Litigation Funding provides financial support to claimants pursuing meritorious legal actions, in return for a share of the proceeds. These funding arrangements offer individuals, businesses, and institutions a means to pursue justice without compromising financial flexibility or capital reserves.

Uncorrelated Investment Asset Class

As of 2024, the global litigation funding market is valued at approximately USD 23.57 billion. Projections indicate growth to around USD 59.78 billion by 2034, reflecting a compound annual growth rate (CAGR) of 9.62% during the forecast period.

$23.57B

Market Value (2024)

CAGR

How Does Litigation Funding Work?

Capital is provided on a non-recourse basis, meaning the funder only receives a return if the case results in a successful settlement or judgment. The legal merits, enforceability, and counterparty risk of each claim are thoroughly assessed before any commitment is made.

Investments may be structured around:

Individual Commercial Disputes

The funder may cover legal fees, expert witness costs, court fees, and other associated expenses, while the legal team remains entirely independent.

Return only upon successful case outcome

Non-Recourse

• Commercial Insurance

• Intellectual Property

• Construction

• Environmental

• International Arbitration

Litigation Sectors

Litigation Funding Investment Market

Source: Lexington

Diversification

Engineered for predictability and robust yieldld

A Typical Litigation Funding Agreement

Example

Rapid industry growth is fueled by rising legal costs, increasing dispute complexity , and global economic pressures (e.g. tariffs, disrupted supply chains impacting SMEs).

Litigation funding provides essential capital, democratising access to justice and reflecting societal values of accountability and fairness. It’s the next frontier in private capital, offering uncorrelated returns and investor appeal.

Essential Capital

Funds strong legal claims

Role and Benefits

Litigation funding offers a compelling value proposition for sophisticated investors seeking uncorrelated, non-market-dependent returns.

Key benefits include:

Low correlation to equity and bond markets

Attractive risk-adjusted returns in both rising and falling economic conditions

Access to unique return drivers tied to legal outcomes, not macroeconomic events

Social alignment in many cases, enabling access to justice and leveling the legal playing field

When thoughtfully applied, litigation funding can:

Promote fairness by allowing individuals, small businesses, and under-resourced parties to pursue legitimate legal claims

Hold powerful institutions accountable, especially in commercial disputes, class actions, and corporate misconduct cases

Support transparency and the rule of law, particularly in jurisdictions where justice is prohibitively expensive

Enable ESG-related legal actions, including environmental harm, labour rights, and corporate governance disputes

As with any alternative asset class, litigation funding carries specific risks that require professional oversight and rigorous selection:

Binary outcomes – success may be case-dependent, with full or partial loss of capital possible

Lengthy timelines – resolution can take years, affecting liquidity

Regulatory and jurisdictional variation – laws differ widely across markets, requiring deep legal expertise

Reputation risk – particularly in cases of public interest or ethical complexity

Our clients well-managed litigation finance portfolios are spread capital across multiple claims, jurisdictions, and legal strategies to balance these risks.

“It’s only for desperate plaintiffs.”
In reality, many large corporates and institutions use litigation funding to manage risk and free up capital for other priorities.

“Funders influence legal decisions.”
Funders have no control over legal strategy or case management. The independence of legal counsel is maintained at all times.

“It’s too risky.”
While litigation inherently carries risk, structured funding models, diversification, and strict due diligence significantly mitigate downside exposure.

Of course, not all litigation funding is impact-driven - some investments are purely opportunistic. However, for investors who value purpose alongside performance, this asset class can provide both.

Case Study:

Bates & Others v. Post Office Ltd

Between 2000 and 2014, hundreds of UK sub-postmasters were wrongfully accused of theft and fraud due to faults in the Post Office's Horizon IT system. Many faced financial ruin, criminal convictions, and personal hardship. In 2019, 555 sub-postmasters, led by Alan Bates, initiated a group litigation against the Post Office. This legal action was made possible through litigation funding, which provided the necessary resources to challenge a well-resourced defendant.​

The High Court ruled in favor of the claimants, acknowledging the system's faults and the injustices suffered. This case not only rectified individual wrongs but also prompted a broader examination of institutional accountability within the UK's postal system.​

Source: The Guardian

BHP & Mariana Dam Disaster

In one of the largest litigation-funded cases to date, UK law firm Pogust Goodhead is representing over 640,000 victims of the 2015 Mariana dam disaster in Brazil—a catastrophic event that caused severe environmental and human damage.

The lawsuit targets mining giant BHP, alleging corporate responsibility for the dam's failure and its devastating impact. The legal action is supported by £450 million in funding from U.S. hedge fund Gramercy, making it one of the most significant examples of litigation finance being used to hold a multinational corporation accountable.

This case highlights the power of litigation funding to support access to justice at scale, enabling victims to pursue compensation and corporations to be challenged in global courts.

Source: The Guardian The Financial Times

Case Study:

Note: Information and statistics quoted on this page originate from Prequin, UNSW Law Journal, Market Research Future, The Hedge Fund Journal, Westfleet Advisors, International Legal Finance Association, Financial Times, Law360