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12 September 2023
Litigation Finance Journal states that litigation finance’s market size is unknown because “the answer is dependent on an element of transparency not currently inherent in the industry itself.”5 In an attempt to quantify the litigation insurance marketplace, the GAO report drew on the Westfleet report, which identified 47 active commercial litigation funders. [...] If the plaintiff’s attorney is influenced by a litigation funder who attempts to steer legal strategy in a way that alters the attorney’s, the duty of independent judgment is compromised. [...] Absence of Disclosure The limited disclosure made by third-party litigation funders is the issue most often in the crosshairs of litigation funding’s opponents.13 They argue that defendants at trial are often required to furnish information about the insurance they carry. [...] Similarly, if the existence of third-party funding were disclosed, the court might have a better understanding of the motivation of the litigants and their attorneys. [...] Chamber of Commerce Institute for Legal Reform published a study on the national security implications of third-party litigation funding in November 2023.26 Conclusion Our review and analysis of third-party litigation funding trends find that the workings of the industry need to be better understood.