Recent Survey Highlights Continuous Advancement in Litigation Financing

Recent insights and findings from the Bloomberg Law® Litigation Finance and State of Practice survey highlight a consensus among litigation funders and affiliated lawyers that the sector is experiencing steady growth.

The Bloomberg Law 2024 series comprises litigation analyses scrutinising both in-court and extrajudicial advancements poised to influence the trajectory of law in the coming year.

Equally, the leading integrated legal research and business intelligence platform reports that 2023 has proven to be a dynamic year for the litigation finance sector. Moreover, and bolstered by persistent demand, litigation financing sectors are poised for continued expansion in 2024.

While specific practice areas are anticipated to dominate investment in 2024, others reveal promising signs for sustained expansion.

In the upcoming year, investors will channel their financial resources towards a more refined selection of cases, focusing on those claims presenting the most straightforward route to favourable outcomes.

Trending Shift Towards Single-Case Funding in Principal Practice Areas

A prevalent litigation funding strategy to diversify inherent risks has traditionally been to finance a range of a firm's cases as a collective portfolio.

However, as the emphasis shifts towards more concentrated investments, there’s a growing inclination towards funding individual cases in 2024—either through legal firms or directly to the claimant.

Bloomberg Law's comprehensive surveys revealed a clear trend. Of the responding funders, an average of 54% said their financial resources were channelled towards "direct to claimant single-case financing", with 37% allocated to "legal firm single-case financing."

Emphasis on Breach of Contract Cases

Similarly, commercial litigation is projected to remain a primary beneficiary of third-party funding in the upcoming year.

Funders are showing continued interest in claims pursuing damages arising from breaches of contract, particularly in instances where liability has been established and the claimant is actively pursuing compensation.

Such funding patterns are expected to persist as corporations and legal entities endeavour to manage costs and circumvent borrowing in a landscape marked by escalating interest rates.

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