Third Party Litigation Funding (TPLF)

  • Home >
  • Issues >
  • Third Party Litigation Funding (TPLF)

Third party litigation funding (TPLF) is the practice of hedge funds and other financiers investing in lawsuits in exchange for a percentage of any settlement or judgment. TPLF is a global industry with approximately $100 billion available to funders and firms. The practice, while lucrative for those betting on cases, increases the probability that meritless claims will be brought, inserts questions about who is actually controlling the litigation other than the plaintiff and defendant, and makes settling lawsuits far more difficult and expensive. Even the funders admit they deliberately complicate litigation. Allison Chock, Chief Investment Officer at Bentham IMF (one of the world’s largest litigation funders) stated, “We make it harder and more expensive to settle cases,” highlighting TPLF’s distortion of our civil justice system. The U.S. Chamber Institute for Legal Reform (ILR) works to bring TPLF, which threatens to undermine long accepted norms in our judicial system, out of the shadows. Read More...

Unlike other financial products, TPLF is largely unregulated around the world. The practice operates in secret, making it difficult for judges and parties to know who actually has an interest in the outcome of the litigation. TPLF also presents various ethical issues, particularly when a funder is directly financing a law firm or lawyer and cutting claimants out of certain significant litigation decisions.

On multiple occasions, ILR has urged the federal Committee on Rules of Practice and Procedure and Advisory Rules Committees to adopt a disclosure rule to bring a degree of transparency to TPLF. Recently, ILR led a coalition of 30 business and legal organizations in sending a letter the Committee debunking the funders’ arguments against disclosure and transparency.

ILR believes TPLF, like other outside interests in litigation, should be subject to reasonable transparency standards.

Suggested Resources

Research

All Results for Third Party Litigation Funding (TPLF)

  1. In the News Today - May 16, 2019

    May 16, 2019 | News

    "State AGs Protest ALI Consumer Contract Restatement;" Litigation Funders Walk Through "Tools" They Use to Keep Recipients in Line... Read More

  2. In the News Today - May 3, 2019

    May 03, 2019 | News

    Judge Says TPLF Invites Questions of "Control;" U.S. Chamber Institute for Legal Reform Adds Capitol Hill Lawyer To Executive Team... Read More

  3. In the News Today - April 3, 2019

    April 03, 2019 | News

    Lawyers' Court Fight Spills Over From Florida To Texas... Read More

  4. Now We Know Why Litigation Funders Make It "Harder and More Expensive to Settle Cases"

    April 03, 2019 | Blogs

    Third party litigation funders can keep their presence hidden without the judge, jury, or defendant knowing that they're bankrolling the case. But every once in a while, we get some sunlight. Last year, an executive with one of the world's largest litigation funders, IMF Bentham, admitted to The Wall Street Journal that they "make it harder and more expensive to settle cases." Now, we may know why. ... Read More

  5. Lone Star Lawmakers Take Lead in Tackling Trio of Troubling Lawsuit Abuses

    March 29, 2019 | Blogs

    At a Judiciary Committee hearing this week, the Texas House of Representatives debated a trio of bills that address key issues facing the civil justice system today: The growing problem of lawsuits by cities and counties, harmful trial lawyer advertising misleading seniors into stopping their medications, and big finance firms investing in lawsuits.... Read More

  6. 30 Groups from Across the Business Spectrum Sign Letter Calling for Litigation Funding Transparency

    March 28, 2019 | Blogs

    Yesterday, a coalition of 30 business and legal organizations, led by the U.S. Chamber Institute for Legal Reform (ILR), wrote a letter the Advisory Committee-which writes rules for federal courts-countering funders' arguments against transparency. ... Read More

  7. ILR Chairman "Re-Upped" Call For TPLF Transparency

    March 27, 2019 | News

    U.S. Chamber Institute for Legal Reform Chairman Brackett Denniston "re-upped" the call for third party litigation funding transparency by sending a letter to a committee of the Administrative Office of the U.S. Courts, The Recorder reports.... Read More

  8. Litigation Funders: "Pay No Attention to the Man Behind the Curtain!"

    March 26, 2019 | Blogs

    In The Wizard of Oz, the "wizard" famously exclaims, "pay no attention to the man behind the curtain!" when Dorothy's dog Toto pulls back a curtain exposing him as a normal man and not a mystical being. While the self-serving quote may originate somewhere over the rainbow, it's akin to the real world-logic of today's litigation funding industry. ... Read More

  9. In the News Today - March 25, 2019

    March 25, 2019 | News

    Funders Say They Look For Cases With Damages "10 Times" The Amount of Their Investment... Read More

  10. "Public Power, Private Gain: Issues in Third-Party Litigation Finance"

    March 25, 2019 | News

    In a blog post, Erin Hawley of the Independent Women's Forum walked through the "troubling" development of the Washington, D.C. attorney general authorizing a private lawyer to use third party litigation funding to sue energy companies over fossil fuels. ... Read More