Litigation Finance & Legal Claims
Financing legal claims as an asset class — from commercial litigation funds to pre-settlement consumer funding.
Overview
Litigation finance provides capital to plaintiffs or law firms pursuing lawsuits in exchange for a share of settlement/verdict proceeds. Market size: $15B+ global litigation funding (2024), growing 15-20% annually as institutional investors enter. Investment access via: (1) Public litigation funders (Burford Capital, Omni Bridgeway), (2) Litigation finance funds (Bentham IMF, Longford Capital), (3) Crowdfunding platforms (LexShares, Mighty). Returns: 15-30% annual IRR (top quartile funds) driven by 2-5x returns on won cases. Uncorrelated with markets (0.0-0.1 correlation). Risks include adverse judgments, case duration (3-5 years typical), and adverse cost orders. Suitable for sophisticated investors seeking diversification and comfortable with 5-7 year lockups.
Key Benefits
- High returns: 15-30% IRR from successful cases; 2-5x gross returns common on commercial litigation
- Zero correlation: Case outcomes driven by legal merits, not market conditions; perfect portfolio diversifier
- Asymmetric payoff: Limited downside (capital invested) vs. unlimited upside (some verdicts 10-50x investment)
- Growing market: Corporate acceptance increasing; 70% of Fortune 500 use litigation funding (2024 vs. 20% in 2015)
- Professional underwriting: Funds employ experienced litigators to vet cases; 70-80% case approval rate for funded matters
- Inflation protection: Lawsuit awards/settlements grow with inflation; attorneys' fees increase faster than CPI
- Regulatory tailwinds: UK, Australia, Singapore fully legalized; US allowing more disclosure and acceptance
Latest Research & Analysis
View All
The Ultimate Guide to Litigation Finance: Investing in Legal Claims as an Asset Class
Invest in the $25B litigation finance market: Commercial funding, pre-settlement advances, and tokenized legal claims earning 20-30% returns. Complete guide to legal funding investment.
Tokenized Lawsuits & Initial Litigation Offerings: The 2025 Reality Check
Why ILO tokens failed, how AxiaFunder delivers 23% IRR without blockchain, and what works in fractional legal claims. The 2025 reality check.
The Litigation Finance Access Ladder: Which Vehicle Fits Your Wallet Size?
From $10 Burford stock to $5M private funds: practical guide to accessing litigation finance across every investor profile and wallet size.
Litigation Finance Structures Explained: How PDNs, SPVs & Waterfalls Really Work
Learn how PDNs, SPVs, and waterfall structures control risk, protect capital, and determine actual returns in litigation finance.
Liquidity in Legal Assets: The Rise of the Litigation Finance Secondary Market
How secondary trading is solving litigation finance's illiquidity problem: LP stake sales, direct portfolio deals, NAV facilities, and why discounts to NAV exist.
Top Platforms & Investment Options
Burford Capital (BUR.L)
1 share (~$12-15)Largest public litigation funder. $6B AUM. Portfolio: 100+ cases (commercial, IP, antitrust, arbitration). Historical returns: 15-20% annually. Trades London Stock Exchange. Market cap $2B. Dividend yield 3-4%. Quarterly reporting provides transparency. Most liquid litigation exposure.
Visit PlatformOmni Bridgeway (OBL)
1 share (~$2-4 AUD)Australian litigation funder. $3B AUM. Portfolio: Commercial, class actions, international arbitration. Listed on ASX. Returns: 12-18% annually. Dividend yield 2-3%. More conservative underwriting than Burford; lower returns but higher win rates. Market cap $800M.
Visit PlatformLexShares
$5,000 per case (accredited only)Crowdfunding platform for commercial litigation. Fractional investment in pre-vetted cases. Minimum $5K-$25K per case. Target 2-3x returns over 3-5 years. 60+ cases funded (2018-2024). Realized returns: 15-30% IRR on successful cases. Accredited investors only. Diversification critical (10-15 cases).
Visit PlatformMighty
$100 per caseConsumer litigation platform. Fund individuals' lawsuits (employment, civil rights, personal injury). Minimum $100 per case. Lower returns (1.5-2x target) but faster resolution (1-2 years). Higher volume, smaller cases. Not accredited-only. Suitable for retail investors testing litigation finance.
Visit PlatformBentham IMF (now Omni Bridgeway after merger)
$1,000,000 (institutional only)Institutional litigation fund. $500M+ fund sizes. Portfolio: Commercial litigation, class actions, IP, antitrust. Minimum $1M (institutional only). Target 20-25% net IRR. 5-7 year terms. 70-80% win rate. Diversification across 30-50 cases. Top-tier underwriting standards.
Visit PlatformLongford Capital
$100,000 (accredited only)Litigation finance fund. Focus: Single-plaintiff commercial cases (breach of contract, fraud, IP). $200M AUM. Target 15-20% net IRR. Minimum $100K (accredited). 5-year terms with possible extensions. UK and US cases. Conservative underwriting; 65-75% success rate.
