excessive prices through its Airwave network, which the Home Office claims resulted in £1.1 billion in overcharges to UK taxpayers.

According to iclg, the class action is being funded by the UK Home Office itself, which is also the complainant in an associated CMA enforcement action. In its judgment, the CAT concluded that Spottiswoode is an appropriate class representative, and that the claim—which covers a proposed class of over 100,000 public service bodies—is suitable for collective proceedings. The case will proceed on an opt-out basis for UK entities, with opt-in available for overseas claimants.

The Tribunal emphasized that funding by a government department does not compromise the independence of the class representative, and that the Home Office’s funding arrangement complies with legal and procedural requirements. Notably, the judgment paves the way for governmental entities to play a dual role—as both complainant and funder—in future competition-based collective actions.

This case raises fascinating implications for the legal funding industry. It challenges traditional notions of third-party funders and opens the door to more creative and strategic funding models initiated by government entities themselves, particularly in cases with broad public interest and regulatory overlap.

A notable shift is underway in the legal‑services world as institutional investors increasingly direct capital toward law‑firm ownership—particularly via the alternative business structure (ABS) model in Arizona.

According to a recent article in Bloomberg, large asset managers and venture‑capital firms are positioning themselves to participate in legal‑services revenues in a way that diverges from traditional contingent‑fee funding of lawsuits. The piece identifies heavy hitters such as Benefit Street Partners and Crossbeam Venture Partners as recent entrants into the ABS‑enabled law‑firm ownership space. Benefit Street’s application for a new Arizona law‑firm entity lists tort litigation, IP claims and bankruptcy matters as focal areas.

The ABS pathway in Arizona has grown rapidly. In 2021, the state approved 15 ABS licences; by 2024, that number rose to 51, bringing the overall total to approximately 153. The regulatory flexibility in Arizona contrasts with the majority of U.S. jurisdictions, where non‑lawyer ownership of law firms remains prohibited or severely constrained. Meanwhile, states such as California have reacted by imposing restrictions—e.g., California's recent ban on contingency‑fee sharing with out‑of‑state ABS models.

For the legal‑funding and law‑firm investment ecosystem, this development carries multiple implications. First, it signals that investors view law‑firm ownership as a viable risk‑adjusted investment category beyond pure litigation funding. Second, it raises governance and regulatory questions around outside ownership of law firms, especially as the lines blur between funders, back‑office providers and equity owners. Finally, firms, funders and law‑firm owners may need to reassess their strategies and compliance frameworks in light of the shifting landscape of capital entry and structural innovation.

A new California law—Assembly Bill 931, signed by Governor Gavin Newsom—prohibits California‐licensed attorneys and law firms from entering into contingent‐fee sharing arrangements with out‑of‑state “alternative business structures” (ABS) or law firms owned, in whole or in part, by non‑lawyers.

According to Reuters, the law targets a key business model of mass‑tort and personal‑injury practices, where fee revenue is shared with non‑lawyer entities or firms located in jurisdictions that permit non‑lawyer ownership or alternative legal structures (such as Arizona, Utah, Puerto Rico and the District of Columbia). The law was narrowed during legislative debate to apply specifically to contingent fees rather than flat‑fee or fixed‑fee arrangements.

Under the statute, contracts beginning on or after January 1, 2026, that violate the prohibition will expose the California lawyer or law firm to minimum fines of $10,000 per infraction. The legislation expressly allows fixed‑fee sharing for specific dollar amounts and non‑lawyer involvement in back‑office or support services, but draws the line at traditional contingency‑fee tying arrangements with ABS entities.

For the litigation finance industry, this legislative shift signals a tightening of rules around fee‑sharing and ownership arrangements, particularly for cross‑jurisdictional structures that rely on non‑lawyer capital. The change may hamper integration between California‑based counsel and out‑of‑state firms that depend on contingency‐driven revenue sharing.