With litigation funding taking on a major role in the legal industry, 2019 can bring with it a number of important industry trends that will help the sector face its challenges in a better way.

Litigation Finance today is no more a way to help clients; the industry has started focusing more on generating profits. With many non-lawyer funders entering into the market, Litigation is now being discovered as a new asset class. Here are a few changes you can expect in the litigation funding industry in 2019:

More entrants to the industry

Many sophisticated law firms have already started providing financing options to their clients. The ones who are not equipped are tying up with trusted funders to increase their opportunities. With more and more entrants launching, the number of dedicated litigation funders can double up in a few months from now. It is going to take a while for the market to get saturated.

The launch of Defense Funding

It is going to take a while for corporate law departments to start offering litigation financing on a consistent basis. But a few innovative and bold companies have already started seeing the benefit of transferring the litigation risk to leading players of the industry. With more and more law firms taking on fixed-fee defense work on a regular basis, it is not going to be too long for defense funding to be launched in the market.

No Initial Disclosure of Funding

It is highly unlikely that the federal advisory committee on civil rules will take any decision about the initial disclosure of litigation funding during the next year. Although a subcommittee has been formed to address this issue, its work is still at early stages.

Self-Regulation

Very soon an association is going to be formed of elite litigation finance companies that will ensure sustainable and ethical litigation funding practices. Not only will this self-regulatory association provide clarity about the issues of control of case strategy, it will also establish the code of best practices to approve settlements and withdraw from cases.

Debate over Portfolio Funding likely to happen

As per rule 5.4(a) the legal fees cannot be shared with a non-lawyer such as a bank or a litigation finance firm. Nevertheless, many law firms have started joining hands with litigation funders to take up commercial cases. The anachronistic and formal readings of this rule are likely to be discussed over a debate during the next year. As per rumors, the New York City Bar has already started re-examining its opinion on this and is getting ready to restate or retract it. Very soon counter-interpretations may be expected.

2018 saw a massive inflow of capital to the industry of litigation finance, which helped many litigants benefit. As per Yellowstone Capital LLC, 2019 will see a more positive growth but in a cautious way. Law firms will start approaching their clients with new financing tools. Funders are likely to come up with newer approaches to defense funding. All in all, it is going to be an exciting year for the litigation finance industry.

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