Litigation Funding Investment Market

Litigation Funding Investment Market Outlook (2023 to 2033)

The global litigation funding investment market is anticipated to generate revenues of USD 17,160.8 million in 2023. Demand for litigation funding investment is anticipated to increase at a CAGR of 9.6% and reach USD 43,048.3 million by 2033.

The market is expanding due to the claimants' rising need for litigation financing. This is fueled by the rise in legal costs, as well as the desire of both individuals and organizations to utilize litigation investment as a method of making money.

Opportunities Prevailing in the Litigation Funding Investment Industry

• Litigation funding investment adoption is driving due to the rising popularity of portfolio financing among investors.
• Growth is attributed to the supportive regulatory framework for lawsuit finance and the growing presence of litigation funders in several nations.
• Short-term financing hurts financial statements; thus, businesses employ litigation funding to mitigate this effect. This assists companies in concentrating more on their primary operations.
• Opportunities for market expansion are anticipated as a result of the global increase in litigation fund providers and the rise in extremely valuable legal disputes involving several countries.
• To increase their worldwide capability, important firms are expanding their investment possibilities across a range of jurisdictions and fields.

Market Trends Influencing the Demand for Litigation Funding Investment

• Litigation funders are taking advantage of the moral and legal complexities that surround their field. They consult with leading ethics experts, keep up with legal developments, and examine the ethical and legal implications of every venture before supporting it.
• Litigation funding investment business verticals are anticipated to finance claims at a comparatively less-risky asset class and continue to grow by 2033. Various banks & hedge financing businesses are projected to expand the market.
• Law firms are investing more money in specific cases, devoting money to things like jury selection, simulated trials, and discovery. The growth of large tort claims, which necessitates a substantial financial commitment from plaintiffs' attorneys, led the market growth to 1.07x between 2022 and 2023.

Challenges Obstruct the Market Demand

As many investors are still unaware of this highly specialized market, its strong returns-both absolute and relative-offer a rare glimpse into the limitations of efficient markets in the face of information asymmetry.

• The high risk of returns coupled with unpredictability is a constraining issue.
• Concerns about potential conflicts of interest, champerty, and the impact of funders on legal strategy have led to criticism of the litigation funding investment sector.
• It is fundamentally difficult and unclear to evaluate the merits and likely results of legal matters. Before investing, litigation funders must appropriately assess the risks involved with each case.

Attributes	Details
Litigation Funding Investment Market CAGR (2023 to 2033)	9.6%
Litigation Funding Investment Market Size (2023)	USD 17,160.8 million
Litigation Funding Investment Market Size (2033)	USD 43,048.3 million

Historical Litigation Funding Investment Market Analysis Compared to Future Outlook (2018 to 2022 vs 2023 to 2033)

In the past several years, the adoption of litigation funding investment has advanced significantly. Market valuation increased from USD 11,876.1 million in 2018 to USD 15,889.7 million in 2022, representing a noteworthy CAGR of 7.5% over that time.

Western nations have been using this kind of funding a lot lately. Nonetheless, it is experiencing quick adoption and acceleration in emerging markets like India. Litigation funders seek out investment portfolios that are well-diversified and dispersed over a variety of risks and rewards.

Going ahead, the industry is anticipated to expand as plaintiffs, law firms, and financiers all search for innovative methods to balance the expense of litigation with favorable results. Over the years, this sort of financing has had a definite application in the United States market, and general counsel and attorneys expect it to increase in usage in commercial litigation.

During the forecast period, the market is expected to have an incremental opportunity of USD 25,887.5 million.

Litigation Funding Investment Industry Future Outlook

Technology and changes in the types of customers available have made it more important than ever for attorneys to make a profit. Attorneys demonstrate their ability to offer cost-effectiveness and flexibility to win over a prospective client.

With greater resources and a role-playing environment for attorneys, litigation finance offers adaptable solutions for attorney-client needs. Lawyers create more original, useful, and client-centered solutions with the aid of litigation finance.

