DSP Insurance Insights

Third-party litigation funding (TPLF), also known as legal funding, third-party litigation finance, or alternative litigation financing, involves a third party investing in a lawsuit and receiving a percentage of the proceeds if the lawsuit is successful. TPLF can benefit both individual and corporate claimants. While the exact figures are uncertain due to the lack of transparency in this practice, Swiss Re, an insurance company, estimates that the global TPLF market will reach $30 billion by 2028, with the United States being the largest market. Swiss Re also reports that TPLF investments have recently generated internal rates of return of 25% or higher. As the prevalence of TPLF continues to rise, it is crucial to understand this trend and its implications.