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Dispelling the Myths of Litigation Funding

By Travis Lenkner
July 01, 2017

Litigation finance, or the practice of providing capital using legal claims as the underlying asset, is a growing industry. Its use by law firms alone grew four-fold between 2013 and 2016, according to Burford's 2016 Litigation Finance Survey. However, the more a new industry grows, the more it is talked about — and, inevitably, misunderstood. So it goes for litigation finance in 2017. And while litigation finance can be a useful problem-solving tool in a variety of circumstances, to optimize its use, the legal and corporate industries should first collect the facts.

Here, I dispel three of the most common misconceptions about litigation finance.

Myth #1: The growth of litigation finance is driven by outside investors. Fact: The growth of litigation finance is driven by demand from clients and lawyers.

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