Insights & Resources

Let the Big Law AI arms race begin. Kirkland & Ellis, America’s largest and most profitable law firm, announced last week that it’s investing $500 million to build its own artificial intelligence platform. Kirkland’s bet is that proprietary AI will give it an edge over rivals stuck with off-the-shelf tools such as Harvey and Legora. Expect a handful of Kirkland’s wealthy peers to make similar bets. But for most US law firms, the AI race is a contest they won’t win because it’s a contest they’re effectively prohibited from entering. Law firms can’t raise outside capital the way other businesses do. Legal ethics rules—specifically Rule 5.4 of the Model Rules of Professional Conduct—ban firms from raising equity financing or sharing fees with non-lawyers. Those rules explain why not a single law firm, not even Kirkland & Ellis with its $10 billion in annual revenue, is publicly traded on any stock exchange. No surprise, then, that Kirkland said it would fund its AI platform from its own revenues rather than through a third-party investment. Rule 5.4 cuts law firms off from the capital markets. In nearly every other industry, robust capital markets allow small upstarts to vie with large-scale incumbents, producing healthy competition that lowers prices and improves quality. While Rule 5.4 hurts all law firms, it gives a comparative advantage to larger, wealthier law firms like Kirkland that can self-finance long-term investments. And it gives a courtroom advantage to the larger, wealthier businesses that can afford those law firms’ rates. The stakes are about nothing less than access to justice: who gets legal representation, and who is left standing outside the courthouse gates. Our civil justice system has long been plagued by an affordability and access crisis. According to New York University Law School, as many as 90% of Americans show up to state court without a lawyer. Even those individuals and small businesses who can afford a lawyer are often outmatched by better-resourced litigation opponents. The promise of “Equal Justice Under Law,” emblazoned across the façade of the US Supreme Court, is out of reach for too many. Promising market solutions have recently emerged. The capital restrictions that prevent firms from matching Kirkland’s bet are the same ones these emerging reforms are designed to dismantle. The Arizona Supreme Court in 2020 eliminated its version of Rule 5.4 allowing for alternative business structures, or ABS, where law firms can accept equity investment from non-lawyers. The court explained that the program was “rooted in the idea that entrepreneurial lawyers and nonlawyers would pilot a range of different business forms” to improve access to justice. Stanford researchers concluded in 2025 that individual consumers and small businesses are the prime beneficiaries of an ABS framework. ABS structures would allow firms to obtain third-party capital to invest in AI and other projects. A second innovation is the managed services organization, or MSO, which permits law firms to subcontract non-legal services and receive cash investments in ways that are consistent with Rule 5.4. Some firms, including McDermott Will & Emery, are exploring partnerships with MSOs to obtain third-party capital infusions they can deploy toward AI and other long-term investments. Certain MSOs, like ours at Certum Group, maintain full-stack development teams that are already building proprietary AI and other technological tools, providing smaller firms with cutting-edge capabilities that were traditionally available only to the largest firms. And then there is third-party litigation finance, where outside investors fund the fees and costs of litigation in exchange for a share of any recovery. Third-party funding enables plaintiffs and their lawyers to prosecute meritorious cases regardless of their resources. Funders also can provide non-recourse working capital to claimholders, allowing them to better compete not just in the courthouse but in the marketplace, as Suneal Bedi of Indiana University and I recently argued in the Southern California Law Review. Each of these innovations rests on the same premise: Market forces can bring third-party capital to law firms and their clients, enabling the “have nots” to obtain better results. They allow firms to invest in their clients and in themselves, equipping both to succeed in the courtroom and the market square. These innovations also share something else: sustained opposition. California, Colorado, and Illinois advancing bills to limit the ability of ABSs and MSOs to serve those states’ citizens. Third-party litigation finance has long been a target of some federal and state lawmakers. A failed provision in last year’s federal reconciliation bill would have imposed an industry-crippling excise tax of more than 40% on litigation funding returns. Critics argue that third-party investment will undermine attorney independence. This is an important concern. But as Arizona recognized when it eliminated Rule 5.4, other professional responsibility rules already preserve that independence. Legal scholarship, including work I have done with Brian Fitzpatrick of Vanderbilt Law School, suggests that third-party finance will improve rather than undermine the attorney-client relationship. The cost of legal prohibitions on third-party finance is borne by the litigant who can’t find a lawyer willing to take a meritorious case because no firm can afford the risk. It’s borne by the small business that settles a legitimate claim because it cannot match its opponent’s litigation budget. And it’s borne by the party who shows up to an eviction hearing, a custody dispute, or a debt collection action without counsel—facing an adversary who has it. Kirkland’s announcement is a preview of where the legal market is headed: A world where only the largest firms can self-finance the technology that will define competitive advantage for a generation. AI and third-party investment can close that gap and expand access to justice—but only if policymakers let them. This article was originally published on June 4, 2026, on Bloomberg Law and is available here . Copyright 2026 Bloomberg Industry Group, Inc. (800-372-1033) www.bloombergindustry.com. Reproduced with permission.

MLex, a LexisNexis publication covering global regulatory intelligence, recently interviewed and quoted Certum Group’s William Marra in an article examining the U.S. International Trade Commission’s proposed rule that would require disclosure of third-party litigation funding in Section 337 patent investigations. The proposed rule, published in the Federal Register on April 30, 2026, would require parties and intervenors in Section 337 investigations to disclose certain entities that provide funding or hold approval rights over litigation or settlement decisions. The ITC stated that the proposal is intended to identify conflicts of interest, clarify whose rights are at issue, and promote settlement and transparency. Comments are due June 29, 2026. Marra expressed concerns about the asymmetrical nature of the proposed disclosure requirements. While the rule would reach third-party litigation funding, it would not require disclosure of personal loans, bank loans, insurance funding, or contingent fee arrangements. “If you want to have a rule requiring the disclosure of third-party finance… it is more appropriate to have a rule requiring the disclosure of any and all forms of third-party finance,” Marra told MLex, including contingency-fee arrangements. Marra argued that selectively targeting only certain forms of funding creates an uneven playing field. “To the extent that you have disclosure rules that are targeted only at specific forms of third-party funding and not others, you are going to give certain parties a strategic advantage or disadvantage,” he said. “We have nothing to hide. We don’t want to give the other side of litigation a strategic advantage.”  Marra also highlighted the outsized burden that overly broad disclosure requirements can impose on smaller parties. “TPLF disclosure tends to impose a burden disproportionately on small- and medium-sized enterprises,” he said, drawing on arguments he made in a recent co-authored article in the Southern California Law Review . The full MLex article is available here .

We tend to view regulation and litigation as wholly separate enterprises. But federal regulatory agencies have always operated alongside private civil litigation, with each supplying functions the other cannot. Agencies set prospective standards and monitor compliance at scale. Litigation responds to concrete harm, remedying often unanticipated—or minimized—risks. Prior posts in this series traced the procedural mechanics of mass aggregation —from the equitable origins of representative litigation through Rule 23 to the modern MDL—and explained why those mechanisms exist as a structural response to the access failures of bilateral litigation . This post addresses a related but distinct question: Why private enforcement matters not just as a substitute for bilateral litigation, but as a necessary complement to public regulation. This symbiotic dynamic has held for decades, and an examination of that history underscores the importance of mass tort litigation as a regulatory backstop. The Structural Limits of Administrative Oversight The relationship between regulatory agencies and private litigation is complementary rather than redundant. Even at full capacity, administrative agencies face structural constraints that limit their effectiveness as enforcement mechanisms. The resource gap is the most straightforward. Regulated industries consistently outspend the agencies that oversee them. The pharmaceutical industry employs scientists, lawyers, and regulatory specialists whose collective depth of knowledge exceeds what any federal agency can match across its full portfolio of regulated products. An agency charged with monitoring thousands of products and reviewing hundreds of new applications annually necessarily operates with inherent informational disadvantages relative to the firms it oversees. The capture problem is more subtle but no less significant. Regulatory agencies are staffed, in significant part, by individuals who move between government service and the industries they regulate . This is not an indictment of those individuals—it reflects the reality that domain expertise concentrates in the private sector. But it nonetheless creates structural pressures that shape enforcement priorities in ways that do not always align cleanly with public interests. The latency problem is perhaps the most consequential. Pre-market approval is a snapshot, not an ongoing guarantee. An agency that approves a pharmaceutical compound based on clinical trial data cannot know what population-scale, long-term use will reveal. Post-market surveillance is resource-intensive and chronically underfunded . Harms that emerge years or decades after initial regulatory clearance may never trigger administrative enforcement action. These are not new problems. They have characterized the administrative state for decades, and they are precisely why private litigation has long served as a necessary counterpart to administrative enforcement. The Opioid Crisis: What Happens When Regulation Falls Short The opioid epidemic illustrates—at enormous human cost—what happens when regulatory oversight fails to keep pace with private-sector harm, and what private enforcement can accomplish when it fills the gap. The FDA approved OxyContin in 1995 based on clinical data that did not capture the addiction potential of mass-market, long-duration prescribing. Regulators, empowered to act against manufacturers and distributors flooding suspicious channels, were slow to exercise that authority at scale. State medical boards, operating in an environment shaped by industry-funded campaigns redefining pain management standards, did not flag prescribing patterns that, in hindsight, were plainly problematic. By the time the regulatory apparatus mobilized a meaningful response, hundreds of thousands of Americans had died. The tens of billions of dollars in settlements and judgments that followed came not through administrative action but through litigation— state attorneys general, municipalities, and private plaintiffs coordinated in MDL proceedings—that forced production of internal documents demonstrating what manufacturers and distributors knew and when they knew it. That information entered the public record through discovery. It informed subsequent regulatory responses, shaped public health policy, and produced one of the largest coordinated public health settlements in American history. PFAS and the Limits of Pre-Market Review Per- and polyfluoroalkyl substances—PFAS, or “forever chemicals”—illustrate a different dimension of the same structural problem. Manufacturers possessed internal research suggesting health risks associated with certain PFAS compounds for decades before that information became public. The EPA, constrained by the evidentiary standards of the Toxic Substances Control Act and facing significant industry opposition, did not set enforceable drinking water limits for the most common PFAS compounds until 2024 —roughly seventy years after their widespread industrial introduction. Private litigation, brought by communities near manufacturing facilities, military bases, and industrial sites, has produced more actionable information about PFAS health effects than decades of administrative process. Discovery in PFAS proceedings has surfaced internal documents , epidemiological data, and risk assessments that were never voluntarily disclosed. Those materials have informed subsequent regulatory action and generated the factual record on which ongoing public health policy depends. This is the information function of private litigation operating precisely as it should: Reaching into corporate decision-making in ways that administrative oversight either cannot compel or has not yet prioritized. Social Media and the Enforcement Frontier The current mass tort litigation against social media platforms for harms to adolescent mental health illustrates how private enforcement operates at the frontier of regulatory capacity. Congress has repeatedly attempted and failed to pass legislation governing platform design, algorithmic amplification, and the targeting of minors. The FTC’s authority is potentially applicable but has not been deployed at scale. The regulatory frameworks needed to establish clear standards remain, years into public awareness of the problem, largely unbuilt. Into that gap have stepped coordinated proceedings in federal MDL and state courts, alleging that platform features were designed with internal knowledge of their addictive potential and their disproportionate effects on adolescent development. Whatever the ultimate resolution of those cases, the litigation has already begun forcing into the public record information about internal product decisions and user research that no regulatory proceeding has yet reached. In March 2026, a California jury found Meta and YouTube liable for negligent platform design, rejecting both Section 230 and First Amendment defenses—the first bellwether verdict to hold platforms accountable for design-based harms to adolescents. Private enforcement is not a substitute for thoughtful legislation. But it is filling the gap that legislation has not occupied. The social media cases are, it should be noted, the most legally contested example in this series. Unlike pharmaceutical or chemical exposure litigation, platform liability claims must navigate Section 230’s broad immunity provisions and First Amendment questions that the opioid and PFAS cases did not present. The ultimate merits of these cases may differ from the prior examples. But even litigation that does not ultimately succeed forces into the public record information that regulatory silence cannot reach—and that distinction matters regardless of outcome. The Practical Consequence of a Smaller Administrative Footprint The structural argument for private enforcement as a complement to regulation is well-established. What fluctuations in agency capacity add is urgency.  Regulation and private litigation each supply what the other cannot. Regulation operates ex ante , setting prospective standards based on information available at approval. Litigation operates ex post , responding to harm that has materialized with discovery tools that can reach information never voluntarily shared. Regulation generalizes across industries; litigation develops facts specific to individual defendants and affected populations. Where these functions operate in tandem, the enforcement system is more complete. Where one contracts, the other must bear more weight. When agency enforcement capacity declines—whether through budget reductions, staff attrition, or shifts in enforcement priorities—the civil justice system is not simply one option among several. For many categories of diffuse harm, it becomes the only remaining mechanism capable of generating accountability. Companies that externalize costs onto the public face reduced administrative scrutiny. The deterrence effect of potential enforcement weakens. The information that litigation forces into the public record, and that regulators themselves have often relied upon, is no longer generated. One need not have a settled view on the optimal scope of the administrative state to recognize this dynamic. The practical question is not whether federal agencies should be larger or smaller. It is whether, given the enforcement landscape that actually exists, the civil justice system is equipped to do the work that system requires. Conclusion The debate over federal regulatory scope will continue, as it should. Reasonable people hold genuine disagreements about the appropriate role of administrative agencies, and those disagreements deserve serious engagement. But the institutions available to enforce safety norms and produce corporate accountability do not wait for that debate to resolve. When the administrative footprint contracts, courts and private litigation occupy the space. Mass tort aggregation, as this series has argued from the beginning, is not a procedural anomaly or an artifact of plaintiff-side opportunism. It is a structural feature of how diffuse harm gets addressed in a system where regulation has never been sufficient on its own. That function does not become less important when regulatory capacity declines. It becomes more so. Oliver Wendell Holmes once observed that “[t]he life of the law has not been logic: it has been experience.” The Common Law 1 (1881). The experience of the opioid epidemic, the decades of PFAS contamination, and the accumulating evidence of adolescent harm from platform design all point to the same structural lesson: Regulation and private enforcement are not competitors in an institutional zero-sum game. They are partners in an enforcement system that neither can sustain alone. The debate about their proper balance will continue. But dismissing private enforcement as mere opportunism ignores what experience has consistently shown: When private enforcement is absent, no one else fills the gap.

