The financing of commercial litigation has grown enormously since it first appeared on the scene in the US, about 15 years ago.  While still small relative to the overall US financial market, it is estimated that more than $11 billion has been invested in litigation finance in the US last year alone.  In essence, lenders (often referred to as “funders”) provide commercial claimants and contingency law firms with the capital needed to prosecute legal claims which the funders believe have a strong likelihood of success.  Funders receive a return based upon, and typically conditioned upon, a successful conclusion of the litigation.  The use of litigation funding by bankruptcy practitioners is a growing phenomenon and one that we see as an increasingly important element in how bankruptcy-related litigation is managed.
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