Litigation Finance & Legal Claims
Financing legal claims as an asset class — from commercial litigation funds to pre-settlement consumer funding.
Overview
Litigation finance provides capital to plaintiffs or law firms pursuing lawsuits in exchange for a share of settlement/verdict proceeds. Market size: $15B+ global litigation funding (2024), growing 15-20% annually as institutional investors enter. Investment access via: (1) Public litigation funders (Burford Capital, Omni Bridgeway), (2) Litigation finance funds (Bentham IMF, Longford Capital), (3) Crowdfunding platforms (LexShares, Mighty). Returns: 15-30% annual IRR (top quartile funds) driven by 2-5x returns on won cases. Uncorrelated with markets (0.0-0.1 correlation). Risks include adverse judgments, case duration (3-5 years typical), and adverse cost orders. Suitable for sophisticated investors seeking diversification and comfortable with 5-7 year lockups.
Key Benefits
- High returns: 15-30% IRR from successful cases; 2-5x gross returns common on commercial litigation
- Zero correlation: Case outcomes driven by legal merits, not market conditions; perfect portfolio diversifier
- Asymmetric payoff: Limited downside (capital invested) vs. unlimited upside (some verdicts 10-50x investment)
- Growing market: Corporate acceptance increasing; 70% of Fortune 500 use litigation funding (2024 vs. 20% in 2015)
- Professional underwriting: Funds employ experienced litigators to vet cases; 70-80% case approval rate for funded matters
- Inflation protection: Lawsuit awards/settlements grow with inflation; attorneys' fees increase faster than CPI
- Regulatory tailwinds: UK, Australia, Singapore fully legalized; US allowing more disclosure and acceptance
Platform Reviews
In-depth analysis using our three-pillar evaluation framework
Willow Wealth
Yieldstreet raised $1.56B from 28,440 retail investors across 83 SEC-registered SPVs — then rebranded to Willow Wealth, removed a decade of performance data, and reported $208M in investor losses. The IRR they marketed never included the product that 12,503 of those investors actually used.
Burford Capital
NYSE- and LSE-listed equity proxy for commercial litigation finance — $7.5B portfolio, 83% cumulative ROIC, 26% IRR on concluded matters — but the March 2026 YPF Second Circuit reversal and an unremediated internal control weakness are the two facts every investor needs to sit with before buying.
LexShares
LexShares was the first retail litigation finance platform: $125M raised, 140+ cases funded, and a marketed 47% median IRR that made the asset class look extraordinary. A decade later, the platform is in harvest mode and Fund I is tracking roughly 4% net IRR on resolved cases. The investment opportunity is gone. The lesson is still live.
Legalist
Legalist is what LexShares was trying to build and what Burford does at institutional scale — a technology-driven litigation finance manager with $2B AUM, 248 realizations across four funds, and a two-thirds win rate — but it is not accessible to retail or accredited investors. This is institutional only, and the minimum tells you everything you need to know about who it is built for.
Latest Research & Analysis
View All
The Ultimate Guide to Litigation Finance: Investing in Legal Claims as an Asset Class
Explore litigation finance investing, compare fund structures, assess risks, and access legal claims as a diversified alternative asset class.
Tokenized Lawsuits & Initial Litigation Offerings: The 2025 Reality Check
Why ILO tokens failed, how AxiaFunder delivers 23% IRR without blockchain, and what works in fractional legal claims. The 2025 reality check.
The Litigation Finance Access Ladder: Which Vehicle Fits Your Wallet Size?
From $10 Burford stock to $5M private funds: practical guide to accessing litigation finance across every investor profile and wallet size.
Litigation Finance Structures Explained: How PDNs, SPVs & Waterfalls Really Work
Learn how PDNs, SPVs, and waterfall structures control risk, protect capital, and determine actual returns in litigation finance.
Liquidity in Legal Assets: The Rise of the Litigation Finance Secondary Market
How secondary trading is solving litigation finance's illiquidity problem: LP stake sales, direct portfolio deals, NAV facilities, and why discounts to NAV exist.
Appellate Monetization: How Judgment Holders Convert Trial Wins Into Immediate Capital Before the Appeal Is Decided
Learn how appellate monetization works: non-recourse advances on verdicts, pricing drivers, reversal risk, duration, and collection underwriting.
Accessing Litigation Finance
Start with Public Litigation Funders
Burford Capital (BUR.L) is largest public funder; $6B AUM, 15-20% historical returns. Trades on London Stock Exchange. Minimum 1 share (~$12-15). Diversified portfolio (100+ cases) reduces binary risk. More liquid than private funds. Alternative: Omni Bridgeway (ASX: OBL).
