Lawsuit funding news in late 2025 and 2026 has been dominated by one theme: regulators want to know who is paying for lawsuits. New York enacted the country’s most detailed consumer funding law in December 2025, three bills in Congress would force disclosure of third-party funders in federal cases, Burford Capital has taken a discovery fight to the U.S. Supreme Court, and more than a half-dozen states have passed their own transparency statutes. The money keeps flowing in anyway, with the global market valued at roughly $29 billion in 2026 and projected to reach over $43 billion by 2031.1Mordor Intelligence. Litigation Funding Investment Market Report
New York’s Consumer Litigation Funding Act Takes Effect in June 2026
Governor Kathy Hochul signed the Consumer Litigation Funding Act on December 19, 2025. The law takes effect June 17, 2026, and sets the tightest consumer-side rules any state has adopted.2New York State Senate. S1104A, Consumer Litigation Funding Act The bill, carried by Senator Jeremy Cooney, passed the state Senate unanimously twice.
A funding company’s total recovery is capped at 25% of the consumer’s gross litigation recovery, and charges have to be structured as predetermined amounts tied to time intervals rather than as a percentage of the settlement. Funders must register with the state, post a bond, pass character and fitness evaluations, and write their contracts in plain language. Consumers get 10 business days to cancel without penalty. Funders cannot influence settlement decisions, direct legal strategy, or pay referral fees to attorneys or medical providers. Willful violations carry civil penalties of up to $5,000 per violation and forfeit the funder’s right to collect on the advance.2New York State Senate. S1104A, Consumer Litigation Funding Act
Three Federal Bills Would Force Disclosure of Who Pays for Lawsuits
Senate Judiciary Committee Chairman Chuck Grassley introduced the Litigation Funding Transparency Act (S.3826) on February 11, 2026, alongside Senators Thom Tillis, John Kennedy, and John Cornyn. The bill would require parties in federal mass tort and class action lawsuits to publicly disclose third-party funding arrangements, including any foreign funding. It would also bar funders from influencing litigation strategy or settlement negotiations and from accessing discovery material protected by court orders.3U.S. Senate Committee on the Judiciary. Grassley Proposes Third-Party Litigation Funding Reform, Foreign Reporting Requirements
Rep. Darrell Issa’s Litigation Transparency Act of 2025 (H.R. 1109) goes further, applying to all federal civil litigation rather than only class actions and multidistrict proceedings.4U.S. Chamber of Commerce. Coalition Letter on H.R. 1109, the Litigation Transparency Act of 2025 A third bill, the Protecting Our Courts from Foreign Manipulation Act (H.R. 2675), sponsored by Rep. Ben Cline, would ban foreign governments and sovereign wealth funds from participating in U.S. litigation finance and require the Department of Justice to report on foreign-funded lawsuits in federal courts. H.R. 2675 cleared the House Judiciary Committee in November 2025 and was advancing to the full House as of late 2025.5Office of Congressman Ben Cline. Protecting Our Courts from Foreign Manipulation Act
Outside Congress, the Institute for Legal Reform and Lawyers for Civil Justice submitted a joint proposal in March 2026 to the Federal Civil Rules Advisory Committee that would amend Rule 26(a)(1)(A) to require disclosure of nonparty funders and production of funding agreements at the start of every federal civil case. The proposal is modeled on a local rule already used in the Northern District of California.6Institute for Legal Reform. Uniform Rule for TPLF Disclosure No uniform federal rule exists today, and disclosure practice varies district by district.7Federal Judicial Center. Third-Party Litigation Finance
State Laws Are Multiplying, With Big Differences
Georgia, Kansas, Indiana, Louisiana, Montana, and West Virginia have all passed statutes requiring some form of disclosure, though the specifics vary.8Insurance Business Magazine. 2026 Marks Turning Point in War Against Litigation Financing Montana requires automatic disclosure to opposing parties, the court, and insurers, caps funder recovery at 25%, and prohibits funding by foreign adversaries. Georgia requires disclosure of agreements exceeding $25,000 and makes operating without registration a felony carrying up to five years in prison. Kansas directs that funding agreements be produced to the court for private review. Indiana and Louisiana focus on prohibiting funder influence over litigation decisions. Colorado codified that funding agreements are subject to standard discovery rules. Arizona, effective for actions filed after December 31, 2025, prohibits funding by foreign entities of concern and treats violations as consumer fraud.9Shook, Hardy & Bacon LLP. An Update on State Laws Regulating Third-Party Litigation Funding
Rhode Island is next up. Its Third-Party Litigation Financing Consumer Protection Act (S 2494), introduced in February 2026, would require registration and a $50,000 surety bond, mandate automatic turnover of funding agreements in personal injury cases, and render contracts signed in violation of the law unenforceable.10Rhode Island General Assembly. S 2494, Third-Party Litigation Financing Consumer Protection Act The Alliance for Responsible Consumer Legal Funding, the industry’s largest trade group, has told legislators the automatic disclosure and anti-securitization provisions would eliminate the product rather than regulate it.11Rhode Island General Assembly. ARC Testimony on S2494
Nevada’s existing Chapter 604C remains one of the more detailed consumer funding statutes, capping charges at 40% annually on a simple-interest basis, requiring licensing through the Commissioner of Financial Institutions, and limiting funded amounts to $500,000 per transaction.12Nevada Legislature. NRS Chapter 604C, Consumer Litigation Funding
Burford Capital Takes a Discovery Fight to the Supreme Court
Burford Capital filed a petition for certiorari with the U.S. Supreme Court in May 2026, seeking to overturn a Third Circuit ruling that let a German claims company, financialright claims GmbH, obtain discovery about Burford’s financing of antitrust claims against German truck manufacturers. The question is procedural: whether a federal court already presiding over a matter has jurisdiction to decide motions to compel arbitration under the Federal Arbitration Act. The District of Delaware dismissed Burford’s motions for lack of jurisdiction while granting the discovery request. A divided Third Circuit panel affirmed in October 2025, and the court denied rehearing in January 2026.13Supreme Court of the United States. Burford German Funding LLC Petition for Writ of Certiorari Burford has asked the Court to hold the petition pending its decision in a separate case, Jules v. Andre Balazs Properties.
