Litigation funding investment market outlook (2023-2033)


## **Introduction**

The world of litigation funding investment is witnessing a meteoric rise, with revenues projected to reach an impressive US$ 17,160.8 million in 2023. The demand for litigation funding investment is on a rapid upswing, expected to grow at a Compound Annual Rate (CAR) of 9.6%, reaching a staggering US$ 43,048.3 million by 2033. This surge is driven by the increasing need for litigation financing among claimants, owing to the escalating legal costs and the growing interest of individuals and organizations in leveraging litigation investment as a viable means of generating profits.

## **Opportunities prevailing in the litigation funding investment industry**

### Portfolio financing gaining traction among investors

Portfolio financing is swiftly gaining popularity among investors, propelling the adoption of litigation funding investment. As investors recognize the potential for diversification and risk mitigation through a portfolio approach, they are more inclined to participate in the litigation funding landscape.

### Favorable regulatory framework and growing presence of litigation funders

The industry's growth is also attributed to the supportive regulatory framework for lawsuit finance, fostering a conducive environment for litigation funders to operate. Moreover, the increasing presence of litigation funders in various nations is enhancing accessibility to such funding options for claimants.

### Mitigating short-term financing impact on businesses

Businesses face the challenge of short-term financing that can adversely affect their financial statements. To address this issue, many companies are turning to litigation funding as a strategic tool to mitigate the impact, enabling them to focus more on their core operations.

### Global expansion opportunities

The proliferation of litigation fund providers across the globe and the rise in high-value legal disputes involving multiple countries are paving the way for significant market expansion. As a result, the industry is witnessing a surge in opportunities for growth and development.

### Diversification across jurisdictions and fields

Major firms are capitalizing on the potential for worldwide growth by expanding their investment reach across different jurisdictions and fields. This strategic move allows them to tap into a broader market and explore diverse investment possibilities.

## **Market trends influencing the demand for litigation funding investment**

### Embracing ethical and legal complexities

Litigation funders are navigating the intricate landscape of moral and legal complexities surrounding their ventures. By consulting ethics experts, keeping abreast of legal developments, and carefully assessing the ethical and legal implications of each investment, they ensure ethical and responsible practices.

### Growing interest in less-risky asset classes

Business verticals specializing in litigation funding investment are increasingly financing claims in less-risky asset classes. As a result, banks and hedge financing businesses are expected to witness substantial growth by 2033, contributing to the overall expansion of the market.

### Law firms boosting financial commitments

Law firms are making significant financial commitments to bolster their involvement in specific cases. Investments in areas such as jury selection, simulated trials, and discovery are becoming more common. The surge in large tort claims, necessitating substantial financial backing from plaintiffs' attorneys, has further fueled the market's growth, witnessing a remarkable increase of 1.07× between 2022 and 2023.

![](<https://hedonova.b-cdn.net/Hedonova%20images/%20All%20Hedonova%20blogs/Litigation%20funding%20investment%20market%20outlook%20(2023-2033)/3-min-1-.webp>)

## **Comparing historical and future trends in the litigation funding investment market (2018 to 2022 vs 2023 to 2033)**

Over the past few years, there has been significant growth in the adoption of litigation funding investment. The market valuation increased from US$ 11,876.1 million in 2018 to US$ 15,889.7 million in 2022, showing a notable annual growth rate of 7.5% during that period.

While Western countries have been using this type of funding extensively, emerging markets like India are also witnessing rapid adoption. Litigation funders are looking for well-diversified investment portfolios that cover various risks and potential rewards.

Looking ahead, the industry is expected to continue expanding as plaintiffs, law firms, and financiers explore innovative ways to balance the costs of litigation with favorable outcomes. In recent years, this kind of financing has found significant use in the United States market, and both general counsel and attorneys anticipate its increased usage in commercial litigation.

## **The forecast period indicates a potential incremental opportunity of US$ 25,887.5 million for the market.**

### The future outlook of the litigation funding investment industry

In the ever-evolving landscape of technology and customer preferences, attorneys now face increased pressure to achieve profitability. To win over potential clients, attorneys are emphasizing cost-effectiveness and flexibility in their services.