Explore Litigation Finance Funds
Bentham IMF, Longford Capital, Parabellum Capital offer institutional litigation funds. Minimums $100K-$1M (accredited only). Target 15-25% net IRR. 5-7 year lockups. Diversified portfolios (20-50 cases) across commercial, IP, antitrust, international arbitration. For sophisticated investors.
Consider Crowdfunding for Single Cases
LexShares offers fractional investment in pre-vetted lawsuits. Minimums $5K-$25K per case. Target 2-3x returns over 3-5 years. Binary outcomes: Case wins = 100-300% return; loss = total loss. Diversify across 10-15 cases to mimic fund portfolio. Higher risk than institutional funds.
Understand Case Types and Returns
Commercial litigation (breach of contract, IP infringement): Lower returns (15-25% IRR) but higher success rates (60-70%). Antitrust, securities fraud: Higher returns (25-35% IRR) but lower success rates (40-50%). Personal injury: Fast resolution (1-2 years) but lower returns (10-15% IRR). Choose based on risk tolerance.
Litigation Finance Risks
Important considerations before investing in litigation finance & legal claims
- Adverse judgments: 30-40% of cases lose at trial; total loss of capital invested (no partial recovery)
- Duration uncertainty: Cases take 3-5 years average; 10+ years for complex matters; capital locked up with no intermediate returns
- Adverse cost orders: UK/Australia systems require losing party to pay winner's costs; can result in losses exceeding investment
- Appeal risk: Winning at trial doesn't guarantee payout; appeals take 2-4 additional years and can reverse judgments
- Settlement pressure: Defendants use time/cost pressure to force low settlements; 60-70% of cases settle (not all at full value)
- Correlation with legal environment: Tort reform, caps on damages, pro-defendant judges reduce litigation value
- Concentration risk: Single-case funding = binary outcome; even funds can have concentration (Burford's Petersen case = 40% of portfolio)
- Opacity: Private funds and single cases lack transparency; difficult to assess risk until case concludes
Due Diligence Checklist
- Check win rate: Top funders win 65-75% of cases; <60% win rate = poor underwriting or excessive risk-taking
- Assess portfolio diversification: Funds should hold 20-50 cases; <10 cases = concentration risk; single-case investments extremely risky
- Verify case type: Commercial litigation safer (60-70% win rates) than mass torts or securities fraud (40-50% win rates)
- Understand fee structure: Most funds take 2-3x gross returns; attorneys take 30-40%; net to investors often 50-60% of gross recovery
- Review historical returns: Top quartile funds deliver 20-30% IRR; median funds 10-15% IRR; bottom quartile often negative after fees
- Check case merit: Platforms should provide detailed case summaries; if unable to understand legal theory, don't invest
- Assess jurisdiction: Delaware, New York favorable to plaintiffs; Texas, certain California courts more defendant-friendly
- Evaluate duration: Personal injury cases resolve faster (1-3 years) than commercial (3-7 years); longer duration = lower IRR despite similar gross returns
Real-World Examples
Burford Capital (2010-2024): $10K invested in IPO grew to $45K (11.5% CAGR including dividends). Outperformed S&P 500 in some periods; volatile (stock down 50% in 2019 on short-seller report).
LexShares case (anonymized): $50K invested in IP infringement case (2019). Case settled $8M (2022). Investor received $140K (2.8x gross return, 40% IRR over 3 years).
Burford's Petersen case: Invested $17M (2016) in Argentine YPF expropriation. Won $16B judgment (2020). Burford's share: $6B+ (300x+ return). Single case drove 40% of fund returns 2019-2022.
Failed case example: $25K invested in securities fraud case (2018). Case dismissed on summary judgment (2020). Total loss. Illustrates binary risk even for well-underwritten cases.
Omni Bridgeway: $10K invested 2015 grew to $18K by 2024 (6% CAGR including dividends). More conservative than Burford; lower returns but fewer blow-ups.
Explore Subcategories
Commercial Litigation Funds
Institutional funds that finance high-value commercial claims and arbitrations.
Law Firm Financing
Credit facilities, case-cost financing, and portfolio funding for law firms.
Pre-Settlement & Consumer Funding
Consumer-focused pre-settlement advances and legal funding platforms.
Tokenized Legal Claims & Marketplaces
Emerging platforms that fractionalise or tokenize legal claims and judgments.