More States Pushing Back On Third-Party Litigation Funding

Litigation funding, or the third-party financing of plaintiffs' lawsuits, has become a multibillion-dollar industry in the United States, and it continues to grow. Unfortunately, state and federal regulations have not kept pace, despite the desire among the vast majority of Americans for increased regulations due to various problems with these dark-money investments. Recently, however, the industry has received greater publicity and scrutiny, and more states are starting to take action toward passing regulations to address some of these issues.

State of Litigation Funding

Litigation funding is a third party's financing of a plaintiff's lawsuit, and it has become big business in the United States. A number of large companies have formed a focus exclusively on funding such lawsuits, essentially betting on the outcome by determining what the suit is worth and providing a loan to the plaintiff in a certain amount and for a certain percentage based on that