Visit PlatformParabellum Capital
$250,000 (accredited only)Litigation fund specializing in international arbitration. High-stakes cases ($50M-$500M). Minimum $250K (accredited). Target 25-30% net IRR. Higher risk/return than commercial litigation. 3-5 year case durations. Portfolio diversification critical (funds invest in 15-25 arbitrations).
Visit PlatformAccessing Litigation Finance
Start with Public Litigation Funders
Burford Capital (BUR.L) is largest public funder; $6B AUM, 15-20% historical returns. Trades on London Stock Exchange. Minimum 1 share (~$12-15). Diversified portfolio (100+ cases) reduces binary risk. More liquid than private funds. Alternative: Omni Bridgeway (ASX: OBL).
Explore Litigation Finance Funds
Bentham IMF, Longford Capital, Parabellum Capital offer institutional litigation funds. Minimums $100K-$1M (accredited only). Target 15-25% net IRR. 5-7 year lockups. Diversified portfolios (20-50 cases) across commercial, IP, antitrust, international arbitration. For sophisticated investors.
Consider Crowdfunding for Single Cases
LexShares offers fractional investment in pre-vetted lawsuits. Minimums $5K-$25K per case. Target 2-3x returns over 3-5 years. Binary outcomes: Case wins = 100-300% return; loss = total loss. Diversify across 10-15 cases to mimic fund portfolio. Higher risk than institutional funds.
Understand Case Types and Returns
Commercial litigation (breach of contract, IP infringement): Lower returns (15-25% IRR) but higher success rates (60-70%). Antitrust, securities fraud: Higher returns (25-35% IRR) but lower success rates (40-50%). Personal injury: Fast resolution (1-2 years) but lower returns (10-15% IRR). Choose based on risk tolerance.
Litigation Finance Risks
Important considerations before investing in litigation finance & legal claims
- Adverse judgments: 30-40% of cases lose at trial; total loss of capital invested (no partial recovery)
- Duration uncertainty: Cases take 3-5 years average; 10+ years for complex matters; capital locked up with no intermediate returns
- Adverse cost orders: UK/Australia systems require losing party to pay winner's costs; can result in losses exceeding investment
- Appeal risk: Winning at trial doesn't guarantee payout; appeals take 2-4 additional years and can reverse judgments
- Settlement pressure: Defendants use time/cost pressure to force low settlements; 60-70% of cases settle (not all at full value)
- Correlation with legal environment: Tort reform, caps on damages, pro-defendant judges reduce litigation value
- Concentration risk: Single-case funding = binary outcome; even funds can have concentration (Burford's Petersen case = 40% of portfolio)
- Opacity: Private funds and single cases lack transparency; difficult to assess risk until case concludes
Due Diligence Checklist
- Check win rate: Top funders win 65-75% of cases; <60% win rate = poor underwriting or excessive risk-taking
- Assess portfolio diversification: Funds should hold 20-50 cases; <10 cases = concentration risk; single-case investments extremely risky
- Verify case type: Commercial litigation safer (60-70% win rates) than mass torts or securities fraud (40-50% win rates)
- Understand fee structure: Most funds take 2-3x gross returns; attorneys take 30-40%; net to investors often 50-60% of gross recovery
- Review historical returns: Top quartile funds deliver 20-30% IRR; median funds 10-15% IRR; bottom quartile often negative after fees
- Check case merit: Platforms should provide detailed case summaries; if unable to understand legal theory, don't invest
- Assess jurisdiction: Delaware, New York favorable to plaintiffs; Texas, certain California courts more defendant-friendly
- Evaluate duration: Personal injury cases resolve faster (1-3 years) than commercial (3-7 years); longer duration = lower IRR despite similar gross returns
Real-World Examples
Burford Capital (2010-2024): $10K invested in IPO grew to $45K (11.5% CAGR including dividends). Outperformed S&P 500 in some periods; volatile (stock down 50% in 2019 on short-seller report).
LexShares case (anonymized): $50K invested in IP infringement case (2019). Case settled $8M (2022). Investor received $140K (2.8x gross return, 40% IRR over 3 years).
Burford's Petersen case: Invested $17M (2016) in Argentine YPF expropriation. Won $16B judgment (2020). Burford's share: $6B+ (300x+ return). Single case drove 40% of fund returns 2019-2022.
Failed case example: $25K invested in securities fraud case (2018). Case dismissed on summary judgment (2020). Total loss. Illustrates binary risk even for well-underwritten cases.
Omni Bridgeway: $10K invested 2015 grew to $18K by 2024 (6% CAGR including dividends). More conservative than Burford; lower returns but fewer blow-ups.
Explore Subcategories
Commercial Litigation Funds
Institutional funds that finance high-value commercial claims and arbitrations.
Law Firm Financing
Credit facilities, case-cost financing, and portfolio funding for law firms.
Pre-Settlement & Consumer Funding
Consumer-focused pre-settlement advances and legal funding platforms.
Tokenized Legal Claims & Marketplaces
Emerging platforms that fractionalise or tokenize legal claims and judgments.