Article · Litigation

Somebody Else Is Paying for This Lawsuit: How Litigation Finance Actually Works

26 U.S.C. § 104

Type
Article
Jurisdiction
National
Date
2026-01-27
Topic
Litigation

Money has entered civil litigation from outside the case, and it has changed how cases are financed, valued, and settled. This article explains the three distinct markets that get called litigation finance and why conflating them causes confusion. It covers the doctrines that used to prohibit outside funding and what remains of them. It covers the disclosure fight over whether the other side gets to know who is paying. It then turns to structured settlements, the factoring industry that buys them, and the court approval requirement that stands between a payee and a very bad deal.

Somebody Else Is Paying for This Lawsuit: How Litigation Finance Actually Works

Litigation > Litigation Finance and Structured Settlements | Published 27 January 2026 - Updated 28 March 2026 | UpLaw - uplaw.us

Three different things with one name

"Litigation finance" gets used for three markets that share almost nothing beyond the fact that a stranger to the dispute puts money in.

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