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ARTICLE · 22 JANUARY 2025

Hot On The Money Trail

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Litigation funding is a burgeoning multibillion-dollar industry that has disrupted the insurance and legal industries.

United StatesLitigation, Mediation & Arbitration
Maryan Alexander
Maryan Alexander
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Litigation funding is a burgeoning multibillion-dollar industry that has disrupted the insurance and legal industries. Third-party litigation funding (TPLF) is a practice in which independent parties, typically hedge funds or investment firms, provide non-recourse financial support to assist plaintiffs pursuing litigation in exchange for a sizeable portion of any settlement or verdict.

This arrangement allows litigation funders to collaborate with plaintiffs' lawyers as to litigation strategy. The entire practice operates largely in secret and there is little transparency. The use of TPLF arrangements in several high-profile litigation matters—such as Hulk Hogan's lawsuit against Gawker, the NFL concussion cases, and #MeToo claims—gained a great deal of media attention, thereby exposing many aspects of these furtive TPLF practices. With that, numerous concerns regarding the practice have emerged.

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