The industry is expanding at a 9.6% CAGR by 2033, thanks to the strong growth in capital investments brought on by the improved awareness of litigation finance. Also, investors frequently invest in other asset classes using lawsuit funding, which in turn helps the litigation funding investment business flourish.

Regional Analysis

Key Players in the North America Market Follow the Portfolio Finance Trends to be Successful

In 2022, North America had the leading market share with 27.3%. Regional growth is attributed to the favorable regulatory framework for lawsuit financing. Also, the presence of key litigation funders who offer efficient software and a wide array of cutting-edge services raises the demand for litigation funding.

Market growth in the region is driven by expanding portfolio finance trends among investors and rising end-user demand for litigation funding investments.

• The litigation finance industry in the United States is huge and complicated, and a variety of investors and service providers are vying for clients. The United States market controlled the industry with a share of 17.3% in 2022.
• One of the most common sources of funding for legal proceedings is the United States government. Before making a financial commitment, it is crucial to perform due diligence on possible lawsuit financing providers.
• To decide whether it is worthwhile to continue investing, it is crucial to analyze and monitor the development of your litigation funding investment.

Asia Pacific Market Grows with Emerging Economies

Country	Details
China Market CAGR (2023 to 2033)	12.5%
India Market CAGR (2023 to 2033)	10.6%
Japan Market Share (2022)	6.4%

China has become a significant source of revenue in the Asia Pacific region and had 40% of the region's overall market share in 2021, followed by Japan and South Korea. Private equity companies, institutional investors, and high-net-worth individuals looking for investment alternatives have all been interested in litigation finance. Investor interest in funding Indian litigation has surged due to the possibility of lucrative returns that are uncorrelated with standard asset classes.

European Market to See High Potential in the Litigation Funding Investment Sector

Europe has a significant scope in the market. In 2022, the region was expanding, with a market share of 21.2%.

Country	Details
United Kingdom Market CAGR (2023 to 2033)	8.9%
Germany Market Share (2022)	8.5%

The primary driver affecting the demand in the United Kingdom is the need for a variety of industries, along with government assistance. In all United Kingdom courts, litigation-based financing is recognized as an acceptable practice. There is also a Code of Conduct for Lawsuit Funders in the nation.

This gives participants and fund managers who want to raise money through lawsuit finance excellent practices. The Association of Litigation Funders is a regulatory organization that oversees the nation as well. Moreover, it is anticipated that the rise of new start-ups that use cutting-edge technology like artificial intelligence to forecast probable claims is likely to propel the industry throughout the area.

Category analysis

Category	Type
Top Segment	Commercial Litigation
Market Share (2022)	53.7%
Segment Growth Factor	The growth of the commercial litigation market is attributed to the increasing complexity of business disputes.
Opportunity Provided to the Manufacturers by Segment Growth	Joint venture Partnership disputes Business torts Breach of contract cases Class actions

Category	End User
Top Segment	BFSI
Market Share (2022)	49%
Segment Growth Factor	Growth is attributed to regulatory changes and digital transformation.
Opportunity Provided to the Manufacturers by Segment Growth	Investment in data analytics and technology Emerging Fintech start-ups

Category	Enterprise Size
Top Segment	Large Enterprise
Market Share (2022)	63.4%
Segment Growth Factor	Large firms are disproportionately burdened by the growing number of lawsuit claims they must manage because of their broad service or product portfolios and worldwide reach.
Opportunity Provided to the Manufacturers by Segment Growth	Efficient risk evaluation systems Emerging economies

Which Segments are Significantly Growing in the Market?

• The media and entertainment section, based on end users, is anticipated to expand quickly due to an increase in trademark and copyright infringement lawsuits across the industry. Moreover, it is projected that the growing number of medical malpractice claims increases the demand for litigation finance in the healthcare industry.
• According to enterprise size, new start-up businesses entering the litigation funding investment sector are blamed for the quick expansion of the SMEs category. These start-ups, which are essentially core technology businesses, assess the risks using specially created algorithms.
• International arbitration is conducted in front of arbitrators, who are private judges. This is an international method of consensual, neutral, private, and binding conflict settlement.
  • Comparing international arbitration to domestic court processes, the former is quicker and less expensive.
  • In a bankruptcy claim segment, there is little money available for the debtor to hire counsel. It is difficult to recover their property or the losses sustained by the firm throughout the bankruptcy process. The effective settlement of claims is the creditors' sole alternative.