Class action litigators who practice in the BIPA space received clarity in April 2026 following the Seventh Circuit Court of Appeals’ decision in Clay v. Union Pacific Railroad Co. (“Clay”).[1] In a concise 17-page opinion, the court held that the Illinois General Assembly’s 2024 BIPA amendments, which established that BIPA damages should be evaluated on a per-person basis, should be applied retroactively to cases pending at the time of enactment. This decision is a setback for plaintiffs’ counsel who had invested heavily—in time and resources—in BIPA litigation as the next major vehicle for class action recovery. An overview of how we got here is below followed by a summary of the decision. History of BIPA In 2008, Illinois enacted the Biometric Information Privacy Act to respond to the “increasing use of biometric data in commerce.”[2] BIPA was intended to give individuals the right to control their biometric identifiers and information while providing a right of action and meaningful damages against entities that mishandled them. But one question quickly came to the fore: was a new claim accruing each and every time an employer collected the same information from the same employee? As one defendant argued, such a per-scan theory of claim accrual would create “potentially crippling financial liability” for employers who violate BIPA by “repeatedly collecting the same information in the same way.”[3] Recognizing the question’s importance, the Seventh Circuit, in Cothron v. White Castle System, Inc., certified the question of claim accrual to the Supreme Court of Illinois. During briefing, the defendant invoked Section 20—which sets the damages a plaintiff can recover “for each violation”—to dissuade the court from adopting its per-scan reading of Section 15, citing potentially astronomical awards. In a 2023 decision, the Illinois Supreme Court sided with the plaintiffs and held that pursuant to Section 15, claims accrue “with every scan or transmission” of biometric information.[4] The Illinois Supreme Court acknowledged the prospect of “potentially excessive damage awards,” but noted that concern is “best addressed by the legislature.”[5] Accordingly, the court concluded its opinion by “respectfully suggest[ing] that the legislature review these policy concerns and make clear its intent regarding the assessment of damages under the Act.”[6] The Illinois General Assembly Acts Less than a year and a half after Cothron, the Illinois General Assembly heeded the court’s call and passed an amendment that added two clauses to Section 20. The first provided that any entity that collects biometric information “in more than one instance… from the same person using the same method of collection in violation of subsection (b) of Section 15 has committed a single violation…for which the aggrieved person is entitled to, at most, one recovery under this Section.[7] The second added the same operative language for violations of Section 15(d).[8] Going forward, it was now clear that only “one recovery” was available per person (regardless of how many scans there were), transforming potentially excessive damages into more modest ones. But the legislature left one question open: should the amendments apply retroactively to cases already in progress? The Clay Decision According to the Seventh Circuit, Illinois courts have a simple decision tree when it comes to assessing retroactivity. First, did the legislation expressly indicate the temporal reach of the amendment? If yes, case closed. If not, then the court must assess whether the amendment in question constituted a substantive or procedural change to the law. Under Illinois law, a substantive amendment “prescribes the rights, duties, and obligations of persons to one another as to their conduct or property and … determines when a cause of action for damages or other relief has arisen.”[9] Conversely, a procedural amendment involves the “rules that prescribe the steps for having a right or duty judicially enforced, as opposed to the law that defines the specific rights or duties themselves.”[10] While the Clay court acknowledged that the distinction between the two can, in many different contexts, “be unclear,”[11] the court had no trouble deciding the case at bar for one simple reason: the “amendment to BIPA Section 20 is a remedial change,”[12] and “the Supreme Court of Illinois treats remedial changes as procedural, not substantive.”[13] Two features of the amendments were critical: First, the legislature located the amendments in Section 20, which governs liquidated damages, rather than Section 15, which sets the substantive standards for liability under the Act. Second, the amendments’ plain language “focuses on remedies,”[14] indicating that an “aggrieved person is entitled to, at most, one recovery under this Section.”[15] The court’s analysis was straightforward. For those BIPA litigants involved in currently pending cases, the litigation terrain just got bumpier for plaintiffs and more favorable for defendants. Plaintiffs’ settlement leverage in these cases has been significantly reduced. Nevertheless, with enough putative class members, BIPA cases could still be worth bringing, even if they are no longer as valuable. We will continue to monitor the ramifications of this decision. Notes: [1] No. 25-2185 (7th Cir. Apr. 1, 2026). [2] Id. at 3. [3] Id. [4] Cothron v. White Castle System, Inc., 216 N.E.3d at 921 (Ill. 2023). [5] Id. at 929. [6] Id. [7] 740 ILCS 14/20(b). [8] Id. at 14/20(c). [9] Perry v. Dept. of Fin. & Prof. Regulation, 106 N.E.3d 1016, 1034 (Ill. 2018). [10] Id. [11] Clay at 8. [12] Id. at 9. [13] Id. at 8. [14] Id. at 10. [15] 740 ILCS 14/20(b), (c) (emphasis added).

The International Legal Finance Association (ILFA) submitted a letter this week to the Civil Procedural Rules Committee of the Supreme Court of Pennsylvania, highlighting the benefits of litigation funding and the risks associated with the mandatory disclosure of funding. The Supreme Court of Pennsylvania is considering a rule that would require mandatory disclosure at the outset of litigation of third-party funding agreements where the funder has a right to control or influence the litigation. ILFA’s letter emphasized that the vast majority of courts—including Pennsylvania courts—have declined to require discovery of funding agreements, in part because such disclosure would breach work product and attorney-client privilege protections. The ILFA letter also emphasized that the leading studies of disclosure by state courts—performed in Delaware and Texas—both concluded that third-party funding does not present significant ethical issues warranting automatic disclosure of funding at the outset of litigation. The full text of ILFA’s letter is available here .

Lawdragon, a leading independent legal research company, has recognized six Certum Group professionals to its 2026 Lawdragon 100 Global Leaders in Litigation Finance. The Guide recognizes the leading practitioners in the field of legal risk assessment and litigation funding. The six members of the Certum team recognized were Patrick Dempsey , Joel Fineberg , Dean Gresham , William Marra , Tyler Perry , and Kirstine Rogers .  Certum was recognized for a breadth of offerings, including not only litigation finance but also the range of Certum’s insurance offerings including litigation buyout and judgment preservation insurance. Lawdragon also profiled Marra as part of its 2026 rankings, highlighting his ability to “assess legal claims as assets and create pathways forward to pay lawyers to win strong cases.” The full rankings list is available here.

