What Is Third Party Litigation Funding (TPLF)?
TPLF involves hedge funds or other financiers investing in lawsuits in exchange for a share of any proceeds from a settlement or a judgment award. Some estimates place the litigation finance market between €40 billion and €80 billion globally.
How Does TPLF Work?
Funders Operate in the Shadows
Funders May Take Control of Litigation
Funders Are Often Paid Before Plaintiffs
Litigation Funding Puts Investors Ahead of Claimants
TPLF Is Unregulated
TPLF is largely unregulated. Unlike other commercial activities, TPLF is not subject to any government oversight. Litigation funders should be subject to fair and proportionate regulations like other financial and legal professions to prevent litigation abuse and ensure adequate compensation to plaintiffs.