Tuesday, February 16, 2021
The exact dollar amount that third-party investors infuse in U.S. lawsuits every year is unknown, but conservative estimates begin around $2.3 billion, with agreement that the industry has room to grow. With the ongoing pandemic stretching litigation timelines and straining budgets, the litigation funding industry remains highly active. Despite the importance of litigation funding to all parties involved (lawyers, plaintiffs, and defendants), regulation varies by state, and litigation funders are largely left to self-regulate.
In the absence of clear direction on this significant issue, the ABA, in August 2020, provided much- needed guidance by adopting Best Practices for Third-Party Litigation Funding.