Who Uses Litigation Funding?

Litigation funding is used by injured plaintiffs, law firms, corporations, and institutional investors. Each group accesses the market for different reasons, through different product structures.

Individual plaintiffs use pre-settlement funding to cover living expenses and medical bills during litigation — particularly when injury or disability has reduced their income. The typical plaintiff-facing product is a non-recourse cash advance of $1,000 to $250,000, secured by the expected settlement. Plaintiffs who cannot afford to wait years for their case to resolve benefit most.

Law firms use litigation finance to fund case costs — expert witnesses, depositions, medical records, filing fees — without depleting operating capital. Law firms handling contingency cases front all expenses and recover them only when cases settle or reach verdict. Capital lines and case-cost financing allow firms to pursue larger, more complex cases without being constrained by cash flow.

Corporations use litigation finance to pursue commercial claims — antitrust, patent, breach of contract, fraud — that would otherwise be too expensive relative to operational priorities. A company with a strong breach-of-contract claim may nonetheless decline to pursue it if litigation costs are too high. Third-party funding shifts those costs to the funder in exchange for a portion of any recovery.

Institutional investors — hedge funds, sovereign wealth funds, endowments, and dedicated litigation finance vehicles — access the market through investment in litigation finance funds or direct co-investment in individual cases or portfolios. Legal outcomes are largely uncorrelated with traditional financial markets, making litigation finance attractive as a diversification asset.

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

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