Competitive Analysis

How do Key Players in the Litigation Funding Investment Market Create Intense Competition?

To get a sizable market share and lower risks, these firms are concentrating on diversifying their investment portfolio and luring clients from other industries. To increase their market share and obtain a competitive advantage over other market participants, these players employ a variety of techniques. Key tactics used by participants in the sector include product launches, mergers and acquisitions, partnerships, and collaborations.

Top companies in litigation funding investment are still growing. The dominant company in the market, which is traded openly on the LSE (London Stock Exchange), is Burford Finance. Big, medium-sized, and small companies have lucrative opportunities in the market.

Key Developments in the Litigation Funding Investment Industry:

• The London-based claimant legal firm suing mining behemoth BHP for USD 6,230 million is scheduled to collect an additional USD 124.54 million from investment company North Wall Capital in July 2022.
  • The action represents a substantial extension in the financial connection between PGMBM, which has initiated class actions against several big firms.
  • This included Volkswagen, British Airways, Bayer, and North Wall, a self-described special circumstances investor.
• In July 2022, Thaxted Capital, a litigation finance company located in Manchester, received a USD 31.13 million investment from Sandton Capital Partners. Thaxted's debut and next activities are the main goals of the financing.
• The Ministry of Law in Singapore has extended its third-party funding agreement from 2017 to June 2021, to meet the growing demand from businesses for external funds to finance dispute resolution.

Key Players

• Parabellum Capital
• Bentham Capital
• Juridica Brickell Key
• Burford Capital LLC
• Woodford Litigation Funding Ltd
• Apex Litigation Finance
• Omni Bridgeway
• Vannin
• Augusta Ventures
• Longford Capital Management LP
• Calunius Capital
• Harbour Litigation Funding Ltd
• Others

Table of Content

• 1. Executive Summary
• 2. Market Overview
• 3. Market Background
• 4. Global Market Analysis 2018 to 2022 and Forecast, 2023 to 2033
• 5. Global Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Type
  • 5.1. Commercial Litigation
  • 5.2. International Arbitration
  • 5.3. Bankruptcy Claim
  • 5.4. Personal Injury
• 6. Global Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Enterprise Size
  • 6.1. Micro, Small, and Medium Enterprises (MSMEs)
  • 6.2. Large enterprises
• 7. Global Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By End User
  • 7.1. Banking, Financial Services, and Insurance Sector (BFSI)
  • 7.2. Manufacturing
  • 7.3. IT & Telecommunication
  • 7.4. Media & Entertainment
  • 7.5. Healthcare
  • 7.6. Others
• 8. Global Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Region
  • 8.1. North America
  • 8.2. Latin America
  • 8.3. Europe
  • 8.4. South Asia
  • 8.5. East Asia
  • 8.6. Oceania
  • 8.7. MEA
• 9. North America Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country
• 10. Latin America Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country
• 11. Europe Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country
• 12. South Asia Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country
• 13. East Asia Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country
• 14. Oceania Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country
• 15. MEA Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country
• 16. Key Countries Market Analysis
• 17. Market Structure Analysis
• 18. Competition Analysis
  • 18.1. Burford Capital
  • 18.2. IMF Bentham
  • 18.3. Therium Capital Management
  • 18.4. Harbour Litigation Funding
  • 18.5. Omni Bridgeway
  • 18.6. Augusta Ventures
  • 18.7. Woodsford Litigation Funding
  • 18.8. Longford Capital Management
  • 18.9. Bentham IMF
  • 18.10. Vannin Capital
• 19. Assumptions & Acronyms Used
• 20. Research Methodology