Litigation funding is no longer novel, but for many law firms it remains unfamiliar. A significant number of the firms we work with— including large and sophisticated practices—are engaging with a litigation funder for the first or second time. When firms ask how best to navigate these relationships, our guidance consistently centers on three principles: Confidentiality, Conflicts of Interest, and Control . Addressed early and thoughtfully, these issues help preserve the integrity of the lawyer-client relationship while allowing funding arrangements to function as intended. Confidentiality To get your case funded, you’ll likely need to share certain confidential case information with a funder. (For an overview of what you’d want to include in a memo requesting funding, see this article with helpful tips.) Before sharing confidential information, lawyers must ensure they have their client’s informed consent. Ethical rules—including ABA Model Rules of Professional Conduct, Rule 1.6 and its state analogues—generally prohibit disclosure of client confidential information absent client authorization or implicit authorization arising from the representation. Once client consent is obtained, counsel should enter into a non-disclosure agreement with each funder before sharing substantive information. While the absence of an NDA does not mean that a defendant can obtain information shared with a funder—and courts generally deny discovery into litigation funding—NDAs remain an important tool for protecting confidentiality and reducing the risk of later discovery disputes. For an overview of what’s in an NDA, see this article on the subject). Best Practice Tip: Consider addressing litigation funding explicitly in engagement letters, including advance authorization to share confidential information with funders at the client’s direction. Conflicts of Interest Litigation funding should not create conflicts between a law firm and its client. While the lawyer-client relationship is paramount, it often overlaps with economic arrangements—hourly fees, contingency fees, or hybrid structures—whether or not funding is involved. For that reason, many claimholders elect to retain independent deal counsel to negotiate funding agreements. These negotiations frequently involve corporate, tax, and financial issues that fall outside the core expertise of trial counsel. Separating deal negotiation from litigation strategy can help preserve alignment and avoid conflicts. Best Practice Tip: Claimholders should consider using independent counsel—rather than litigation counsel—to negotiate funding agreements. Control In funded cases, claimholders retain control over litigation strategy and settlement decisions. Many regulatory proposals and court disclosure rules focus on whether a funder has approval rights over such decisions, reflecting the principle that third-party funding should not compromise attorney independence. For example, court rules in the District of New Jersey and disclosure requirements imposed by Chief Judge Connolly in the District of Delaware require disclosure of whether a third party has approval rights over litigation or settlement decisions. While funders are entitled to information about case developments—and may retain limited termination rights in circumstances such as fraud or material breach—they do not direct litigation or settlement strategy. Best Practice Tip: Clearly memorialize the funder’s lack of control rights in both the funding agreement and the engagement letter, using language that mirrors applicable disclosure rules where appropriate. Beyond the Basics: Building Successful Partnerships Beyond these core principles, successful partnerships between law firms and litigation funders depend on: Early Engagement: Involving funders early in case evaluation can provide valuable insights and streamline the funding process. Transparency: Regular conversations among counsel, client, and funder create alignment without compromising control. Realistic Expectations: Understanding the typical funding process timeline and requirements helps manage client expectations.

Litigation is inherently complex, dynamic, and increasingly expensive. Outcomes are difficult to predict, shaped by variables ranging from jurisdiction and judge to opposing counsel, discovery disputes, and motion practice that often unfolds in unexpected ways. In a volatile economic environment, forecasting the cost of a case can feel more like art than science. Yet budgeting remains one of the most important—and most overlooked—components of successful litigation. In the litigation finance context, budgets do more than estimate costs. They establish the financial architecture of a case. Funders commit a capped amount of capital for legal fees and case expenses. Law firms allocate resources within that constraint—and are typically responsible for any legal fees incurred above the budget. Meanwhile, claimholders are typically responsible for case expenses incurred above the budget, while their ultimate recoveries may depend on how closely spending tracks expectations.  A budget that is too optimistic risks early depletion of funds. A budget that is overly conservative may deter funding altogether or unnecessarily suppress a client’s net recovery. Sound budgeting, by contrast, allows a case to be litigated through key inflection points—and, if necessary, to conclusion—without surprises that undermine strategy or alignment. Why Litigation Budgeting Is Hard—and Essential Despite its importance, budget creation is rarely taught in law school and is often learned only through experience. Most lawyers work on an hourly fee without a capped budget. Thus many excellent litigators have spent years trying cases without ever being required to forecast costs across an entire lifecycle. Litigation finance forces that discipline early. A funding request typically requires counsel to articulate not only the merits of a claim, but also the cost required to prosecute it and the relationship between spend, risk, and expected recovery. A commonly used rule of thumb is that expected damages should substantially exceed the amount of requested funding. While a 10:1 ratio is often the proposed rule of thumb, a meaningful spread between potential recovery and projected spend helps ensure that funders can achieve target returns, clients can realize meaningful net recoveries, and law firms can be compensated for their work without undue financial strain. What a Litigation Budget Typically Covers In funded matters, budgets generally distinguish between legal fees and case expenses , often with separate caps for each. Legal fees reflect hourly rates and anticipated staffing across phases of the case. Funders may cover a portion of those fees up to a cap, with law firms responsible for the balance and for any spend exceeding agreed limits. Expenses typically include items such as expert witnesses, discovery vendors, travel, local counsel, and court costs. These expenses are often funded at a higher percentage, again subject to caps. Clear allocation of responsibility above those caps is essential to avoid disputes later in the case. Core Questions That Drive Realistic Budgets Effective budgets begin with a clear understanding of the case itself. Among the most important questions: Scope of the case. How many claims are asserted? Are they tightly focused or sprawling? Nature of the claims . Certain claims—such as antitrust or patent matters in federal court—are typically more resource-intensive than straightforward commercial disputes. Jurisdictional considerations . Venue, procedural rules, and potential jurisdictional challenges can materially affect cost and duration. Damages theory and collectability . How will damages be proven? Are there risks to collection? Are non-monetary outcomes possible? Expected defense strategy . Will the defendant pursue aggressive motion practice or discovery tactics designed to increase cost and delay? Staffing model . What mix of partners, associates, and specialists is optimal at each stage? Time to resolution . Is the case likely to resolve early, or should it be budgeted through trial and appeal? Discovery: The Largest Variable Discovery is often the single largest expense—and the hardest to predict. When budgeting for discovery, it is critical to consider: The scope of discovery permitted in the jurisdiction The volume and sources of potentially relevant documents The complexity of collection, review, and production The number and location of depositions The need for expert testimony, often among the most expensive components of a case The availability and accessibility of key witnesses Thoughtful planning at this stage can materially reduce cost without compromising litigation objectives. The Role of Funders in Budget Discipline Experienced funders can play a constructive role in budget management—not by directing litigation strategy, but by helping track spend against expectations and flagging deviations early. Regular reporting and periodic check-ins allow counsel and clients to address emerging issues before they become financial problems. Funders also bring cross-case experience across jurisdictions, industries, and claim types that can inform contingency planning and resource allocation. Tips for Creating and Sticking to Budgets Effective litigation budgets are not static documents. They are management tools—designed to impose discipline, anticipate inflection points, and align incentives as cases evolve. In practice, several mechanisms can help law firms and clients create budgets that are both realistic and durable: Budget precedents . Where available, budgets from comparable matters—whether maintained by the law firm or the funder—can provide a valuable reality check. Historical data from similar cases often reveals cost drivers that are easy to underestimate in the abstract. Monthly flat-fee structures . Some firms have moved away from pure “fees-as-incurred” models in favor of monthly flat fees. When appropriately calibrated, this approach can smooth cash flow for the firm during slower periods while reducing the risk of budget overruns during more intensive phases of litigation. Staged funding . Staging capital by phase—such as through a motion to dismiss, summary judgment, or trial—can help ensure that spending remains tied to progress and performance. Phase-based caps encourage early reassessment without forcing premature strategic decisions. Reallocation flexibility . In some cases, budgets permit limited reallocation between categories, such as legal fees and expenses. When used carefully, this flexibility can accommodate unforeseen developments without requiring wholesale renegotiation of the budget. Taken together, these tools reinforce what effective budgeting is ultimately about: creating a financial structure that supports the litigation strategy, rather than constraining it.

Let the Big Law AI arms race begin. Kirkland & Ellis, America’s largest and most profitable law firm, announced last week that it’s investing $500 million to build its own artificial intelligence platform. Kirkland’s bet is that proprietary AI will give it an edge over rivals stuck with off-the-shelf tools such as Harvey and Legora. Expect a handful of Kirkland’s wealthy peers to make similar bets. But for most US law firms, the AI race is a contest they won’t win because it’s a contest they’re effectively prohibited from entering. Law firms can’t raise outside capital the way other businesses do. Legal ethics rules—specifically Rule 5.4 of the Model Rules of Professional Conduct—ban firms from raising equity financing or sharing fees with non-lawyers. Those rules explain why not a single law firm, not even Kirkland & Ellis with its $10 billion in annual revenue, is publicly traded on any stock exchange. No surprise, then, that Kirkland said it would fund its AI platform from its own revenues rather than through a third-party investment. Rule 5.4 cuts law firms off from the capital markets. In nearly every other industry, robust capital markets allow small upstarts to vie with large-scale incumbents, producing healthy competition that lowers prices and improves quality. While Rule 5.4 hurts all law firms, it gives a comparative advantage to larger, wealthier law firms like Kirkland that can self-finance long-term investments. And it gives a courtroom advantage to the larger, wealthier businesses that can afford those law firms’ rates. The stakes are about nothing less than access to justice: who gets legal representation, and who is left standing outside the courthouse gates. Our civil justice system has long been plagued by an affordability and access crisis. According to New York University Law School, as many as 90% of Americans show up to state court without a lawyer. Even those individuals and small businesses who can afford a lawyer are often outmatched by better-resourced litigation opponents. The promise of “Equal Justice Under Law,” emblazoned across the façade of the US Supreme Court, is out of reach for too many. Promising market solutions have recently emerged. The capital restrictions that prevent firms from matching Kirkland’s bet are the same ones these emerging reforms are designed to dismantle. The Arizona Supreme Court in 2020 eliminated its version of Rule 5.4 allowing for alternative business structures, or ABS, where law firms can accept equity investment from non-lawyers. The court explained that the program was “rooted in the idea that entrepreneurial lawyers and nonlawyers would pilot a range of different business forms” to improve access to justice. Stanford researchers concluded in 2025 that individual consumers and small businesses are the prime beneficiaries of an ABS framework. ABS structures would allow firms to obtain third-party capital to invest in AI and other projects. A second innovation is the managed services organization, or MSO, which permits law firms to subcontract non-legal services and receive cash investments in ways that are consistent with Rule 5.4. Some firms, including McDermott Will & Emery, are exploring partnerships with MSOs to obtain third-party capital infusions they can deploy toward AI and other long-term investments. Certain MSOs, like ours at Certum Group, maintain full-stack development teams that are already building proprietary AI and other technological tools, providing smaller firms with cutting-edge capabilities that were traditionally available only to the largest firms. And then there is third-party litigation finance, where outside investors fund the fees and costs of litigation in exchange for a share of any recovery. Third-party funding enables plaintiffs and their lawyers to prosecute meritorious cases regardless of their resources. Funders also can provide non-recourse working capital to claimholders, allowing them to better compete not just in the courthouse but in the marketplace, as Suneal Bedi of Indiana University and I recently argued in the Southern California Law Review. Each of these innovations rests on the same premise: Market forces can bring third-party capital to law firms and their clients, enabling the “have nots” to obtain better results. They allow firms to invest in their clients and in themselves, equipping both to succeed in the courtroom and the market square. These innovations also share something else: sustained opposition. California, Colorado, and Illinois advancing bills to limit the ability of ABSs and MSOs to serve those states’ citizens. Third-party litigation finance has long been a target of some federal and state lawmakers. A failed provision in last year’s federal reconciliation bill would have imposed an industry-crippling excise tax of more than 40% on litigation funding returns. Critics argue that third-party investment will undermine attorney independence. This is an important concern. But as Arizona recognized when it eliminated Rule 5.4, other professional responsibility rules already preserve that independence. Legal scholarship, including work I have done with Brian Fitzpatrick of Vanderbilt Law School, suggests that third-party finance will improve rather than undermine the attorney-client relationship. The cost of legal prohibitions on third-party finance is borne by the litigant who can’t find a lawyer willing to take a meritorious case because no firm can afford the risk. It’s borne by the small business that settles a legitimate claim because it cannot match its opponent’s litigation budget. And it’s borne by the party who shows up to an eviction hearing, a custody dispute, or a debt collection action without counsel—facing an adversary who has it. Kirkland’s announcement is a preview of where the legal market is headed: A world where only the largest firms can self-finance the technology that will define competitive advantage for a generation. AI and third-party investment can close that gap and expand access to justice—but only if policymakers let them. This article was originally published on June 4, 2026, on Bloomberg Law and is available here . Copyright 2026 Bloomberg Industry Group, Inc. (800-372-1033) www.bloombergindustry.com. Reproduced with permission.

