COVID-19 and Litigation Finance
Despite the growth that the litigation finance industry has experienced throughout these few years, like nearly every other aspect of life, it has been affected by the COVID-19 pandemic. The question now is not whether future litigation finance has been impacted by the pandemic, but rather how the pandemic will influence the sector. The full extent of the pandemic’s impact remains unknown. However, the litigation finance industry’s response will pave the way for the future.
The Bad:
- The pandemic and following financial decline will leave permanent consequences on the legal industry and the global economy.
- Practice areas that are associated with the market are more adversely affected.
- The desire for financial risk is unquestionably lower.
The Good:
- Litigation finance is intended to help mitigate the financial risk of litigation.
- There will be increased litigation associated with the crisis.
- The lack of traditional funding creates a role for litigation finance firms to fill.
Overall, more prominent companies with established pools of capital are better equipped. Smaller funders are still able to benefit from litigation claims arising out of the crisis. Ultimately, the value of litigation claims is not directly related to the market.
Topics: Litigation Finance, COVID-19, Litigation
Works Cited:
Annie Pavia, ANALYSIS: Litigation Finance Ready for Post-Covid Challenges, Bloomberg Law,
May 18, 2020, https://news.bloomberglaw.com/bloomberg-law-analysis/analysis-litigation-finance-ready-for-post-covid-challenges (last visited May 23, 2020).