Litigation finance has emerged as a valuable resource, providing attorneys with greater flexibility and a role-playing environment to cater to their clients' specific needs. This has enabled lawyers to come up with more innovative, practical, and client-centric solutions with the support of litigation finance.

The industry is poised for significant growth, with a projected Compound Annual Growth (CAG) rate of 9.6% by 2033. The increased awareness of litigation finance has led to a strong surge in capital investments, contributing to the expansion of the industry. Moreover, investors are increasingly using lawsuit funding to invest in other asset classes, further bolstering the growth of the litigation funding investment business.

### Comparative view of the market

![](<https://hedonova.b-cdn.net/Hedonova%20images/%20All%20Hedonova%20blogs/Litigation%20funding%20investment%20market%20outlook%20(2023-2033)/litigation-funding-investment-market-_-min.webp>)

![](<https://hedonova.b-cdn.net/Hedonova%20images/%20All%20Hedonova%20blogs/Litigation%20funding%20investment%20market%20outlook%20(2023-2033)/micro-investing-platform-market-_-min.webp>)

![](<https://hedonova.b-cdn.net/Hedonova%20images/%20All%20Hedonova%20blogs/Litigation%20funding%20investment%20market%20outlook%20(2023-2033)/mobile-money-market-_-min-1-.webp>)

### Regional analysis

As of 2022, North America held the leading market share with 27.3%, thanks to the region's favorable regulatory framework for lawsuit financing. Key players in the market offered efficient software and a wide range of cutting-edge services, driving the demand for litigation funding.

The growth in this region was fueled by the increasing adoption of portfolio finance trends among investors and the rising demand for litigation funding investments from end-users.

- In the United States, the litigation finance industry was vast and intricate, with numerous investors and service providers competing for clients. The United States market dominated the industry with a share of 17.3% in 2022.
- The United States government was one of the most common sources of funding for legal proceedings. However, it was crucial to conduct due diligence on potential lawsuit financing providers before making any financial commitments.
- To make informed investment decisions, it was essential to analyze and monitor the progress of your litigation funding investment. Keeping a close eye on the development of your investment was key to its success.

### Asia pacific market grows with emerging economies

![](<https://hedonova.b-cdn.net/Hedonova%20images/%20All%20Hedonova%20blogs/Litigation%20funding%20investment%20market%20outlook%20(2023-2033)/2-min.webp>)

In 2021, China emerged as a significant revenue contributor in the Asia Pacific region, capturing 40% of the overall market share, surpassing Japan and South Korea. Litigation finance has attracted interest from private equity companies, institutional investors, and high-net-worth individuals who seek investment alternatives.

Investor interest in funding litigation cases in India has experienced a surge, mainly due to the potential for lucrative returns that are not correlated with standard asset classes.

### **The European market shows high potential in the litigation funding investment sector**

In 2022, the region exhibited significant growth, commanding a market share of 21.2%.

![](<https://hedonova.b-cdn.net/Hedonova%20images/%20All%20Hedonova%20blogs/Litigation%20funding%20investment%20market%20outlook%20(2023-2033)/1-min.webp>)

The demand in the United Kingdom for litigation funding is primarily driven by the needs of various industries, supported by government assistance. Litigation-based financing is widely accepted in all UK courts, providing a favorable environment for such funding practices. The presence of a Code of Conduct for Lawsuit Funders further ensures that participants and fund managers adhere to best practices.

Regulation in the UK is overseen by the Association of Litigation Funders, providing additional assurance to those seeking funding through lawsuit finance. Furthermore, the industry is expected to witness significant growth due to the emergence of new start-ups leveraging cutting-edge technologies like artificial intelligence to forecast potential claims. This technological advancement is likely to propel the industry throughout the region.


 The demand for litigation funding investment is on a rapid upswing, expected to grow at a Compound Annual Rate (CAR) of 9.6%, reaching a staggering US$ 43,048.3 million by 2033. 

Litigation funding investment market outlook (2023-2033)

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