MLex, a LexisNexis publication covering global regulatory intelligence, recently interviewed and quoted Certum Group’s William Marra in an article examining the U.S. International Trade Commission’s proposed rule that would require disclosure of third-party litigation funding in Section 337 patent investigations. The proposed rule, published in the Federal Register on April 30, 2026, would require parties and intervenors in Section 337 investigations to disclose certain entities that provide funding or hold approval rights over litigation or settlement decisions. The ITC stated that the proposal is intended to identify conflicts of interest, clarify whose rights are at issue, and promote settlement and transparency. Comments are due June 29, 2026. Marra expressed concerns about the asymmetrical nature of the proposed disclosure requirements. While the rule would reach third-party litigation funding, it would not require disclosure of personal loans, bank loans, insurance funding, or contingent fee arrangements. “If you want to have a rule requiring the disclosure of third-party finance… it is more appropriate to have a rule requiring the disclosure of any and all forms of third-party finance,” Marra told MLex, including contingency-fee arrangements. Marra argued that selectively targeting only certain forms of funding creates an uneven playing field. “To the extent that you have disclosure rules that are targeted only at specific forms of third-party funding and not others, you are going to give certain parties a strategic advantage or disadvantage,” he said. “We have nothing to hide. We don’t want to give the other side of litigation a strategic advantage.”  Marra also highlighted the outsized burden that overly broad disclosure requirements can impose on smaller parties. “TPLF disclosure tends to impose a burden disproportionately on small- and medium-sized enterprises,” he said, drawing on arguments he made in a recent co-authored article in the Southern California Law Review . The full MLex article is available here .

We tend to view regulation and litigation as wholly separate enterprises. But federal regulatory agencies have always operated alongside private civil litigation, with each supplying functions the other cannot. Agencies set prospective standards and monitor compliance at scale. Litigation responds to concrete harm, remedying often unanticipated—or minimized—risks. Prior posts in this series traced the procedural mechanics of mass aggregation —from the equitable origins of representative litigation through Rule 23 to the modern MDL—and explained why those mechanisms exist as a structural response to the access failures of bilateral litigation . This post addresses a related but distinct question: Why private enforcement matters not just as a substitute for bilateral litigation, but as a necessary complement to public regulation. This symbiotic dynamic has held for decades, and an examination of that history underscores the importance of mass tort litigation as a regulatory backstop. The Structural Limits of Administrative Oversight The relationship between regulatory agencies and private litigation is complementary rather than redundant. Even at full capacity, administrative agencies face structural constraints that limit their effectiveness as enforcement mechanisms. The resource gap is the most straightforward. Regulated industries consistently outspend the agencies that oversee them. The pharmaceutical industry employs scientists, lawyers, and regulatory specialists whose collective depth of knowledge exceeds what any federal agency can match across its full portfolio of regulated products. An agency charged with monitoring thousands of products and reviewing hundreds of new applications annually necessarily operates with inherent informational disadvantages relative to the firms it oversees. The capture problem is more subtle but no less significant. Regulatory agencies are staffed, in significant part, by individuals who move between government service and the industries they regulate . This is not an indictment of those individuals—it reflects the reality that domain expertise concentrates in the private sector. But it nonetheless creates structural pressures that shape enforcement priorities in ways that do not always align cleanly with public interests. The latency problem is perhaps the most consequential. Pre-market approval is a snapshot, not an ongoing guarantee. An agency that approves a pharmaceutical compound based on clinical trial data cannot know what population-scale, long-term use will reveal. Post-market surveillance is resource-intensive and chronically underfunded . Harms that emerge years or decades after initial regulatory clearance may never trigger administrative enforcement action. These are not new problems. They have characterized the administrative state for decades, and they are precisely why private litigation has long served as a necessary counterpart to administrative enforcement. The Opioid Crisis: What Happens When Regulation Falls Short The opioid epidemic illustrates—at enormous human cost—what happens when regulatory oversight fails to keep pace with private-sector harm, and what private enforcement can accomplish when it fills the gap. The FDA approved OxyContin in 1995 based on clinical data that did not capture the addiction potential of mass-market, long-duration prescribing. Regulators, empowered to act against manufacturers and distributors flooding suspicious channels, were slow to exercise that authority at scale. State medical boards, operating in an environment shaped by industry-funded campaigns redefining pain management standards, did not flag prescribing patterns that, in hindsight, were plainly problematic. By the time the regulatory apparatus mobilized a meaningful response, hundreds of thousands of Americans had died. The tens of billions of dollars in settlements and judgments that followed came not through administrative action but through litigation— state attorneys general, municipalities, and private plaintiffs coordinated in MDL proceedings—that forced production of internal documents demonstrating what manufacturers and distributors knew and when they knew it. That information entered the public record through discovery. It informed subsequent regulatory responses, shaped public health policy, and produced one of the largest coordinated public health settlements in American history. PFAS and the Limits of Pre-Market Review Per- and polyfluoroalkyl substances—PFAS, or “forever chemicals”—illustrate a different dimension of the same structural problem. Manufacturers possessed internal research suggesting health risks associated with certain PFAS compounds for decades before that information became public. The EPA, constrained by the evidentiary standards of the Toxic Substances Control Act and facing significant industry opposition, did not set enforceable drinking water limits for the most common PFAS compounds until 2024 —roughly seventy years after their widespread industrial introduction. Private litigation, brought by communities near manufacturing facilities, military bases, and industrial sites, has produced more actionable information about PFAS health effects than decades of administrative process. Discovery in PFAS proceedings has surfaced internal documents , epidemiological data, and risk assessments that were never voluntarily disclosed. Those materials have informed subsequent regulatory action and generated the factual record on which ongoing public health policy depends. This is the information function of private litigation operating precisely as it should: Reaching into corporate decision-making in ways that administrative oversight either cannot compel or has not yet prioritized. Social Media and the Enforcement Frontier The current mass tort litigation against social media platforms for harms to adolescent mental health illustrates how private enforcement operates at the frontier of regulatory capacity. Congress has repeatedly attempted and failed to pass legislation governing platform design, algorithmic amplification, and the targeting of minors. The FTC’s authority is potentially applicable but has not been deployed at scale. The regulatory frameworks needed to establish clear standards remain, years into public awareness of the problem, largely unbuilt. Into that gap have stepped coordinated proceedings in federal MDL and state courts, alleging that platform features were designed with internal knowledge of their addictive potential and their disproportionate effects on adolescent development. Whatever the ultimate resolution of those cases, the litigation has already begun forcing into the public record information about internal product decisions and user research that no regulatory proceeding has yet reached. In March 2026, a California jury found Meta and YouTube liable for negligent platform design, rejecting both Section 230 and First Amendment defenses—the first bellwether verdict to hold platforms accountable for design-based harms to adolescents. Private enforcement is not a substitute for thoughtful legislation. But it is filling the gap that legislation has not occupied. The social media cases are, it should be noted, the most legally contested example in this series. Unlike pharmaceutical or chemical exposure litigation, platform liability claims must navigate Section 230’s broad immunity provisions and First Amendment questions that the opioid and PFAS cases did not present. The ultimate merits of these cases may differ from the prior examples. But even litigation that does not ultimately succeed forces into the public record information that regulatory silence cannot reach—and that distinction matters regardless of outcome. The Practical Consequence of a Smaller Administrative Footprint The structural argument for private enforcement as a complement to regulation is well-established. What fluctuations in agency capacity add is urgency.  Regulation and private litigation each supply what the other cannot. Regulation operates ex ante , setting prospective standards based on information available at approval. Litigation operates ex post , responding to harm that has materialized with discovery tools that can reach information never voluntarily shared. Regulation generalizes across industries; litigation develops facts specific to individual defendants and affected populations. Where these functions operate in tandem, the enforcement system is more complete. Where one contracts, the other must bear more weight. When agency enforcement capacity declines—whether through budget reductions, staff attrition, or shifts in enforcement priorities—the civil justice system is not simply one option among several. For many categories of diffuse harm, it becomes the only remaining mechanism capable of generating accountability. Companies that externalize costs onto the public face reduced administrative scrutiny. The deterrence effect of potential enforcement weakens. The information that litigation forces into the public record, and that regulators themselves have often relied upon, is no longer generated. One need not have a settled view on the optimal scope of the administrative state to recognize this dynamic. The practical question is not whether federal agencies should be larger or smaller. It is whether, given the enforcement landscape that actually exists, the civil justice system is equipped to do the work that system requires. Conclusion The debate over federal regulatory scope will continue, as it should. Reasonable people hold genuine disagreements about the appropriate role of administrative agencies, and those disagreements deserve serious engagement. But the institutions available to enforce safety norms and produce corporate accountability do not wait for that debate to resolve. When the administrative footprint contracts, courts and private litigation occupy the space. Mass tort aggregation, as this series has argued from the beginning, is not a procedural anomaly or an artifact of plaintiff-side opportunism. It is a structural feature of how diffuse harm gets addressed in a system where regulation has never been sufficient on its own. That function does not become less important when regulatory capacity declines. It becomes more so. Oliver Wendell Holmes once observed that “[t]he life of the law has not been logic: it has been experience.” The Common Law 1 (1881). The experience of the opioid epidemic, the decades of PFAS contamination, and the accumulating evidence of adolescent harm from platform design all point to the same structural lesson: Regulation and private enforcement are not competitors in an institutional zero-sum game. They are partners in an enforcement system that neither can sustain alone. The debate about their proper balance will continue. But dismissing private enforcement as mere opportunism ignores what experience has consistently shown: When private enforcement is absent, no one else fills the gap.

