Class action demand will see litigation funding market double

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Rising litigation demand for class actions will see the litigation funding market, while heavily developed already, double within the next five years, according to Phoenix Advisors’ UAE-based Legal Ventures’ Dilip Massand.

Massand said depending on the jurisdiction, litigation funding was either about to become, or already is, a mainstream asset class.

“What is clear is the direction of travel: litigation finance is now undeniably emerging as a mainstream asset in its own right on a global level,” he said.

Massand said the Australian market was set to grow, and while the US currently accounts for around 40 per cent of all litigation funding, it too is expected to see significant growth. The UK was a considerably smaller region, but was still a highly attractive region for litigation funders given it was home to over 200 law firms.

Aside from the growing reach of the sector, Massand said the market itself has enormous potential for growth on a global scale as ongoing and increasing regulatory reforms open the litigation funding market in many more regions, including Singapore and Hong Kong.

“Most recently, significant discussion is taking place in India about the role litigation funding can play in making the resolution of domestic cases more efficient and providing access to justice for those who otherwise might not be able to afford it,” he said.

According to Massand, the asset class was uncorrelated to traditional capital markets, which allowed for greater portfolio diversification, and had historically provided investors with “outsized returns”, and a greater liquidity.

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