What Is the Outlook for Litigation Finance?

Litigation finance is a fast-growing asset class with expanding institutional adoption. Increasing regulatory clarity, wider attorney acceptance, and growing capital market interest are all shaping the sector's trajectory.

Litigation finance has grown substantially over the past decade and continues to expand. The market encompasses consumer pre-settlement funding (plaintiff-facing), commercial litigation finance (law firm and portfolio-facing), and institutional arbitration and appellate finance. Across all segments, total deployed capital has grown from an estimated $1 billion a decade ago to well over $10 billion today, with continued growth expected.

Several structural drivers are sustaining this growth. Law firms facing compressed margins and rising case costs need capital to pursue large, complex litigation without depleting operating resources. Corporate defendants are increasingly sophisticated about duration management, pushing cases to later stages. And institutional investors — hedge funds, family offices, and dedicated litigation finance vehicles — are attracted to the uncorrelated return profile of legal assets.

Consumer pre-settlement funding has also benefited from growing regulatory clarity. More than a dozen states have enacted specific litigation funding statutes over the past decade, providing a clearer legal framework for funders and stronger consumer protections for plaintiffs. This regulatory maturation is gradually eliminating the uncertainty that restricted market development in earlier years.

Attorney acceptance has also increased significantly. ABA Formal Opinion 484 (2019) provided comprehensive guidance on attorney obligations when clients use litigation funding, resolving many of the ethical questions that caused attorney hesitation in earlier years. The combination of clearer ethics guidance and demonstrated product utility has made attorney cooperation more consistent.

Source: Litigation Finance Journal. Burford Capital Annual Report 2024. Bloomberg Law Litigation Finance Survey 2025.

Need pre-settlement funding?