Class action litigators who practice in the BIPA space received clarity in April 2026 following the Seventh Circuit Court of Appeals’ decision in Clay v. Union Pacific Railroad Co. (“Clay”).[1] In a concise 17-page opinion, the court held that the Illinois General Assembly’s 2024 BIPA amendments, which established that BIPA damages should be evaluated on a per-person basis, should be applied retroactively to cases pending at the time of enactment. This decision is a setback for plaintiffs’ counsel who had invested heavily—in time and resources—in BIPA litigation as the next major vehicle for class action recovery. An overview of how we got here is below followed by a summary of the decision. History of BIPA In 2008, Illinois enacted the Biometric Information Privacy Act to respond to the “increasing use of biometric data in commerce.”[2] BIPA was intended to give individuals the right to control their biometric identifiers and information while providing a right of action and meaningful damages against entities that mishandled them. But one question quickly came to the fore: was a new claim accruing each and every time an employer collected the same information from the same employee? As one defendant argued, such a per-scan theory of claim accrual would create “potentially crippling financial liability” for employers who violate BIPA by “repeatedly collecting the same information in the same way.”[3] Recognizing the question’s importance, the Seventh Circuit, in Cothron v. White Castle System, Inc., certified the question of claim accrual to the Supreme Court of Illinois. During briefing, the defendant invoked Section 20—which sets the damages a plaintiff can recover “for each violation”—to dissuade the court from adopting its per-scan reading of Section 15, citing potentially astronomical awards. In a 2023 decision, the Illinois Supreme Court sided with the plaintiffs and held that pursuant to Section 15, claims accrue “with every scan or transmission” of biometric information.[4] The Illinois Supreme Court acknowledged the prospect of “potentially excessive damage awards,” but noted that concern is “best addressed by the legislature.”[5] Accordingly, the court concluded its opinion by “respectfully suggest[ing] that the legislature review these policy concerns and make clear its intent regarding the assessment of damages under the Act.”[6] The Illinois General Assembly Acts Less than a year and a half after Cothron, the Illinois General Assembly heeded the court’s call and passed an amendment that added two clauses to Section 20. The first provided that any entity that collects biometric information “in more than one instance… from the same person using the same method of collection in violation of subsection (b) of Section 15 has committed a single violation…for which the aggrieved person is entitled to, at most, one recovery under this Section.[7] The second added the same operative language for violations of Section 15(d).[8] Going forward, it was now clear that only “one recovery” was available per person (regardless of how many scans there were), transforming potentially excessive damages into more modest ones. But the legislature left one question open: should the amendments apply retroactively to cases already in progress? The Clay Decision According to the Seventh Circuit, Illinois courts have a simple decision tree when it comes to assessing retroactivity. First, did the legislation expressly indicate the temporal reach of the amendment? If yes, case closed. If not, then the court must assess whether the amendment in question constituted a substantive or procedural change to the law. Under Illinois law, a substantive amendment “prescribes the rights, duties, and obligations of persons to one another as to their conduct or property and … determines when a cause of action for damages or other relief has arisen.”[9] Conversely, a procedural amendment involves the “rules that prescribe the steps for having a right or duty judicially enforced, as opposed to the law that defines the specific rights or duties themselves.”[10] While the Clay court acknowledged that the distinction between the two can, in many different contexts, “be unclear,”[11] the court had no trouble deciding the case at bar for one simple reason: the “amendment to BIPA Section 20 is a remedial change,”[12] and “the Supreme Court of Illinois treats remedial changes as procedural, not substantive.”[13] Two features of the amendments were critical: First, the legislature located the amendments in Section 20, which governs liquidated damages, rather than Section 15, which sets the substantive standards for liability under the Act. Second, the amendments’ plain language “focuses on remedies,”[14] indicating that an “aggrieved person is entitled to, at most, one recovery under this Section.”[15] The court’s analysis was straightforward. For those BIPA litigants involved in currently pending cases, the litigation terrain just got bumpier for plaintiffs and more favorable for defendants. Plaintiffs’ settlement leverage in these cases has been significantly reduced. Nevertheless, with enough putative class members, BIPA cases could still be worth bringing, even if they are no longer as valuable. We will continue to monitor the ramifications of this decision. Notes: [1] No. 25-2185 (7th Cir. Apr. 1, 2026). [2] Id. at 3. [3] Id. [4] Cothron v. White Castle System, Inc., 216 N.E.3d at 921 (Ill. 2023). [5] Id. at 929. [6] Id. [7] 740 ILCS 14/20(b). [8] Id. at 14/20(c). [9] Perry v. Dept. of Fin. & Prof. Regulation, 106 N.E.3d 1016, 1034 (Ill. 2018). [10] Id. [11] Clay at 8. [12] Id. at 9. [13] Id. at 8. [14] Id. at 10. [15] 740 ILCS 14/20(b), (c) (emphasis added).

The International Legal Finance Association (ILFA) submitted a letter this week to the Civil Procedural Rules Committee of the Supreme Court of Pennsylvania, highlighting the benefits of litigation funding and the risks associated with the mandatory disclosure of funding. The Supreme Court of Pennsylvania is considering a rule that would require mandatory disclosure at the outset of litigation of third-party funding agreements where the funder has a right to control or influence the litigation. ILFA’s letter emphasized that the vast majority of courts—including Pennsylvania courts—have declined to require discovery of funding agreements, in part because such disclosure would breach work product and attorney-client privilege protections. The ILFA letter also emphasized that the leading studies of disclosure by state courts—performed in Delaware and Texas—both concluded that third-party funding does not present significant ethical issues warranting automatic disclosure of funding at the outset of litigation. The full text of ILFA’s letter is available here .

Lawdragon, a leading independent legal research company, has recognized six Certum Group professionals to its 2026 Lawdragon 100 Global Leaders in Litigation Finance. The Guide recognizes the leading practitioners in the field of legal risk assessment and litigation funding. The six members of the Certum team recognized were Patrick Dempsey , Joel Fineberg , Dean Gresham , William Marra , Tyler Perry , and Kirstine Rogers .  Certum was recognized for a breadth of offerings, including not only litigation finance but also the range of Certum’s insurance offerings including litigation buyout and judgment preservation insurance. Lawdragon also profiled Marra as part of its 2026 rankings, highlighting his ability to “assess legal claims as assets and create pathways forward to pay lawyers to win strong cases.” The full rankings list is available here.

Litigation funding is no longer novel, but for many law firms it remains unfamiliar. A significant number of the firms we work with— including large and sophisticated practices—are engaging with a litigation funder for the first or second time. When firms ask how best to navigate these relationships, our guidance consistently centers on three principles: Confidentiality, Conflicts of Interest, and Control . Addressed early and thoughtfully, these issues help preserve the integrity of the lawyer-client relationship while allowing funding arrangements to function as intended. Confidentiality To get your case funded, you’ll likely need to share certain confidential case information with a funder. (For an overview of what you’d want to include in a memo requesting funding, see this article with helpful tips.) Before sharing confidential information, lawyers must ensure they have their client’s informed consent. Ethical rules—including ABA Model Rules of Professional Conduct, Rule 1.6 and its state analogues—generally prohibit disclosure of client confidential information absent client authorization or implicit authorization arising from the representation. Once client consent is obtained, counsel should enter into a non-disclosure agreement with each funder before sharing substantive information. While the absence of an NDA does not mean that a defendant can obtain information shared with a funder—and courts generally deny discovery into litigation funding—NDAs remain an important tool for protecting confidentiality and reducing the risk of later discovery disputes. For an overview of what’s in an NDA, see this article on the subject). Best Practice Tip: Consider addressing litigation funding explicitly in engagement letters, including advance authorization to share confidential information with funders at the client’s direction. Conflicts of Interest Litigation funding should not create conflicts between a law firm and its client. While the lawyer-client relationship is paramount, it often overlaps with economic arrangements—hourly fees, contingency fees, or hybrid structures—whether or not funding is involved. For that reason, many claimholders elect to retain independent deal counsel to negotiate funding agreements. These negotiations frequently involve corporate, tax, and financial issues that fall outside the core expertise of trial counsel. Separating deal negotiation from litigation strategy can help preserve alignment and avoid conflicts. Best Practice Tip: Claimholders should consider using independent counsel—rather than litigation counsel—to negotiate funding agreements. Control In funded cases, claimholders retain control over litigation strategy and settlement decisions. Many regulatory proposals and court disclosure rules focus on whether a funder has approval rights over such decisions, reflecting the principle that third-party funding should not compromise attorney independence. For example, court rules in the District of New Jersey and disclosure requirements imposed by Chief Judge Connolly in the District of Delaware require disclosure of whether a third party has approval rights over litigation or settlement decisions. While funders are entitled to information about case developments—and may retain limited termination rights in circumstances such as fraud or material breach—they do not direct litigation or settlement strategy. Best Practice Tip: Clearly memorialize the funder’s lack of control rights in both the funding agreement and the engagement letter, using language that mirrors applicable disclosure rules where appropriate. Beyond the Basics: Building Successful Partnerships Beyond these core principles, successful partnerships between law firms and litigation funders depend on: Early Engagement: Involving funders early in case evaluation can provide valuable insights and streamline the funding process. Transparency: Regular conversations among counsel, client, and funder create alignment without compromising control. Realistic Expectations: Understanding the typical funding process timeline and requirements helps manage client expectations.

