The market for litigation finance shows no signs of slowing down, but pressure from rulemaking bodies and the judiciary may reshape whether and to what extent funding arrangements must be publicly disclosed. The use of litigation finance to fund claims that may not otherwise have been pursued or as a risk management strategy has continued to expand in recent years. For much of its history, parties were not required to disclose whether they were receiving litigation financing or the source of such funding, however the recent trend is toward increased transparency into funding arrangements.
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Defense Funding: The Next Frontier for Litigation Financing
By Brian A. Hooven on
Litigation funders are well aware that half of the potential market is largely untapped. Clients would prefer to focus on their business rather than litigation, and offload some or all of their defense costs to a third-party. Law firms want the fee flexibility that defense-side funding could provide.
So why is defense funding still the exception rather than the rule? To begin with, because the synergies that propel plaintiff-side funding are much more difficult to capture on the defense side.