Opening Up: Private Investors in Litigation Finance

Litigation finance has been growing by billions of dollars thanks to private equity firms, hedge funds, and other institutional investors.  In the United Kingdom, a crowdfunding platform has just recently launched which allows for private investors to join the market as well.  Most litigation financers only take on cases where the claims for damages are big.  Here, private investors are encouraged to invest in smaller claims for damages.

To begin with, litigation financing is where litigation financers provide upfront funding for claimants who cannot afford to fight legal disputes.  In return, these investors seek a share of any settlement or damages.  Due to the nature of lawsuits, returns from litigation finance vary widely.  However, over 70% of investments see positive rewards.

Also, this crowdfunding approach has caught on very quickly elsewhere.  Jay Greenberg, a CEO for a similar, US-based platform adds that cases can be fully funded in less than an hour with the help of private investors.  However, he adds that these investors must invest at least $2,5000 total.  Most of these private investors see a handsome return.

Due to the increasing volume of litigation funding in the United Kingdom, and the popularity of individual litigation financing in the United States, this crowdfunding platform is poised for seemingly instant success.  It will be worth watching and potentially joining if this truly catches on.

Keywords: private, litigation finance, United Kingdom, United States, market

Work Cited:  Barney Thompson, Litigation finance industry Opens Up to Private Investors, Financial Times (August, 23, 2018)