Litigation is inherently complex, dynamic, and increasingly expensive. Outcomes are difficult to predict, shaped by variables ranging from jurisdiction and judge to opposing counsel, discovery disputes, and motion practice that often unfolds in unexpected ways. In a volatile economic environment, forecasting the cost of a case can feel more like art than science. Yet budgeting remains one of the most important—and most overlooked—components of successful litigation. In the litigation finance context, budgets do more than estimate costs. They establish the financial architecture of a case. Funders commit a capped amount of capital for legal fees and case expenses. Law firms allocate resources within that constraint—and are typically responsible for any legal fees incurred above the budget. Meanwhile, claimholders are typically responsible for case expenses incurred above the budget, while their ultimate recoveries may depend on how closely spending tracks expectations.  A budget that is too optimistic risks early depletion of funds. A budget that is overly conservative may deter funding altogether or unnecessarily suppress a client’s net recovery. Sound budgeting, by contrast, allows a case to be litigated through key inflection points—and, if necessary, to conclusion—without surprises that undermine strategy or alignment. Why Litigation Budgeting Is Hard—and Essential Despite its importance, budget creation is rarely taught in law school and is often learned only through experience. Most lawyers work on an hourly fee without a capped budget. Thus many excellent litigators have spent years trying cases without ever being required to forecast costs across an entire lifecycle. Litigation finance forces that discipline early. A funding request typically requires counsel to articulate not only the merits of a claim, but also the cost required to prosecute it and the relationship between spend, risk, and expected recovery. A commonly used rule of thumb is that expected damages should substantially exceed the amount of requested funding. While a 10:1 ratio is often the proposed rule of thumb, a meaningful spread between potential recovery and projected spend helps ensure that funders can achieve target returns, clients can realize meaningful net recoveries, and law firms can be compensated for their work without undue financial strain. What a Litigation Budget Typically Covers In funded matters, budgets generally distinguish between legal fees and case expenses , often with separate caps for each. Legal fees reflect hourly rates and anticipated staffing across phases of the case. Funders may cover a portion of those fees up to a cap, with law firms responsible for the balance and for any spend exceeding agreed limits. Expenses typically include items such as expert witnesses, discovery vendors, travel, local counsel, and court costs. These expenses are often funded at a higher percentage, again subject to caps. Clear allocation of responsibility above those caps is essential to avoid disputes later in the case. Core Questions That Drive Realistic Budgets Effective budgets begin with a clear understanding of the case itself. Among the most important questions: Scope of the case. How many claims are asserted? Are they tightly focused or sprawling? Nature of the claims . Certain claims—such as antitrust or patent matters in federal court—are typically more resource-intensive than straightforward commercial disputes. Jurisdictional considerations . Venue, procedural rules, and potential jurisdictional challenges can materially affect cost and duration. Damages theory and collectability . How will damages be proven? Are there risks to collection? Are non-monetary outcomes possible? Expected defense strategy . Will the defendant pursue aggressive motion practice or discovery tactics designed to increase cost and delay? Staffing model . What mix of partners, associates, and specialists is optimal at each stage? Time to resolution . Is the case likely to resolve early, or should it be budgeted through trial and appeal? Discovery: The Largest Variable Discovery is often the single largest expense—and the hardest to predict. When budgeting for discovery, it is critical to consider: The scope of discovery permitted in the jurisdiction The volume and sources of potentially relevant documents The complexity of collection, review, and production The number and location of depositions The need for expert testimony, often among the most expensive components of a case The availability and accessibility of key witnesses Thoughtful planning at this stage can materially reduce cost without compromising litigation objectives. The Role of Funders in Budget Discipline Experienced funders can play a constructive role in budget management—not by directing litigation strategy, but by helping track spend against expectations and flagging deviations early. Regular reporting and periodic check-ins allow counsel and clients to address emerging issues before they become financial problems. Funders also bring cross-case experience across jurisdictions, industries, and claim types that can inform contingency planning and resource allocation. Tips for Creating and Sticking to Budgets Effective litigation budgets are not static documents. They are management tools—designed to impose discipline, anticipate inflection points, and align incentives as cases evolve. In practice, several mechanisms can help law firms and clients create budgets that are both realistic and durable: Budget precedents . Where available, budgets from comparable matters—whether maintained by the law firm or the funder—can provide a valuable reality check. Historical data from similar cases often reveals cost drivers that are easy to underestimate in the abstract. Monthly flat-fee structures . Some firms have moved away from pure “fees-as-incurred” models in favor of monthly flat fees. When appropriately calibrated, this approach can smooth cash flow for the firm during slower periods while reducing the risk of budget overruns during more intensive phases of litigation. Staged funding . Staging capital by phase—such as through a motion to dismiss, summary judgment, or trial—can help ensure that spending remains tied to progress and performance. Phase-based caps encourage early reassessment without forcing premature strategic decisions. Reallocation flexibility . In some cases, budgets permit limited reallocation between categories, such as legal fees and expenses. When used carefully, this flexibility can accommodate unforeseen developments without requiring wholesale renegotiation of the budget. Taken together, these tools reinforce what effective budgeting is ultimately about: creating a financial structure that supports the litigation strategy, rather than constraining it.

Let the Big Law AI arms race begin. Kirkland & Ellis, America’s largest and most profitable law firm, announced last week that it’s investing $500 million to build its own artificial intelligence platform. Kirkland’s bet is that proprietary AI will give it an edge over rivals stuck with off-the-shelf tools such as Harvey and Legora. Expect a handful of Kirkland’s wealthy peers to make similar bets. But for most US law firms, the AI race is a contest they won’t win because it’s a contest they’re effectively prohibited from entering. Law firms can’t raise outside capital the way other businesses do. Legal ethics rules—specifically Rule 5.4 of the Model Rules of Professional Conduct—ban firms from raising equity financing or sharing fees with non-lawyers. Those rules explain why not a single law firm, not even Kirkland & Ellis with its $10 billion in annual revenue, is publicly traded on any stock exchange. No surprise, then, that Kirkland said it would fund its AI platform from its own revenues rather than through a third-party investment. Rule 5.4 cuts law firms off from the capital markets. In nearly every other industry, robust capital markets allow small upstarts to vie with large-scale incumbents, producing healthy competition that lowers prices and improves quality. While Rule 5.4 hurts all law firms, it gives a comparative advantage to larger, wealthier law firms like Kirkland that can self-finance long-term investments. And it gives a courtroom advantage to the larger, wealthier businesses that can afford those law firms’ rates. The stakes are about nothing less than access to justice: who gets legal representation, and who is left standing outside the courthouse gates. Our civil justice system has long been plagued by an affordability and access crisis. According to New York University Law School, as many as 90% of Americans show up to state court without a lawyer. Even those individuals and small businesses who can afford a lawyer are often outmatched by better-resourced litigation opponents. The promise of “Equal Justice Under Law,” emblazoned across the façade of the US Supreme Court, is out of reach for too many. Promising market solutions have recently emerged. The capital restrictions that prevent firms from matching Kirkland’s bet are the same ones these emerging reforms are designed to dismantle. The Arizona Supreme Court in 2020 eliminated its version of Rule 5.4 allowing for alternative business structures, or ABS, where law firms can accept equity investment from non-lawyers. The court explained that the program was “rooted in the idea that entrepreneurial lawyers and nonlawyers would pilot a range of different business forms” to improve access to justice. Stanford researchers concluded in 2025 that individual consumers and small businesses are the prime beneficiaries of an ABS framework. ABS structures would allow firms to obtain third-party capital to invest in AI and other projects. A second innovation is the managed services organization, or MSO, which permits law firms to subcontract non-legal services and receive cash investments in ways that are consistent with Rule 5.4. Some firms, including McDermott Will & Emery, are exploring partnerships with MSOs to obtain third-party capital infusions they can deploy toward AI and other long-term investments. Certain MSOs, like ours at Certum Group, maintain full-stack development teams that are already building proprietary AI and other technological tools, providing smaller firms with cutting-edge capabilities that were traditionally available only to the largest firms. And then there is third-party litigation finance, where outside investors fund the fees and costs of litigation in exchange for a share of any recovery. Third-party funding enables plaintiffs and their lawyers to prosecute meritorious cases regardless of their resources. Funders also can provide non-recourse working capital to claimholders, allowing them to better compete not just in the courthouse but in the marketplace, as Suneal Bedi of Indiana University and I recently argued in the Southern California Law Review. Each of these innovations rests on the same premise: Market forces can bring third-party capital to law firms and their clients, enabling the “have nots” to obtain better results. They allow firms to invest in their clients and in themselves, equipping both to succeed in the courtroom and the market square. These innovations also share something else: sustained opposition. California, Colorado, and Illinois advancing bills to limit the ability of ABSs and MSOs to serve those states’ citizens. Third-party litigation finance has long been a target of some federal and state lawmakers. A failed provision in last year’s federal reconciliation bill would have imposed an industry-crippling excise tax of more than 40% on litigation funding returns. Critics argue that third-party investment will undermine attorney independence. This is an important concern. But as Arizona recognized when it eliminated Rule 5.4, other professional responsibility rules already preserve that independence. Legal scholarship, including work I have done with Brian Fitzpatrick of Vanderbilt Law School, suggests that third-party finance will improve rather than undermine the attorney-client relationship. The cost of legal prohibitions on third-party finance is borne by the litigant who can’t find a lawyer willing to take a meritorious case because no firm can afford the risk. It’s borne by the small business that settles a legitimate claim because it cannot match its opponent’s litigation budget. And it’s borne by the party who shows up to an eviction hearing, a custody dispute, or a debt collection action without counsel—facing an adversary who has it. Kirkland’s announcement is a preview of where the legal market is headed: A world where only the largest firms can self-finance the technology that will define competitive advantage for a generation. AI and third-party investment can close that gap and expand access to justice—but only if policymakers let them. This article was originally published on June 4, 2026, on Bloomberg Law and is available here . Copyright 2026 Bloomberg Industry Group, Inc. (800-372-1033) www.bloombergindustry.com. Reproduced with permission.

MLex, a LexisNexis publication covering global regulatory intelligence, recently interviewed and quoted Certum Group’s William Marra in an article examining the U.S. International Trade Commission’s proposed rule that would require disclosure of third-party litigation funding in Section 337 patent investigations. The proposed rule, published in the Federal Register on April 30, 2026, would require parties and intervenors in Section 337 investigations to disclose certain entities that provide funding or hold approval rights over litigation or settlement decisions. The ITC stated that the proposal is intended to identify conflicts of interest, clarify whose rights are at issue, and promote settlement and transparency. Comments are due June 29, 2026. Marra expressed concerns about the asymmetrical nature of the proposed disclosure requirements. While the rule would reach third-party litigation funding, it would not require disclosure of personal loans, bank loans, insurance funding, or contingent fee arrangements. “If you want to have a rule requiring the disclosure of third-party finance… it is more appropriate to have a rule requiring the disclosure of any and all forms of third-party finance,” Marra told MLex, including contingency-fee arrangements. Marra argued that selectively targeting only certain forms of funding creates an uneven playing field. “To the extent that you have disclosure rules that are targeted only at specific forms of third-party funding and not others, you are going to give certain parties a strategic advantage or disadvantage,” he said. “We have nothing to hide. We don’t want to give the other side of litigation a strategic advantage.”  Marra also highlighted the outsized burden that overly broad disclosure requirements can impose on smaller parties. “TPLF disclosure tends to impose a burden disproportionately on small- and medium-sized enterprises,” he said, drawing on arguments he made in a recent co-authored article in the Southern California Law Review . The full MLex article is available here .

