Litigation Funders Say Capital Becomes Scarce as Recession Looms

The desire of law firms and their clients for litigation finance is running into the tight financial markets, leaving too few dollars for a burgeoning demand.

Litigation funder Validity Capital is laying off half its staff after its backer TowerBrook Capital decided to cut investments in the litigation finance firm.

Lionfish, the litigation funding subsidiary of UK-based RBG Holdings, was put up for sale in April after the company took a 4 million euro hit following losses in two cases it invested in.

“There’s been a pullback from risk assets and litigation is definitely seen as a ...