The U.S. commercial litigation finance market posted a notable recovery in 2025, with new capital commitments climbing approximately 23% year-over-year to $2.8 billion across 346 new deals, according to the seventh annual Westfleet Insider report.

As reported by Westfleet Advisors, the rebound follows two consecutive years of contraction — commitments had slipped from $2.7 billion in 2023 to $2.3 billion in 2024 — and signals renewed deployment activity after a period of broad market retrenchment.

Despite the headline recovery, the data paints a nuanced picture. The uptick was driven by incremental deployment among a small cohort of established funders rather than any broad-based expansion of available capital. Of the 39 funders identified as active in the U.S. commercial market, a notable subset deployed little to no new capital during the reporting period, and only one new entrant emerged. Several funders are actively winding down operations, pointing to a quiet but ongoing consolidation across the industry.

Deal economics remained largely stable. The average transaction size held steady at approximately $8.1 million overall, though the composition shifted meaningfully: single-matter deals contracted to $4.5 million from $6.6 million the prior year, while portfolio transactions expanded to $19.6 million from $16.5 million. Portfolio structures continued to dominate, representing 64% of new commitments.

One of the more significant structural shifts in 2025 was the decline in Big Law utilization, with the share of total commitments directed to the 200 largest U.S. firms dropping to 24% from 37% in 2024. Client-directed deals edged ahead of firm-directed arrangements for the first time in recent years, representing 52% of commitments.

Other notable findings include patent litigation accounting for 27% of funded matters, contingent risk insurance coverage ticking up to 21% of deals, and claim monetization declining to 17% of new commitments from 26% in 2024.

The reinsurance industry is adding its voice to growing calls for a unified regulatory framework for third-party litigation funding across Europe.

As reported by Gen Re, the European litigation funding market now includes more than 300 funders operating with limited transparency and fragmented oversight across EU member states. The publication highlights a significant regulatory gap, with most countries allowing TPLF under general contract law while lacking specific rules around disclosure, conflicts of interest, or funder control over litigation strategy.

The Netherlands and Germany lead Europe as the most developed markets, while Ireland still prohibits outside litigation funding under common law. France, Spain, and Portugal have introduced or are considering consumer-focused legislation, but no harmonized EU-wide framework exists.

Insurance Europe and the Reinsurance Advisory Board have both called for regulation at the EU level, arguing it is necessary to maintain trust in the justice and financial systems. Their primary concerns include a lack of transparency about funding arrangements, potential conflicts of interest, rising litigation costs, and insufficient investor oversight.

Proponents of the industry counter that professional funders improve access to justice for under-resourced claimants and help filter out weak claims through rigorous due diligence. A cross-sector group of business associations issued a joint statement in January 2026 renewing their call for proportionate, harmonized EU-level rules.