We tend to view regulation and litigation as wholly separate enterprises. But federal regulatory agencies have always operated alongside private civil litigation, with each supplying functions the other cannot. Agencies set prospective standards and monitor compliance at scale. Litigation responds to concrete harm, remedying often unanticipated—or minimized—risks. Prior posts in this series traced the procedural mechanics of mass aggregation —from the equitable origins of representative litigation through Rule 23 to the modern MDL—and explained why those mechanisms exist as a structural response to the access failures of bilateral litigation . This post addresses a related but distinct question: Why private enforcement matters not just as a substitute for bilateral litigation, but as a necessary complement to public regulation. This symbiotic dynamic has held for decades, and an examination of that history underscores the importance of mass tort litigation as a regulatory backstop. The Structural Limits of Administrative Oversight The relationship between regulatory agencies and private litigation is complementary rather than redundant. Even at full capacity, administrative agencies face structural constraints that limit their effectiveness as enforcement mechanisms. The resource gap is the most straightforward. Regulated industries consistently outspend the agencies that oversee them. The pharmaceutical industry employs scientists, lawyers, and regulatory specialists whose collective depth of knowledge exceeds what any federal agency can match across its full portfolio of regulated products. An agency charged with monitoring thousands of products and reviewing hundreds of new applications annually necessarily operates with inherent informational disadvantages relative to the firms it oversees. The capture problem is more subtle but no less significant. Regulatory agencies are staffed, in significant part, by individuals who move between government service and the industries they regulate . This is not an indictment of those individuals—it reflects the reality that domain expertise concentrates in the private sector. But it nonetheless creates structural pressures that shape enforcement priorities in ways that do not always align cleanly with public interests. The latency problem is perhaps the most consequential. Pre-market approval is a snapshot, not an ongoing guarantee. An agency that approves a pharmaceutical compound based on clinical trial data cannot know what population-scale, long-term use will reveal. Post-market surveillance is resource-intensive and chronically underfunded . Harms that emerge years or decades after initial regulatory clearance may never trigger administrative enforcement action. These are not new problems. They have characterized the administrative state for decades, and they are precisely why private litigation has long served as a necessary counterpart to administrative enforcement. The Opioid Crisis: What Happens When Regulation Falls Short The opioid epidemic illustrates—at enormous human cost—what happens when regulatory oversight fails to keep pace with private-sector harm, and what private enforcement can accomplish when it fills the gap. The FDA approved OxyContin in 1995 based on clinical data that did not capture the addiction potential of mass-market, long-duration prescribing. Regulators, empowered to act against manufacturers and distributors flooding suspicious channels, were slow to exercise that authority at scale. State medical boards, operating in an environment shaped by industry-funded campaigns redefining pain management standards, did not flag prescribing patterns that, in hindsight, were plainly problematic. By the time the regulatory apparatus mobilized a meaningful response, hundreds of thousands of Americans had died. The tens of billions of dollars in settlements and judgments that followed came not through administrative action but through litigation— state attorneys general, municipalities, and private plaintiffs coordinated in MDL proceedings—that forced production of internal documents demonstrating what manufacturers and distributors knew and when they knew it. That information entered the public record through discovery. It informed subsequent regulatory responses, shaped public health policy, and produced one of the largest coordinated public health settlements in American history. PFAS and the Limits of Pre-Market Review Per- and polyfluoroalkyl substances—PFAS, or “forever chemicals”—illustrate a different dimension of the same structural problem. Manufacturers possessed internal research suggesting health risks associated with certain PFAS compounds for decades before that information became public. The EPA, constrained by the evidentiary standards of the Toxic Substances Control Act and facing significant industry opposition, did not set enforceable drinking water limits for the most common PFAS compounds until 2024 —roughly seventy years after their widespread industrial introduction. Private litigation, brought by communities near manufacturing facilities, military bases, and industrial sites, has produced more actionable information about PFAS health effects than decades of administrative process. Discovery in PFAS proceedings has surfaced internal documents , epidemiological data, and risk assessments that were never voluntarily disclosed. Those materials have informed subsequent regulatory action and generated the factual record on which ongoing public health policy depends. This is the information function of private litigation operating precisely as it should: Reaching into corporate decision-making in ways that administrative oversight either cannot compel or has not yet prioritized. Social Media and the Enforcement Frontier The current mass tort litigation against social media platforms for harms to adolescent mental health illustrates how private enforcement operates at the frontier of regulatory capacity. Congress has repeatedly attempted and failed to pass legislation governing platform design, algorithmic amplification, and the targeting of minors. The FTC’s authority is potentially applicable but has not been deployed at scale. The regulatory frameworks needed to establish clear standards remain, years into public awareness of the problem, largely unbuilt. Into that gap have stepped coordinated proceedings in federal MDL and state courts, alleging that platform features were designed with internal knowledge of their addictive potential and their disproportionate effects on adolescent development. Whatever the ultimate resolution of those cases, the litigation has already begun forcing into the public record information about internal product decisions and user research that no regulatory proceeding has yet reached. In March 2026, a California jury found Meta and YouTube liable for negligent platform design, rejecting both Section 230 and First Amendment defenses—the first bellwether verdict to hold platforms accountable for design-based harms to adolescents. Private enforcement is not a substitute for thoughtful legislation. But it is filling the gap that legislation has not occupied. The social media cases are, it should be noted, the most legally contested example in this series. Unlike pharmaceutical or chemical exposure litigation, platform liability claims must navigate Section 230’s broad immunity provisions and First Amendment questions that the opioid and PFAS cases did not present. The ultimate merits of these cases may differ from the prior examples. But even litigation that does not ultimately succeed forces into the public record information that regulatory silence cannot reach—and that distinction matters regardless of outcome. The Practical Consequence of a Smaller Administrative Footprint The structural argument for private enforcement as a complement to regulation is well-established. What fluctuations in agency capacity add is urgency.  Regulation and private litigation each supply what the other cannot. Regulation operates ex ante , setting prospective standards based on information available at approval. Litigation operates ex post , responding to harm that has materialized with discovery tools that can reach information never voluntarily shared. Regulation generalizes across industries; litigation develops facts specific to individual defendants and affected populations. Where these functions operate in tandem, the enforcement system is more complete. Where one contracts, the other must bear more weight. When agency enforcement capacity declines—whether through budget reductions, staff attrition, or shifts in enforcement priorities—the civil justice system is not simply one option among several. For many categories of diffuse harm, it becomes the only remaining mechanism capable of generating accountability. Companies that externalize costs onto the public face reduced administrative scrutiny. The deterrence effect of potential enforcement weakens. The information that litigation forces into the public record, and that regulators themselves have often relied upon, is no longer generated. One need not have a settled view on the optimal scope of the administrative state to recognize this dynamic. The practical question is not whether federal agencies should be larger or smaller. It is whether, given the enforcement landscape that actually exists, the civil justice system is equipped to do the work that system requires. Conclusion The debate over federal regulatory scope will continue, as it should. Reasonable people hold genuine disagreements about the appropriate role of administrative agencies, and those disagreements deserve serious engagement. But the institutions available to enforce safety norms and produce corporate accountability do not wait for that debate to resolve. When the administrative footprint contracts, courts and private litigation occupy the space. Mass tort aggregation, as this series has argued from the beginning, is not a procedural anomaly or an artifact of plaintiff-side opportunism. It is a structural feature of how diffuse harm gets addressed in a system where regulation has never been sufficient on its own. That function does not become less important when regulatory capacity declines. It becomes more so. Oliver Wendell Holmes once observed that “[t]he life of the law has not been logic: it has been experience.” The Common Law 1 (1881). The experience of the opioid epidemic, the decades of PFAS contamination, and the accumulating evidence of adolescent harm from platform design all point to the same structural lesson: Regulation and private enforcement are not competitors in an institutional zero-sum game. They are partners in an enforcement system that neither can sustain alone. The debate about their proper balance will continue. But dismissing private enforcement as mere opportunism ignores what experience has consistently shown: When private enforcement is absent, no one else fills the gap.

Class action litigators who practice in the BIPA space received clarity in April 2026 following the Seventh Circuit Court of Appeals’ decision in Clay v. Union Pacific Railroad Co. (“Clay”).[1] In a concise 17-page opinion, the court held that the Illinois General Assembly’s 2024 BIPA amendments, which established that BIPA damages should be evaluated on a per-person basis, should be applied retroactively to cases pending at the time of enactment. This decision is a setback for plaintiffs’ counsel who had invested heavily—in time and resources—in BIPA litigation as the next major vehicle for class action recovery. An overview of how we got here is below followed by a summary of the decision. History of BIPA In 2008, Illinois enacted the Biometric Information Privacy Act to respond to the “increasing use of biometric data in commerce.”[2] BIPA was intended to give individuals the right to control their biometric identifiers and information while providing a right of action and meaningful damages against entities that mishandled them. But one question quickly came to the fore: was a new claim accruing each and every time an employer collected the same information from the same employee? As one defendant argued, such a per-scan theory of claim accrual would create “potentially crippling financial liability” for employers who violate BIPA by “repeatedly collecting the same information in the same way.”[3] Recognizing the question’s importance, the Seventh Circuit, in Cothron v. White Castle System, Inc., certified the question of claim accrual to the Supreme Court of Illinois. During briefing, the defendant invoked Section 20—which sets the damages a plaintiff can recover “for each violation”—to dissuade the court from adopting its per-scan reading of Section 15, citing potentially astronomical awards. In a 2023 decision, the Illinois Supreme Court sided with the plaintiffs and held that pursuant to Section 15, claims accrue “with every scan or transmission” of biometric information.[4] The Illinois Supreme Court acknowledged the prospect of “potentially excessive damage awards,” but noted that concern is “best addressed by the legislature.”[5] Accordingly, the court concluded its opinion by “respectfully suggest[ing] that the legislature review these policy concerns and make clear its intent regarding the assessment of damages under the Act.”[6] The Illinois General Assembly Acts Less than a year and a half after Cothron, the Illinois General Assembly heeded the court’s call and passed an amendment that added two clauses to Section 20. The first provided that any entity that collects biometric information “in more than one instance… from the same person using the same method of collection in violation of subsection (b) of Section 15 has committed a single violation…for which the aggrieved person is entitled to, at most, one recovery under this Section.[7] The second added the same operative language for violations of Section 15(d).[8] Going forward, it was now clear that only “one recovery” was available per person (regardless of how many scans there were), transforming potentially excessive damages into more modest ones. But the legislature left one question open: should the amendments apply retroactively to cases already in progress? The Clay Decision According to the Seventh Circuit, Illinois courts have a simple decision tree when it comes to assessing retroactivity. First, did the legislation expressly indicate the temporal reach of the amendment? If yes, case closed. If not, then the court must assess whether the amendment in question constituted a substantive or procedural change to the law. Under Illinois law, a substantive amendment “prescribes the rights, duties, and obligations of persons to one another as to their conduct or property and … determines when a cause of action for damages or other relief has arisen.”[9] Conversely, a procedural amendment involves the “rules that prescribe the steps for having a right or duty judicially enforced, as opposed to the law that defines the specific rights or duties themselves.”[10] While the Clay court acknowledged that the distinction between the two can, in many different contexts, “be unclear,”[11] the court had no trouble deciding the case at bar for one simple reason: the “amendment to BIPA Section 20 is a remedial change,”[12] and “the Supreme Court of Illinois treats remedial changes as procedural, not substantive.”[13] Two features of the amendments were critical: First, the legislature located the amendments in Section 20, which governs liquidated damages, rather than Section 15, which sets the substantive standards for liability under the Act. Second, the amendments’ plain language “focuses on remedies,”[14] indicating that an “aggrieved person is entitled to, at most, one recovery under this Section.”[15] The court’s analysis was straightforward. For those BIPA litigants involved in currently pending cases, the litigation terrain just got bumpier for plaintiffs and more favorable for defendants. Plaintiffs’ settlement leverage in these cases has been significantly reduced. Nevertheless, with enough putative class members, BIPA cases could still be worth bringing, even if they are no longer as valuable. We will continue to monitor the ramifications of this decision. Notes: [1] No. 25-2185 (7th Cir. Apr. 1, 2026). [2] Id. at 3. [3] Id. [4] Cothron v. White Castle System, Inc., 216 N.E.3d at 921 (Ill. 2023). [5] Id. at 929. [6] Id. [7] 740 ILCS 14/20(b). [8] Id. at 14/20(c). [9] Perry v. Dept. of Fin. & Prof. Regulation, 106 N.E.3d 1016, 1034 (Ill. 2018). [10] Id. [11] Clay at 8. [12] Id. at 9. [13] Id. at 8. [14] Id. at 10. [15] 740 ILCS 14/20(b), (c) (emphasis added).

