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ANALYSIS: Litigation Funders Have Their Pick of Practice Areas

Dec. 9, 2020, 12:07 PM

Results from the Bloomberg Law 2020 Litigation Finance Survey reveal demand from lawyers for litigation finance that cuts across nearly all practice areas, while finance companies themselves are interested in growing funding for one area in particular: environmental litigation.

The survey shows that in almost every practice area, lawyers are more likely to be interested in receiving funding than to have actually obtained funding. The sole exception is patent litigation which, due to its high-risk—but potential for high-reward—nature, is already a well-funded area. Given these interest levels, funders may continue to be choosy with the types of matters that they fund.

Yet the survey also shows that there are only two practice areas in which funders’ interest levels outpace their funding levels: environmental litigation and pro bono. And changes to the environmental regulatory framework under the incoming Biden administration, as well as decisions in pending climate change litigation, might soon increase the volume of litigation in the environmental field.

A law firm considering which of various matters to tee up for a funding proposal should consider any environmental claims they have in the offing. As the survey shows, funders will want to get in on the ground floor of meritorious and potentially lucrative environmental matters.

Firms might also be able to share the financial load of pro bono matters with a litigation funding partner.

The current level of interest in funding across practice areas won’t be a surprise to litigation funders, who have shown signs of growth despite—or perhaps because of—the economic downturn, including high levels of raised capital and the entrance of one of the biggest industry players, Burford Capital, onto the New York Stock Exchange.

Bloomberg Law subscribers can find related content on our In Focus: Litigation Finance page.

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