Segmentation By Type (Commercial Litigation, International Arbitration, Bankruptcy Claim and Others); By Enterprise Size (SMEs and Large Enterprises) and By End Users (BFSI, Manufacturing, IT & Telecommunication, Media & Entertainment, Healthcare and Others) - Global Demand Analysis And Opportunity Outlook 2028
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By Type
The global litigation funding investment market is segmented on the basis of type into commercial litigation, international arbitration, bankruptcy claim, and others. The commercial litigation segment holds a major part of the market, accounted for USD 6,342.5 million in 2019 and is expected to grow at a CAGR of 8.58% during the forecast period. Commercial litigation includes all the types of cases that can ascend in a business context such as joint venture or partnership disputes, business torts, breach of contract cases, class actions and others. International arbitration takes place before private adjudicators that are called arbitrators. This is a consensual private, neutral and binding means of dispute resolution on an international scale. International arbitration is faster and less expensive proceeding compared to domestic court proceedings. In a bankruptcy claim segment, there is little cash for the debtor to pay legal associates in order to recover their assets or the damages against the company during the company’s descent into bankruptcy, the only option for the creditors is the successful resolution of claims.
By Enterprise Size
Based on enterprise size, the global litigation funding investment market is segmented into large enterprises and small & medium-sized enterprises (SMEs). The large enterprises segment held a major part of the global litigation funding investment market and accounted for USD 8,614.2 million in 2019. Large organizations hold the major part on the back of a rising number of litigation cases they have to fight owing to a huge service or product portfolio along with their global presence. The fast growth of the small & medium-sized enterprises (SMEs) segment can be attributed to the emergence of new start-up companies in the litigation funding investment market. These start-ups, which are basically core technology companies, use specifically developed algorithms in order to evaluate the risks.
By End Users
The global litigation funding investment market is segmented by end users into BFSI, manufacturing, IT & telecommunications, media & entertainment, healthcare, and others. The BFSI segment is leading the global litigation funding investment market, accounting for USD 3,374.3 million in 2019 and is expected to grow up to USD 6814.6 Million by the end of 2028. The media & entertainment segment is estimated to grow at a fast pace during the forecast period on account of rising cases of trademark and copyright infringements across the industry. Moreover, the rising cases of medical malpractice are anticipated to drive the demand for litigation funding in the healthcare sector.
The global litigation funding investment market is segmented on the basis of region into North America, Latin America, Europe, Asia Pacific and Middle East & Africa. The North America litigation funding investment market is estimated to witness significant growth over the forecast period owing to the growing acceptance of innovative litigation funding software and services. The North America litigation funding investment market accounted for USD 6,303.4 million in 2019 and is anticipated to reach USD 13,708.8 million by 2028, at a CAGR of 9.19% over the forecast period. Europe is currently one of the leading regions in the global litigation funding investment market backed by the growing demand for litigation funding investment across different segments. Despite third-party funding being a new development in the region, past several years have witnessed an increase in the new entrants to the litigation funding investment market along with a growth in the number of cases funded. Among the countries in Europe, the market in Germany is anticipated to hold the largest market share of 23.75% by the end of 2028. On the other hand Asia Pacific litigation funding investment market is expected to grow at a fast pace over the forecast period.
The study further incorporates Y-O-Y Growth, demand & supply and forecast future opportunity in North America (United States, Canada), Latin America (Brazil, Mexico, Argentina, Rest of LATAM), Europe (U.K., Germany, France, Italy, Spain, Hungary, BENELUX [Belgium, Netherlands, Luxembourg], NORDIC [Norway, Denmark, Sweden, Finland], Poland, Russia, Rest of Europe), Asia-Pacific (China, India, Japan, South Korea, Malaysia, Indonesia, Taiwan, Hong Kong, Australia, New Zealand, Rest of Asia-Pacific), Middle East and Africa (Israel, GCC [Saudi Arabia, UAE, Bahrain, Kuwait, Qatar, Oman], North Africa, South Africa, Rest of Middle East and Africa). CLICK TO DOWNLOAD SAMPLE REPORT
Growth Indicators
Increasing Number Of Lawsuit Funders Across The Globe
The increasing number of lawsuit funders across various countries along with the growing number of high valued legal disputes that involve multiple jurisdictions, anticipates to sketch out a profitable roadmap for the litigation funding investment market during the forecast period. Major players across the litigation funding investment market are diversifying the range of jurisdictions & matters that they invest in and are working on building a global capacity. On the heels of the expansion of funding companies, funders are opening offices across the globe.
Benefits Offered By Litigation Funding
Litigation funding is primarily used to reduce the impact of the short-term finances on the organization. When a litigation funder or combination of law firm and funder covers the litigation costs, the financial statements of the organization remain unaffected. This enables the legal department to pursue the claim without pushing resources away from the core business. This benefit offered by litigation funding that enables the organization to focus on their core business and is anticipated to drive the demand for litigation funding investment across the globe during the forecast period.
Challenges
The Cost Of Investments Is Huge When Considering The Risk To The Funders
The funders take a large cut of the claimed amount in exchange for covering the funded costs, on account of the non-recourse nature of litigation funding i.e. if the company loses the case, they owe nothing to the funder. Majority of the organizations that have knowledge about litigation prefer to finance themselves, rather than to give away a huge portion of the proceeds.
Some of the prominent industry leaders in the global litigation funding investment market are Apex Litigation Finance, Augusta Ventures Ltd., Burford Capital LLC, Woodsford Litigation Funding Ltd., Omni Bridgeway, Harbour Litigation Funding Ltd., Deminor, Balance Legal Capital LLP, and others.
In 2023, market players might incur losses due to huge gap in currency translation followed by contracting revenues, shrinking profit margins & cost pressure on logistics and supply chain.
Controlling Inflation has become the first priority for global economies from last quarter of 2022 and to be followed in 2023. With skewed economic situations, rise in interest rate by governments to control spending and inflation, spiked oil and gas prices, high inflation, geo-political issues including U.S. & China trade war, Russia-Ukraine conflict to intensify the global economic issues.
The interest rates in the U.S. may be less sensitive in 2023 as compared to 2022; sigh of relief for businesses. Positive business sentiments, healthy business balance sheets, growth in construction spending (private construction value in 2022 stood at $1,429.2 billion, 11.7 percent (±1.0 percent) above the $1,279.5 billion spent in 2021, Residential construction in 2022 was $899.1 billion, up by 13.3 percent (±2.1 percent) from $793.7 billion in 2021, non-residential construction touched $530.1 billion, 9.1 percent (±1.0 percent) above the $485.8 billion in 2021.) showcases minimal impact of recession in the country.
Similarly, spiked spending in the European and major Asia economics including, India, China & Japan to showcase less impact on the global demand.
Ans: Increasing number of lawsuit funding organizations across the globe and benefits offered by litigation funding is one of the major factors anticipated to drive the market growth.
Ans: The market is anticipated to attain a CAGR of 8.76% over the forecast period, i.e. 2020-2028.
Ans: The major players in the market are Apex Litigation Finance Ltd., Augusta Ventures, Burford Capital LLC, Woodsford Litigation Funding Ltd., Omni Bridgeway, Harbour Litigation Funding Ltd., Deminor, Balance Legal Capital LLP, and others.
Ans: The company profiles are selected based on the revenues generated from segments, geographical presence of the company which determine the revenue generating capacity as well as the new products being launched into the market by the company.
Ans: The litigation funding investment market is majorly segmented by type, enterprise size, end users, and by region.
Ans: The cost of investments and the presence of unclear rules are estimated to act as barriers to the growth of the market.
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