After Congress Miss, Funders Ask What Next?: Litigation Finance

Welcome back, I’m senior reporter Emily Siegel and here’s the news that’s affecting the industry in the busy past two weeks.

The industry may still be firing off rockets over the fact that a measure that could’ve added a 41% tax on profits was removed from the “big, beautiful bill” just in time for the Fourth of July.

But there is also regrouping and assessing how things went and what should be done differently next time. The International Legal Finance Association became a “war room” after the bill was included in the tax package, according to Executive Director Paul Kong.

Industry opponents have already signaled that the fight isn’t over. Evan Greenberg, CEO of Chubb and John Doyle, CEO of Marsh McLennan published an op-ed in the Wall Street Journalon Monday, blaming “excessive litigation” for rising costs and economic uncertainty. They said the bill would’ve “slowed the flood of money funding runaway litigation” and blamed “fierce lobbying” from the tort industry and funders for its death.

They ended saying they would need to go state-by-state to fix the problem. “We’re prepared” for the state-by-state fight, said Kong.

The bill exposed a vulnerability and insiders hope it will spur more collaboration moving forward. “The industry as a whole is not well represented from a lobbying perspective, because there’s a lot of divergent interests,” said Gian Kull, regional portfolio manager for the United Kingdom at Omni Bridgeway.

In California, a vote on legislation that aims to bring more transparency to litigation finance was delayed until possibly next year, my colleague Andrew Oxford writes. The measure (AB 743) requires investors financing lawsuits with the goal of profiting to get a license from the state. Litigation financiers would also have to file annual reports and certain other disclosures.

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Meanwhile, in Burford News

The other big winner from the prior week was Burford Capital. Argentina has filed notice it will appeal a decision that would force it hand over control of its largest energy company. A judge in New York determined that a 51% stake of YPF should be relinquished to pay billions of dollars to those whose shares were seized when the company was nationalized. Burford has been leading the fight to get payment from the nation.

My colleague Katie Arcieri on the antitrust beat wrote about how two Burford entities won’t be able to opt out of a $32.5 million deal with Cargill to settle claims the company colluded to raise turkey prices, after a judge ruled they failed to meet a key filing deadline.

What I’m Reading

Investment banks, hedge funds and debt investors are vying for contacts to fund lawsuits against California utilities over devastating LA wildfires. My colleagues and I dug into the companies going after Edison International and LADWP. Read More

The Financial Times published an article earlier this week about how private credit lenders have extended financing to US government contractors cut off by Elon Musk’s DOGE. Legalist, a lender that also works in the litigation finance space, was included in the article as providing more than $100 million in financing to dozens of contractors this year.

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