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. In the News Today - September 11, 2019

    September 11, 2019 | News

    Third Party Funders Now Pitching Canadian Start-Ups... Read More

  2. Burford Sued By Shareholders Over Stock Drop

    August 22, 2019 | News

    A class of Burford Capital shareholders has sued the company for allegedly painting a "misleading picture" for investors, Law360 reports.... Read More

  3. Burford Controversy Might "Cool Down The Hype" Around Litigation Funding

    August 15, 2019 | News

    Some legal experts told Law.com the third party litigation funding industry "might not look the same in the aftermath" of the short-selling and accounting controversy that has embroiled industry leader Burford Capital.... Read More

  4. In the News Today - August 13, 2019

    August 13, 2019 | News

    Litigation Funder, Short Seller, Race To Regulator To Urge Probes... Read More

  5. In the News Today - August 12, 2019

    August 12, 2019 | News

    "London's Largest Divorce" Offers New Questions About Litigation Funding... Read More

  6. Litigation Funding Back "In The Spotlight" Thanks To Burford Crisis

    August 09, 2019 | News

    The accusations of misleading accounting facing Burford Capital have "raised broader questions" about the litigation funding industry, the Financial Times writes.... Read More

  7. 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

  8. 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

  9. 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

  10. 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