Court Delays May Grow Lawsuit Funders’ Returns, or Spur Disputes

Some litigation finance firms are telling investors coronavirus-related court delays could boost returns, but others in the industry see new potential for disputes as the overall balance of power slides more toward law firms and clients, emboldening them to try to keep more funds for themselves.

Litigation funders make money when the cases they invest in are resolved. And they typically earn higher returns as cases drag on, which plenty will do as the coronavirus pandemic causes widespread court delays and closures.

But as billions of dollars have rushed into the industry, litigation funders are competing to win deals more ...