The Global Litigation Funding Investment Market Was Valued at USD 12,797.4 Million In 2021 and Is Projected to Reach USD 21,405.4 Million By the End Of 2028, Growing at A CAGR Of 8.9% Between 2022 and 2028.
Litigation funding investment is also called legal financing and third-party litigation funding (TPLF). Litigation funding generally refers to a financing arrangement whereby the legal costs and expenses of a party are funded by a third party that is not party to the dispute.
Litigation funding investment is not new and is a rapidly growing market across the globe, especially in developing and emerging regions. Litigation funding is the provision of funding by a third party to cover the costs of pursuing a legal claim. Litigation funding can be used to fund all sorts of legal claims, including personal injury claims, commercial disputes, and clinical negligence claims.
Litigation Funding Investment Market Dynamics
Drivers
Litigation Funding Investment: An Alternative to Loan
Litigation funding investment is more attractive and easily available, as obtaining capital from a litigation funder is more comfortable than applying a bank’s line of credit to finance a case. In the case of a bank loan, if the lawsuit is lost at trial, the interest-bearing loan must be repaid no matter what happens, but on the other hand, that is not the case with litigation finance. In litigation, funding is non-recourse, and a return on investment is collected only if the lawsuit is successful. Another benefit of litigation funding is that claimants who use third-party funding also are relieved of the burden of ongoing principal and interest amounts or payments. Litigation finance is also immune from rising interest rates. Individuals, companies, and law firms use litigation funding to reduce risks and rather than self-funding legal disputes, third-party funding delivers immediate accounting benefits. Third-party funding removes the expense and, in some circumstances, can even be treated as direct earned revenue which immediately boost the financial picture for a law firm or company
Restraints
Nowadays banks can be seen offering lucrative offers on personal loan options. For this, banking sector is heavily investing in marketing to tap the untapped area in loan offering sector involving law suits and legal cases. On the other hand, large number of individuals are highly unaware of the litigation funding investment companies in existence across their region. Banks dominate these companies not in providing services but in marketing. Banks are easily available for providing loans to the individuals and third-party funding companies do not have that much of presence in most of the countries. While offering lucrative loans, banks have started offering attractive loan repayment options to the consumers. Offers for loan by the banks are tapped by a greater number of people rather than approaching litigation funding investment companies. Lack of substantial presence of the third-party funding companies with some other drawbacks has drawn buffering line between consumer and these companies.
Opportunities
Rapidly Increasing Demand for Litigation Funding in Emerging & Developing Economies
Geopolitical and financial uncertainty is still revolving around the global economy and Asia Pacific economies are continuously suffering the ripple effect of China’s economic rebalancing. In the middle of this, COVID-19 crisis has shaken up the Asian economy and the level of uncertainty has increased by several folds. With all this going on, rate of law suit and legal case filing has rapidly increased across Asian countries. Litigation funding scenario across emerging and developing economies is set to increase, as Hong Kong has debated a proposed Corporate Rescue Procedure but it is unclear when it will be enacted. South American legal environment is awarding for litigation funding companies, where South American legal disputes could present significant investment opportunities. Outward expressed interest can be seen among several sector including import-export, oil and gas, and mining across South America. This in all has compelled litigation funding investment companies to put more efforts into establishing their bases in emerging and developing countries. On the other hand, a greater number of litigation start-ups are surfacing than ever in emerging countries including India and South Africa to grab the untapped opportunity.
Litigation Funding Investment Market Segmentation
Based on type, the global litigation funding investment market is segmented into commercial litigation, bankruptcy claim, international arbitration, and other types. Commercial litigation funding are types which grab highest share of the overall litigation funding investment market. International Arbitration is expected to be the second leading segment in this market, and it accounted for 30% of the global revenue share in 2021. Arbitration provides an alternative to litigation pursued through jurisdictional courts, offering control and flexibility to the parties involved in a dispute.
By End-User, litigation funding investment is bifurcated into bfsi, manufacturing, media & entertainment, IT & telecom, healthcare, others. In 2021, the BFSI segment was the largest revenue generator and it accounted for over XX% of the global revenue share in 2021.
The IT &Telecom is expected to grow at the highest CAGR in the global litigation funding investment market during the forecast period. Furthermore, the increasing cases of medical malpractice are projected to drive the demand for litigation funding in the healthcare sector.
Regional Insights
North America dominated the global industry in 2021 and accounted for a maximum share of more than 40% of the overall revenue. North America is significantly growing in the global litigation funding investment market. Highest number of people approaching the litigation companies for investment funding is the major factor driving the North American litigation funding investment market.
Europe was another leading regional market, and it is expected to grow rapidly in the coming years due to highly effective marketing strategies adopted by the litigation funding investment companies and increased number of people applying to these companies. Germany, France and U.K. are major country markets for litigation funding investment market. The UK accounted for the largest revenue share of about 24% in 2022 for the European market, followed by Germany fastest growing country likely to grow at a CAGR of XX% in the forecast period.
The Asia-Pacific region is expected to emerge as one of the most profitable regions for this market over the forecast period. Litigation funding investment market is increasing in Asia Pacific due to highest number of people applying for funding investments to the companies. The seed of the modern third-party finance industry was planted in Australia, where a confluence of factors fostered its growth.
Competitive Landscape
Some of the major competitors dominating the global litigation funding investment market include Apex Litigation Finance, Augusta Ventures Ltd., Burford Capital LLC, Woodsford Litigation Funding Ltd., O Harbour Litigation Funding Ltd., Therium Group Holdings Limited, IMF Bentham, FORIS AG, Deminor, Longford Capital Management, Balance Legal Capital LLP, and among others.
Litigation Funding Investment Market Scope and segmentation
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Attribute
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Details
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Market Size in 2021
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USD 12,797.4 million
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Estimated Market Size in 2028
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21,405.4 million
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CAGR Growth Rate
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8.9% CAGR
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Historical Year
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2016 to 2021
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Forecast Years
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2022-2028
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Segmentation
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Type, End-User and Region
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By Type
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- Commercial Litigation
- Bankruptcy Claim
- International Arbitration
- Others
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By End-Users
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- BFSI
- Manufacturing
- Media & Entertainment
- IT & Telecom
- Healthcare
- Others
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Major Regions Covered
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- North America
- Europe
- Asia Pacific
- Latin America
- The Middle East & Africa
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Key Market Players
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- Apex Litigation Finance
- Woodsford Litigation Funding Ltd
- IMF Bentham
- Therium Group Holdings Limited
- Burford Capital LLC
- Harbour Litigation Funding Limited
- Balance Legal Capital LLP
- Longford Capital Management,
- FORIS AG
- Augusta Ventures Limited
- Deminor
- Pravati Capital
- Legalist Inc.
- Validity Finance, LLC
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Report coverage
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Revenue forecast, company share, competitive landscape, growth factors and trends
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Free customization scope (equivalent to 5 analysts working days)
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