The global litigation funding investment market was US$ 14.5 Bn in 2021 and is expected to witness a growth rate of around 9% during the forecast period of 2022-2028. Litigation finance encompasses any transaction in which a legal claim is used as collateral to secure financing from an outside party. The financing party (or funder) provides capital to the claimant in exchange for an interest in the outcome of the case. Financing is usually provided on a non-recourse basis, meaning that the funder receives a return only if the case is successfully settled or results in a collected judgment. If the case is unsuccessful, the claimant has no obligation to repay the funder.
The market is growing as a result of the claimants’ increasing demand for litigation finance, which is driven by the increase in legal fees, as well as the desire of both people and organizations to use litigation investment as a means of generating money. Investors and companies alike are becoming more and more interested in litigation financing, which is also creating new investment opportunities.
The expanding demand for new and advanced sources of legal funding, commercial litigations, and individual consumer plaintiffs growing as a result of increasing costs and duration of litigation, coupled with the risk of receiving zero or negative returns. Usage of the same is expected to keep growing as law firms that have yet to use litigation funding anticipate doing so in the upcoming years. Along with developments like rising attorney advertising and investments in data and analytics, law firms’ need for finance is expanding.
Additionally, law firms are spending more money on individual cases, allocating funds for things like discovery, jury selection, and mock trials. Demand for money is also being fueled by the expansion of mass tort claims, which demand a huge financial commitment from plaintiffs’ attorneys.
North America constitutes a huge market share in the global litigation investment market
Geographically, North America holds the largest market share in the global litigation investment market. The expansion of the market is attributed to the favorable regulatory environment for lawsuit funding, as well as the existence of top litigation funders who provide effective software and a wide range of cutting-edge services for litigation funding. The market is expected to grow in the region over the next few years as a result of a growing portfolio of litigation funding or portfolio finance trends among investors and rising end-user demand for litigation funding investments, including those in the BFSI, media & entertainment, IT & telecommunication, and other sectors.
Market Structure and Competitive Landscape
The global litigation funding investment market is characterized by the presence of various players operating in the market. Some of the prominent players that contribute significantly to the global litigation funding investment market include Parabellum Capital, Bentham Capital, Juridica Brickell Key, Burford Capital LLC, Woodford Litigation Funding Ltd, Apex Litigation Finance, Omni Bridgeway, Vannin, Augusta Ventures, Longford Capital Management LP, Calunius Capital, Harbour Litigation Funding Ltd, and Others.
These players adopt various strategies to reinforce their market share and gain a competitive edge over other competitors in the market. Mergers and acquisitions, product launches, Partnerships, and collaborations are some of the strategies followed by industry players. Some of the key developments in the Global Litigation Funding Investment Market include,
- In Jan 2022, Fintech start-up LegalPay has launched an interim finance healthcare-focused fund for retail investors where they can participate by investing a minimum of INR 10,000 per opportunity in asset-backed legal and debt financing asset classes through fractional ownership. LegalPay targets mid-market companies, including MSMEs, undergoing insolvencies, requiring INR 1 Mn – INR 50 Mn.
- In July 2022, The London-based claimant law firm taking on mining giant BHP in a £5 Bn suit is set to receive an extra £100 Mn in funding from investment firm North Wall Capital. The move marks a significant expansion in the funding relationship between North Wall, a self-described ‘special situations’ investor, and PGMBM, which has brought group cases against a number of major corporations including Volkswagen, British Airways, and Bayer court.
Key Market Segmentation
RationalStat has segmented the global Litigation Funding Investment market based on type, enterprise size, end user, and region.
- By Type
- Commercial Litigation
- International Arbitration
- Bankruptcy Claim
- Personal Injury
- By Enterprise Size
- Micro, Small, and Medium Enterprises (MSMEs)
- Large enterprises
- By End User
- Banking, Financial Services, and Insurance Sector (BFSI)
- IT & Telecommunication
- Media & Entertainment
- Others (Travel & Hospitality)
- By Region
- North America
- Latin America
- Rest of Latin America
- Western Europe
- Rest of Western Europe
- Eastern Europe
- Rest of Eastern Europe
- Asia Pacific
- South Korea
- ASEAN (Indonesia, Vietnam, Malaysia, etc.)
- Rest of Asia Pacific
- Middle East & Africa
- South Africa
- Rest of the Middle East & Africa
- North America
RationalStat has developed a state-of-the-art research methodology to crunch numbers and provide the best possible real-time insights to clients. We combine a varied range of industry experience, data analytics, and experts’ viewpoint to create a research methodology for market sizing and forecasting.
RationalStat combines a mix of secondary sources as well as primary research to assess the market size and develop a forecast. Key steps involved in accurately deriving the market numbers are:
- Defining the problem by understanding the type of market and data required by the client.
- Data gathering and collection through relevant paid databases, publicly available sources, company reports, annual reports, surveys, and interviews.
- Formulating a hypothesis to create market numbers, forecasts, influencing factors, and their relevance.
- Evaluating and analyzing the data by referring to data sources utilized and leveraged.
- Validating, interpreting, and finalizing the data by combining the details gathered from primary and secondary sources with the help of experienced analysts.
- Annual reports, company filings, investor presentations, product catalogs, and company documents
- Industry and market-related documents available in the public domain
- Paid database including Bloomberg, Factiva, S&P Capital IQ, FactSet, Refinitiv Eikon, ICIS, EUWID, and Thomson Reuters, among others
- Whitepapers, research papers, and industry blogs.
Why buy this report?
The report is intended for litigation funding investment providers, government organizations, investors, regulatory agencies, and market research firms, among others. The report provides an in-depth analysis of market size, consumption patterns, ongoing market trends and challenges, and future market opportunities. The report will serve as a source for a 360-degree analysis of the market thoroughly delivering insights to clients to find the right answers to their business questions.
Frequently Asked Questions (FAQs)
The global litigation funding investment market is expected to grow at a CAGR of approximately 9% during the forecast period 2022-2028.
The global market for litigation funding investment was US$ 14.5 Billion in 2021.
Increasing awareness about litigation financing is one of the major trends in the global litigation funding investment market.
North America is the leading region in this market.
Major companies operating in the global litigation funding investment market include Parabellum Capital, Bentham Capital, Juridica Brickell Key, Burford Capital LLC, Woodford Litigation Funding Ltd, Apex Litigation Finance, Omni Bridgeway, Vannin, Augusta Ventures, Longford Capital Management LP, Calunius Capital, Harbour Litigation Funding Ltd, and Others.