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Litigation finance moved further mainstream in 2025, with firms tapping the funding source for areas including mass torts and intellectual property.
Federal efforts to add new regulations stalled, as litigation funding won surprising allies among conservative nonprofits and right-leaning talking heads.
What’s ahead for the $16.1 billion industry in 2026? Will lawmakers finally succeed in adding new rules? Will methods for creatively funding cases expand?
Here are some of the most pressing questions about litigation finance.
Is federal legislation in the offing?
The Chamber of Commerce and others who want more regulation are getting closer to victory.
In June, a bill by Sen. Thom Tillis (R-NC) that taxed litigation finance profits found its way into the Senate version of President Donald Trump’s One, Big Beautiful Bill. It wasn’t until the Senate parliamentarian struck it down that the effort finally failed.
Then in November, US Rep. Ben Cline (R-Va.) introduced the Protecting Our Courts from Foreign Manipulation Act of 2025 (H.R. 2675). That bill barred sovereign wealth funds and foreign governments from funding US lawsuits as a third party—directly or indirectly—and it required other non-American investors to disclose their participation.
The bill is a direct threat to large litigation funders such as Fortress Investment Group and Burford Capital that have ties to sovereign wealth funds.
The House Judiciary Committee recommended Cline’s bill to the full body, and that is where things stand. The 119th Congress has until Jan. 3, 2027 to act on it.
What will happen? Ahead of contentious mid-term elections, Congress will have its hands full early in the year wrestling with expiring Obamacare subsidies and the prospect of another government shutdown. With every House seat up for election, members will be eager to get home to their districts to campaign.
The window for the Chamber, Tillis, and Cline to get something done on litigation finance will be small.
Will more dollars flow to back offices?
MSOs, or management services organizations, became popular in 2025. In general, they are vehicles for investors to own the administrative parts of law firms—such as accounting, marketing, health benefits—that are exempt from rules requiring lawyer control.
The health and accounting industries popularized the model before it began creeping into law offices.
The MSOs take on a few flavors. Law firms can spin off administrative functions so that outside investors can take stakes, or they can create the functions as separate entities that offer services directly to firms.
Funders including Burford expressed interest in 2025 in forming MSOs. Certum Group announced its acquisition of an MSO in December, and Big Law’s McDermott Will & Schulte said in November it may sell a stake in the firm to outside investors.
There’s no reason to suspect excitement about MSOs will slow down in 2026. When Burford indicated it would explore an MSO, interest in the model “exploded,” according to Trisha Rich at Holland & Knight, who advises on MSO transactions.
If McDermott, or another big law firm, ends up going forward with an MSO, others will likely follow.
Will Burford get its money from Argentina?
Burford has been backing a suit against Argentina for over a decade now. The suit seeks to force the country to repay shareholders of YPF SA, who allege they were burned by Argentina’s 2012 nationalization of the company.
Burford in 2015 acquired the right to pursue the claims for $16.6 million. In 2023, a New York federal judge ruled against Argentina and ordered the country to pay $16 billion.
Argentina appealed. During oral arguments in October, US appeals judges signaled an openness to overturning the massive judgment.
Two of the three judges asked skeptical questions about whether the US district court case that resulted in the massive award, which has now swelled to $18 billion with interest, should have proceeded there. Burford’s shares fell as much as 15% in New York trading during the hearing.
This case has dragged on for years and is unlikely to have a quick resolution. The only guarantee is that Wall Street and legal analysts will closely watch every twist and turn.
Will insurers keep raining on funders’ parade?
Insurers and funders have always had a—well, interesting—relationship.
In 2023, many funders jumped ship and began working for insurance brokerage firms that offered litigation policies. For a while, it seemed that the two spaces would work together. Then in 2024, insurers faced huge losses after cases they insured went bust. Some left the space all together.
This year, some insurance companies became vocal about their disdain for the funding industry. Major insurance companies, including Nationwide Mutual Insurance Co., Liberty Mutual Insurance Co., and Sentry Insurance Co., lobbied on the Tillis litigation finance tax provision, public records showed.
After the provision was removed from the “One Big Beautiful Bill,” the leaders of Chubb Ltd. and Marsh & McLennan Cos. pledged in a Wall Street Journal op-ed to continue fighting the industry.
In 2026, insurers will most likely continue to wage war against the industry. Expect more lobbying, more op-eds decrying the industry, and more pushes for regulation.