The Future of Litigation Financing

Alternative litigation financing (“ALF”) has seen dramatic growth in recent years, quadrupling between 2013 and 2016.[i]  Still, “the demand in the legal world is [] much higher than the supply of litigation finance”.[ii]

Several observers have noted that ALF will continue to expand in coming years, not only in volume, but into new areas.  One area set for expansion is the use of ALF by corporate law departments, where companies are increasingly interested in minimizing their litigation costs and risks.[iii]  ALF is also increasingly being used to fund an entire portfolio of cases, for many of the same reasons.

ALF is also being seen as a way to shift away from alternative fee arrangements, which currently may account for 80 or 90 percent of all revenues at many firms.[iv]  ALF provides a funding mechanism for relieving the pressures these fee arrangements place on both attorneys and clients.

Finally, the legal contexts in which ALF is utilized is expanding.  Historically used to fund plaintiffs’ personal injury cases, ALF continues to expand into the areas of appellate litigation, bankruptcy, tax matters, and private equity.[v]  It is also used during the enforcement stage of litigation.[vi]

In the appeals and enforcement context, ALF is recognized as a way to “hedge [against the] downside exposure [] and any further proceedings . . .  at a reasonable price [as well as] provide much needed liquidity” throughout resolution of legal matters.[vii]

For further information, please feel free to contact Roni A. Elias, who leads the litigation finance team at TownCenter Partners, LLC, a boutique litigation funding company that funds plaintiffs and plaintiffs’ law firms nationwide.  TownCenter Partners, LLC is a litigation funder with a social mission and continues to level the playing field in litigation. Mr. Elias can be reached at roni@yourtcp.com or (703) 570-5264. © 2018 Roni A. Elias. All rights reserved.

Topics:  Litigation finance, litigation finance market, third-party funding, alternative litigation finance, trends, enforcement, future, expansion, portfolio financing, bankruptcy, appeals.

[i] New York Law Journal, July 17, 2017, available at https://www.law.com/newyorklawjournal/almID/1202792922820/.

[ii] Mauritius Nagelmueller, “Recent Developments in Litigation Finance (Part 2 of 2)”, Litigation Finance Journal (December 11, 2017), available at https://litigationfinancejournal.com/recent-developments-litigation-finance-part-2-2/.

[iii] Bloomberg, “The Business of Litigation Finance is Booming” (May 30, 2017), available at https://www.bloomberg.com/news/articles/2017-05-30/the-business-of-litigation-finance-is-booming.

[iv] Thompson Reuters/Georgetown Law Center for the Study of the Legal Profession 2017 Report on the State of the Legal Market, available at https://static.legalsolutions.thomsonreuters.com/static/pdf/peer-monitor/S042201-Final.pdf.

[v] New York Law Journal, supra.

[vi] “Recent Developments in Litigation Finance (Part 2 of 2)”, supra.

[vii] Alison Frankel, “Litigation Funding in Bankruptcy ‘Should Be in Every Trustee’s Toolkit”, Reuters (March 14, 2017), available at https://www.reuters.com/article/us-otc-bankruptcy/litigation-funding-in-bankruptcy-should-be-in-every-trustees-toolkit-idUSKBN16L2HJ.

 

TownCenter Partner Team

TownCenter Partners, LLC lead Asset Manager is Mr. Roni A. Elias. From modest beginnings, and with the help of a hand-picked dream team of professionals we have built one of the most dynamic and fastest growing companies in the country. TownCenter Partners LLC(TCP) is a real estate partner and master-planner providing development, leasing, management, and third party services. The company’s demonstrated ability to apply big ideas in creative and innovative ways has played a defining role in the firm’s success. Yet, TCP's most important insight has been the core understanding that it is not sight lines or site plans, but human activity, that defines a space and creates a place.