A Cooling US Market, Not a Closed Door: What Westfleet’s Latest Report Means for Litigation Funding

The latest “Insider” report from Westfleet Advisors offers a timely snapshot of the US litigation funding market—but its implications reach far beyond a single jurisdiction. The trends identified will feel familiar to lawyers and claimants alike: a more cautious funding environment, increased scrutiny, and shifting dynamics between funders and their investors.

The full report can be read here, but its findings show in statistics some of the difficulties the funding market has been facing in the past year and more. Critics of litigation funding continue to lobby legislatures, calls for regulation in the USA and beyond continue, and unexpectedly long case and enforcement durations continue to disrupt funder strategies. As reported by Westfleet, these factors taken cumulatively have had a chilling effect on funders, and so they report funders facing significant challenges in fundraising from their own investors, several funders entering a wind-down phase where they take on no new investments, and only one new funder entrant to the US market in 2025.

The trickle-down effect for lawyers and their clients is obvious – funders are necessarily becoming more cautious in their underwriting of cases, and so there is potentially a higher bar to obtaining funding. The message is clear: case presentations need to be thorough and comprehensive, with an accurate and well-considered budget and properly defensible quantum valuations. Funding is still available for strong cases – and Erso remains in a competitive position with capital to invest- but lawyers would be well-advised to prepare for a rigorous due diligence phase across the market before funding can be secured.

While the data points to a more constrained and selective market, it would be wrong to read this as a retreat from litigation funding altogether. Rather, the market is recalibrating. Strong cases, presented well, continue to attract capital.

For lawyers and claimants, the takeaway is practical: preparation matters more than ever. A disciplined, well-evidenced approach to case strategy, budgeting, and quantum will not only withstand increased scrutiny—it will stand out.

At Erso Capital, we continue to active deploy capital and are engaging with opportunities globally. In a market that is becoming more discerning, that creates space for well-prepared cases—and for funders (who have capital) ready to back them.

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