Acknowledging both the industry’s global growth and the resurgence of critiques from those opposed to third-party funding, Validity Finance’s CEO offers his perspective on expectations for the litigation finance industry in 2023.
An LFJ Conversation with Michael Kelley, Partner, Parker Poe
Acknowledging both the industry’s global growth and the resurgence of critiques from those opposed to third-party funding, Validity Finance’s CEO offers his perspective on expectations for the litigation finance industry in 2023.
In an opinion piece for Bloomberg Law, Ralph Sutton, founder and CEO of Validity Finance, argues that whilst U.S. funders have already expanded to major cities nationwide, he expects that funders will soon look to set up operations in smaller cities, including Denver, Palo Alto and Seattle. Importantly, Sutton notes that these locations will not see the same level of high-value cases that funders are used to reviewing in New York, but will add significant volume to bolster returns.
Sutton also spotlights the increasingly important role that insurance is playing in the litigation finance space, predicting that this year will see more brokers emerge, and similarly, that there will be parallel growth in new tailored insurance products that funders will utilize. In addition to the tighter relationship between funders and insurers, Sutton suggests that funders will look to bolster their strategic relationships with law firms that go beyond the provision of capital, by providing value through portfolio structures.
Finally, Mr Sutton emphasizes the need for broader education and awareness around the use of funding and its technical intersections with the existing legal structure, both for existing legal professionals, but equally importantly at the law school level.
