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

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All Results for Third Party Litigation Funding (TPLF)

  1. Short-seller Alleges Enron-esque Accounting Practices at Industry-Leading Litigation Funder

    August 08, 2019 | News

    Burford Capital, the largest player in the litigation funding industry, is scrambling to respond to short-seller Muddy Waters' scathing report from earlier this week. The report alleges "Enron-esque" accounting practices at Burford, including incomplete portrayals of the value of ongoing funded litigation that did not account for "potentially recovery-killing" developments in the cases concerned, Bloomberg Law reports.... Read More

  2. Short-Seller Says Litigation Funding Giant Overstates Investment Returns

    August 07, 2019 | News

    Short-seller Muddy Waters said Burford Capital, a third party litigation funding industry giant, has been overstating its investment returns and has questionable reporting and governance practices, Bloomberg reports.... Read More

  3. In the News Today - July 31, 2019

    July 31, 2019 | News

    Litigation Funder Sues Firm It Hired To Investigate Plaintiffs' Lawyer It Was Also Taking Action Against; Florida-Backed Insurer Finalizes Rate Increases, Which Show "Significant Reductions" After AOB Law... Read More

  4. In the News Today - July 22, 2019

    July 22, 2019 | News

    Australian Corporation Argues Funding Deal Gives Too Much Control To Funders; California Assemblyman Says Decision To Take Labels Off Coffee Was "Right"... Read More

  5. In the News Today - July 8, 2019

    July 08, 2019 | News

    Louisiana Tort Laws "Encourage Claims And Litigation," Insurer Association CEO; For Funders And Plaintiffs' Lawyers, It's "Game On" In Australia... Read More

  6. In The News Today - July 2, 2019

    July 02, 2019 | Blogs

    GDPR "Holding European Businesses Back," Data Think Tank Analyst Says; TPLF Driving Growth of Australian Class Actions... Read More

  7. In the News Today - July 1, 2019

    July 02, 2019 | News

    New Zealand Law Commission to Review TPLF; Securities Lawsuit Filings Continue to Rise... Read More

  8. In The News Today - June 26, 2019

    June 26, 2019 | News

    Harvard Now Investing In Litigation... Read More

  9. In the News Today - June 7, 2019

    June 07, 2019 | News

    NYC Bar Won't Make TPLF Comments Public... Read More

  10. ILR: NYC Bar Shouldn't "Immunize" Unethical TPLF Deals

    June 05, 2019 | News

    The U.S. Chamber Institute for Legal Reform (ILR) urged the New York City Bar Association not to "immunize" third party litigation funding as it explores whether or not the practice violates the organization's ethical guidelines on fee splitting.... Read More