Federal Study Of Third-Party Litigation Funding Reveals Maturing And Growing Markets, Lack Of Transparency, And Scarce Regulation

At the end of 2022, the U.S. Government Accountability Office (GAO) released a report, Third-Party Litigation Financing: Market Characteristics, Data and Trends.

Defining third-party litigation financing or funding (TPLF) as ‘an arrangement in which a funder who is not a party to the lawsuit agrees to help fund it,’ the investigative arm of Congress looked at the global multibillion-dollar industry, which is raising concerns among insurers and some lawmakers.

The GAO findings summarize emerging trends, challenges for market participants, and the regulatory landscape, primarily focusing on the years between 2017 and 2021.

The agency conducted this research to study gaps in public information about the industry’s practices and examine transparency and disclosure concerns.