What Is Litigation Funding? The Litigation Funding Marketplace
10 January 2023
The American Bar Association, which refers to the practice as “alternative litigation finance,” or ALF, defines it as “the funding of litigation activities by entities other than the parties themselves, their counsel, or other entities with a preexisting contractual relationship with one of the parties, such as an indemnitor or a liability insurer.”3 The Litigation Funding Marketplace The litigati. [...] If the lawsuit is successful, the funder is entitled to receive a portion of the proceeds. [...] A global campaign of disinformation exists to attack the idea of commercial legal finance and the individual providers of it.7 On the opposite spectrum, opponents of litigation finance advance four main arguments: Disclosure. [...] One of the model rules for professional conduct of the American Bar Association (504(c)) stipulates that “a lawyer shall not permit a person who recommends, employs, or pays the lawyer to render legal services for another to direct or regulate the lawyer’s professional judgment in rendering such legal services.” Fee sharing or fee splitting violates this rule.8 The issue that has gotten the most a. [...] Supporters of litigation argue that the existence and terms of funding are confidential; opponents maintain that parties in a legal dispute have a right to know if third parties are investing in the outcome of their lawsuits.