Third-Party Litigation Funding Revolutionizing Commercial Litigation, Despite Some Challenges In Common Law

One of the most critical developments in civil – and potentially, commercial – litigation in recent years has been the growth of third-party financing of legal costs for cases that might not otherwise have their day in court. Originating in Australia and the UK more than a decade ago, third-party litigation funding agreements (LFAs), in which institutions offer financing for a percentage of any monetary recovery in the case, are enabling plaintiffs to seek justice through court actions that otherwise would be cost-prohibitive. This includes fraud, environmental, and corporate cases worldwide.

Several recent news events illustrate the dramatic paradigm shift that third-party funding can bring even to complex commercial litigation, where the parties typically bear preemptive upfront costs just to determine the merits of mounting a case.