“Third-party litigation financing” refers to a variety of techniques by which persons or entities other than the party itself, the party’s counsel, or a related source of financing are tapped to fund the significant costs of litigation, whether court costs and out-of-pocket disbursements or legal fees. In the United States, the issue has been controversial. It is a hotly discussed topic of late.
Lawyers, academics and pundits of various kinds have expressed views ranging from unbridled enthusiasm to unequivocal condemnation, as usual, with most landing somewhere in between. Critics of third-party litigation financing have depicted it as a deceptively dangerous practice that appears “too good to be true,”1 while actually posing “substantial risks of litigation abuse.”2