The Sysco Pork Antitrust Dispute Keeps Resurfacing
One case keeps coming up whenever lawmakers argue that funders exert too much control. In the pork antitrust litigation, Sysco Corp. received over $140 million in funding from Burford Capital under an agreement that gave Burford authority to approve or disapprove settlements. When Sysco’s lawyers reached settlements Burford considered too low, the funder withheld approval. Sysco filed a complaint in Illinois federal court in March 2023 accusing Burford of trying to improperly influence counsel at Boies Schiller Flexner to block the settlements.14Cornell Law School. Third-Party Litigation Funding Both sides dismissed their claims in June 2023. A federal magistrate judge separately denied Burford’s attempt to substitute one of its affiliates as the plaintiff, ruling that allowing a financier to step into the plaintiff’s shoes to extend litigation for a bigger payout was against public policy.15Association of Corporate Counsel. Third-Party Litigation Funding
Industry critics cite the dispute as evidence that funders put their own returns ahead of plaintiffs. Funding proponents call it an outlier involving an unusually aggressive contract and say most agreements leave settlement control with the client.
The Money Keeps Coming In
North America accounted for nearly 59% of the global litigation funding market in 2025, with the Asia-Pacific region growing fastest at a projected 11.5% annual rate through 2031.1Mordor Intelligence. Litigation Funding Investment Market Report Dominant players include Burford Capital, Omni Bridgeway, Harbour Litigation Funding, Therium Group, and Litigation Capital Management.
Burford reported $872 million in new commitments for its 2025 fiscal year, a 39% jump from the prior year. Longford Capital closed its third fund at $682 million, bringing total assets under management above $1.2 billion, drawing from pension funds, university endowments, foundations, and high-net-worth individuals.16Legal Funding Journal. Longford Capital Raises $682 Million for New Investment Fund Deminor raised approximately $108 million in April 2026, and Bench Walk Advisors has committed over $1.3 billion across more than 250 investments since its 2017 launch.17Chambers and Partners. Litigation Funding 2026
Two structural shifts are reshaping the market. Funders increasingly finance portfolios of cases at the law-firm level rather than backing individual lawsuits, a model that smooths cash flow for firms but raises concerns about funder influence. And post-litigation funding, where investors buy the rights to judgments or arbitral awards to give the winning party immediate cash, is the fastest-growing segment, with a projected annual growth rate of nearly 12% through 2031.1Mordor Intelligence. Litigation Funding Investment Market Report Commercial disputes represented over 93% of funded cases in 2025.
What It Means if You’re a Plaintiff Considering a Cash Advance
Most of the news above involves commercial funding of large lawsuits, but consumer pre-settlement funding is a related product you may encounter if you have a personal injury case pending. These advances are typically non-recourse: if you lose, you owe nothing. The trade-off is cost. Interest rates at reputable firms run between 15% and 20% on a simple-interest basis, and some companies layer on origination fees, usage fees, or compound interest that can multiply what you owe over time.18Annuity.org. Pre-Settlement Funding
Your protections depend on where you live. Nevada caps charges at 40% annually.12Nevada Legislature. NRS Chapter 604C, Consumer Litigation Funding New York’s new law, once effective, ties maximum charges to the military lending rate, caps the funder’s total take at 25% of your gross recovery, and gives you 10 business days to cancel.2New York State Senate. S1104A, Consumer Litigation Funding Act Several other states regulate the product but with different mechanisms, and many states have no specific statute at all. Caps of this kind are generally confined to consumer funding; commercial funding between sophisticated parties is treated as an arms-length deal.
UK Government Moving to Overturn the PACCAR Fallout
The UK’s litigation funding market has been unsettled since the Supreme Court’s 2023 decision in PACCAR, which held that many funding agreements qualified as “damages-based agreements” and were therefore unenforceable. On December 17, 2025, Justice Minister Sarah Sackman announced that the government would introduce legislation to clarify, with prospective effect, that litigation funding agreements are not damages-based agreements.19Dechert LLP. UK Government to Legislate on Litigation Funding The government also accepted the primary recommendations of the Civil Justice Council’s June 2025 report, which called for a new statutory framework, capital adequacy requirements, mandatory anti-money laundering obligations, and mandatory court approval of funding terms in consumer-facing litigation.20Slaughter and May. An Inflexion Point for Litigation Funding A legislative vehicle and timeline have not been set; the government has said legislation will be introduced “when parliamentary time allows.”21Mayer Brown. UK Government to Mitigate Impact of Supreme Court’s 2023 Decision on Litigation Funding in PACCAR In the interim, funders have shifted toward recovery models based on a multiple of their investment, and some investors have begun acquiring equity stakes in law firms as an alternative route to financing portfolios of claims.