Third Party Litigation Funding (TPLF)

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Third party litigation funding (TPLF) is the practice of hedge funds and other financiers investing in lawsuits in exchange for a percentage of any settlement or judgment. TPLF is a global industry with approximately $100 billion available to funders and firms. The practice, while lucrative for those betting on cases, increases the probability that meritless claims will be brought, inserts questions about who is actually controlling the litigation other than the plaintiff and defendant, and makes settling lawsuits far more difficult and expensive. Even the funders admit they deliberately complicate litigation. Allison Chock, Chief Investment Officer at Bentham IMF (one of the world’s largest litigation funders) stated, “We make it harder and more expensive to settle cases,” highlighting TPLF’s distortion of our civil justice system. The U.S. Chamber Institute for Legal Reform (ILR) works to bring TPLF, which threatens to undermine long accepted norms in our judicial system, out of the shadows. Read More...

Unlike other financial products, TPLF is largely unregulated around the world. The practice operates in secret, making it difficult for judges and parties to know who actually has an interest in the outcome of the litigation. TPLF also presents various ethical issues, particularly when a funder is directly financing a law firm or lawyer and cutting claimants out of certain significant litigation decisions.

On multiple occasions, ILR has urged the federal Committee on Rules of Practice and Procedure and Advisory Rules Committees to adopt a disclosure rule to bring a degree of transparency to TPLF. Recently, ILR led a coalition of 30 business and legal organizations in sending a letter the Committee debunking the funders’ arguments against disclosure and transparency.

ILR believes TPLF, like other outside interests in litigation, should be subject to reasonable transparency standards.

01/01/2019

Suggested Resources

Research
  • ILR Briefly COVID-19 Series: State Liability Problems and Solutions

    ILR Briefly COVID-19 Series: State Liability Problems and Solutions

    May 21, 2020

    As states reopen and continue to respond to the needs of their citizens and economies, it is important that they consider offering liability protections to prevent a wave of COVID-19 lawsuits at the state level. This edition of ILR Briefly documents major hot spots for COVID-19 litigation under state law and provides an array of policy solutions to prevent lawsuits from disrupting states' economic recoveries. Read More

  • ILR Briefly COVID-19 Series: Liability Overview

    ILR Briefly COVID-19 Series: Liability Overview

    April 23, 2020

    As Americans and businesses of all sizes are working together to get through the COVID-19 health crisis, plaintiffs' lawyers have already begun filing COVID-19-related lawsuits. Limiting litigation abuse is essential to making available the tools and resources needed to combat the virus, and ultimately to spurring economic recovery once the immediate health crisis has been resolved. This edition of ILR Briefly explores the current and anticipated types of litigation coming out of the COVID-19 pandemic. Read More

All Results for Third Party Litigation Funding (TPLF)

  1. Litigation Funder Gave $100K To Plaintiff, Expects $2 Million Back

    July 02, 2020 | News

    A lawsuit in New York shows what happens when a litigation funder's client hits a jackpot and decides not to settle up, according to a report in Legal Newsline. ... Read More

  2. ILR Research Review Volume 7 Issue 1

    June 29, 2020 | Research

    This edition of the ILR Research Review contains research examining the myriad liability challenges flowing from COVID-19 and describing potential administrative and legislative solutions, as well as papers dedicated to the ongoing crisis in securities litigation, the growth of and problems with the third party litigation funding industry, and insights into the strategy behind trial lawyer advertising.... Read More

  3. From the President's Desk: International Litigation Trends Taking Center Stage Across the Globe

    June 08, 2020 | News

    In his most recent blog post, ILR President Harold Kim highlights some major international developments that could have an impact on the business community, notably in the United Kingdom and Australia.... Read More

  4. ILR Briefly COVID-19 Series: State Liability Problems and Solutions

    May 21, 2020 | Research

    As states reopen and continue to respond to the needs of their citizens and economies, it is important that they consider offering liability protections to prevent a wave of COVID-19 lawsuits at the state level. This edition of ILR Briefly documents major hot spots for COVID-19 litigation under state law and provides an array of policy solutions to prevent lawsuits from disrupting states' economic recoveries.... Read More

  5. ILR Briefly COVID-19 Series: Liability Overview

    April 23, 2020 | Research

    As Americans and businesses of all sizes are working together to get through the COVID-19 health crisis, plaintiffs' lawyers have already begun filing COVID-19-related lawsuits. Limiting litigation abuse is essential to making available the tools and resources needed to combat the virus, and ultimately to spurring economic recovery once the immediate health crisis has been resolved. This edition of ILR Briefly explores the current and anticipated types of litigation coming out of the COVID-19 pandemic.... Read More

  6. In The News today - April 9, 2020

    April 09, 2020 | News

    Third-Party Litigation Funders' Business Is Booming During Pandemic... Read More

  7. In the News Today -March 20, 2020

    March 20, 2020 | News

    Oklahoma Senate Votes to Put a Cap on Non-Economic Damages and TPLF Deal Raises Ethical Red Flags.... Read More

  8. In the News Today -March 11, 2020

    March 11, 2020 | News

    ILR Urges DC Bar to Reject Rules That Could Expand TPLF... Read More

  9. ILR Urges DC Bar to Reject New Rules That Could Expand TPLF

    March 10, 2020 | Blogs

    The U.S. Chamber Institute for Legal Reform (ILR), and three other associations, strongly urged the District of Columbia Bar Association to reject a proposed rule change that would further the influence of third party litigation funding (TPLF) in the District's legal system.... Read More

  10. In the News Today - March 6, 2020

    March 06, 2020 | News

    Bloomberg Law's 2019 Litigation Finance Industry Survey revealed that lawyers who are interested in litigation financing are more likely to obtain funding for a single case than for a portfolio of cases.... Read More