The International Legal Finance Association (ILFA) submitted a letter this week to the Civil Procedural Rules Committee of the Supreme Court of Pennsylvania, highlighting the benefits of litigation funding and the risks associated with the mandatory disclosure of funding. The Supreme Court of Pennsylvania is considering a rule that would require mandatory disclosure at the outset of litigation of third-party funding agreements where the funder has a right to control or influence the litigation. ILFA’s letter emphasized that the vast majority of courts—including Pennsylvania courts—have declined to require discovery of funding agreements, in part because such disclosure would breach work product and attorney-client privilege protections. The ILFA letter also emphasized that the leading studies of disclosure by state courts—performed in Delaware and Texas—both concluded that third-party funding does not present significant ethical issues warranting automatic disclosure of funding at the outset of litigation. The full text of ILFA’s letter is available here .

Lawdragon, a leading independent legal research company, has recognized six Certum Group professionals to its 2026 Lawdragon 100 Global Leaders in Litigation Finance. The Guide recognizes the leading practitioners in the field of legal risk assessment and litigation funding. The six members of the Certum team recognized were Patrick Dempsey , Joel Fineberg , Dean Gresham , William Marra , Tyler Perry , and Kirstine Rogers .  Certum was recognized for a breadth of offerings, including not only litigation finance but also the range of Certum’s insurance offerings including litigation buyout and judgment preservation insurance. Lawdragon also profiled Marra as part of its 2026 rankings, highlighting his ability to “assess legal claims as assets and create pathways forward to pay lawyers to win strong cases.” The full rankings list is available here.

Litigation funding is no longer novel, but for many law firms it remains unfamiliar. A significant number of the firms we work with— including large and sophisticated practices—are engaging with a litigation funder for the first or second time. When firms ask how best to navigate these relationships, our guidance consistently centers on three principles: Confidentiality, Conflicts of Interest, and Control . Addressed early and thoughtfully, these issues help preserve the integrity of the lawyer-client relationship while allowing funding arrangements to function as intended. Confidentiality To get your case funded, you’ll likely need to share certain confidential case information with a funder. (For an overview of what you’d want to include in a memo requesting funding, see this article with helpful tips.) Before sharing confidential information, lawyers must ensure they have their client’s informed consent. Ethical rules—including ABA Model Rules of Professional Conduct, Rule 1.6 and its state analogues—generally prohibit disclosure of client confidential information absent client authorization or implicit authorization arising from the representation. Once client consent is obtained, counsel should enter into a non-disclosure agreement with each funder before sharing substantive information. While the absence of an NDA does not mean that a defendant can obtain information shared with a funder—and courts generally deny discovery into litigation funding—NDAs remain an important tool for protecting confidentiality and reducing the risk of later discovery disputes. For an overview of what’s in an NDA, see this article on the subject). Best Practice Tip: Consider addressing litigation funding explicitly in engagement letters, including advance authorization to share confidential information with funders at the client’s direction. Conflicts of Interest Litigation funding should not create conflicts between a law firm and its client. While the lawyer-client relationship is paramount, it often overlaps with economic arrangements—hourly fees, contingency fees, or hybrid structures—whether or not funding is involved. For that reason, many claimholders elect to retain independent deal counsel to negotiate funding agreements. These negotiations frequently involve corporate, tax, and financial issues that fall outside the core expertise of trial counsel. Separating deal negotiation from litigation strategy can help preserve alignment and avoid conflicts. Best Practice Tip: Claimholders should consider using independent counsel—rather than litigation counsel—to negotiate funding agreements. Control In funded cases, claimholders retain control over litigation strategy and settlement decisions. Many regulatory proposals and court disclosure rules focus on whether a funder has approval rights over such decisions, reflecting the principle that third-party funding should not compromise attorney independence. For example, court rules in the District of New Jersey and disclosure requirements imposed by Chief Judge Connolly in the District of Delaware require disclosure of whether a third party has approval rights over litigation or settlement decisions. While funders are entitled to information about case developments—and may retain limited termination rights in circumstances such as fraud or material breach—they do not direct litigation or settlement strategy. Best Practice Tip: Clearly memorialize the funder’s lack of control rights in both the funding agreement and the engagement letter, using language that mirrors applicable disclosure rules where appropriate. Beyond the Basics: Building Successful Partnerships Beyond these core principles, successful partnerships between law firms and litigation funders depend on: Early Engagement: Involving funders early in case evaluation can provide valuable insights and streamline the funding process. Transparency: Regular conversations among counsel, client, and funder create alignment without compromising control. Realistic Expectations: Understanding the typical funding process timeline and requirements helps manage client expectations.

Litigation is inherently complex, dynamic, and increasingly expensive. Outcomes are difficult to predict, shaped by variables ranging from jurisdiction and judge to opposing counsel, discovery disputes, and motion practice that often unfolds in unexpected ways. In a volatile economic environment, forecasting the cost of a case can feel more like art than science. Yet budgeting remains one of the most important—and most overlooked—components of successful litigation. In the litigation finance context, budgets do more than estimate costs. They establish the financial architecture of a case. Funders commit a capped amount of capital for legal fees and case expenses. Law firms allocate resources within that constraint—and are typically responsible for any legal fees incurred above the budget. Meanwhile, claimholders are typically responsible for case expenses incurred above the budget, while their ultimate recoveries may depend on how closely spending tracks expectations.  A budget that is too optimistic risks early depletion of funds. A budget that is overly conservative may deter funding altogether or unnecessarily suppress a client’s net recovery. Sound budgeting, by contrast, allows a case to be litigated through key inflection points—and, if necessary, to conclusion—without surprises that undermine strategy or alignment. Why Litigation Budgeting Is Hard—and Essential Despite its importance, budget creation is rarely taught in law school and is often learned only through experience. Most lawyers work on an hourly fee without a capped budget. Thus many excellent litigators have spent years trying cases without ever being required to forecast costs across an entire lifecycle. Litigation finance forces that discipline early. A funding request typically requires counsel to articulate not only the merits of a claim, but also the cost required to prosecute it and the relationship between spend, risk, and expected recovery. A commonly used rule of thumb is that expected damages should substantially exceed the amount of requested funding. While a 10:1 ratio is often the proposed rule of thumb, a meaningful spread between potential recovery and projected spend helps ensure that funders can achieve target returns, clients can realize meaningful net recoveries, and law firms can be compensated for their work without undue financial strain. What a Litigation Budget Typically Covers In funded matters, budgets generally distinguish between legal fees and case expenses , often with separate caps for each. Legal fees reflect hourly rates and anticipated staffing across phases of the case. Funders may cover a portion of those fees up to a cap, with law firms responsible for the balance and for any spend exceeding agreed limits. Expenses typically include items such as expert witnesses, discovery vendors, travel, local counsel, and court costs. These expenses are often funded at a higher percentage, again subject to caps. Clear allocation of responsibility above those caps is essential to avoid disputes later in the case. Core Questions That Drive Realistic Budgets Effective budgets begin with a clear understanding of the case itself. Among the most important questions: Scope of the case. How many claims are asserted? Are they tightly focused or sprawling? Nature of the claims . Certain claims—such as antitrust or patent matters in federal court—are typically more resource-intensive than straightforward commercial disputes. Jurisdictional considerations . Venue, procedural rules, and potential jurisdictional challenges can materially affect cost and duration. Damages theory and collectability . How will damages be proven? Are there risks to collection? Are non-monetary outcomes possible? Expected defense strategy . Will the defendant pursue aggressive motion practice or discovery tactics designed to increase cost and delay? Staffing model . What mix of partners, associates, and specialists is optimal at each stage? Time to resolution . Is the case likely to resolve early, or should it be budgeted through trial and appeal? Discovery: The Largest Variable Discovery is often the single largest expense—and the hardest to predict. When budgeting for discovery, it is critical to consider: The scope of discovery permitted in the jurisdiction The volume and sources of potentially relevant documents The complexity of collection, review, and production The number and location of depositions The need for expert testimony, often among the most expensive components of a case The availability and accessibility of key witnesses Thoughtful planning at this stage can materially reduce cost without compromising litigation objectives. The Role of Funders in Budget Discipline Experienced funders can play a constructive role in budget management—not by directing litigation strategy, but by helping track spend against expectations and flagging deviations early. Regular reporting and periodic check-ins allow counsel and clients to address emerging issues before they become financial problems. Funders also bring cross-case experience across jurisdictions, industries, and claim types that can inform contingency planning and resource allocation. Tips for Creating and Sticking to Budgets Effective litigation budgets are not static documents. They are management tools—designed to impose discipline, anticipate inflection points, and align incentives as cases evolve. In practice, several mechanisms can help law firms and clients create budgets that are both realistic and durable: Budget precedents . Where available, budgets from comparable matters—whether maintained by the law firm or the funder—can provide a valuable reality check. Historical data from similar cases often reveals cost drivers that are easy to underestimate in the abstract. Monthly flat-fee structures . Some firms have moved away from pure “fees-as-incurred” models in favor of monthly flat fees. When appropriately calibrated, this approach can smooth cash flow for the firm during slower periods while reducing the risk of budget overruns during more intensive phases of litigation. Staged funding . Staging capital by phase—such as through a motion to dismiss, summary judgment, or trial—can help ensure that spending remains tied to progress and performance. Phase-based caps encourage early reassessment without forcing premature strategic decisions. Reallocation flexibility . In some cases, budgets permit limited reallocation between categories, such as legal fees and expenses. When used carefully, this flexibility can accommodate unforeseen developments without requiring wholesale renegotiation of the budget. Taken together, these tools reinforce what effective budgeting is ultimately about: creating a financial structure that supports the litigation strategy, rather than constraining it.