Originally from Handbook on Third-Party Funding in International Arbitration

1.1.   TPF Regime in California

1.1.1. Is TPF commonly used in your Jurisdiction? If yes, since when (is it a new trend or a well- established practice)? 

Large-scale Third-Party Funding (“TPF”) in California is relatively new but is “spreading rapidly.”  This is likely due in part to the lack of regulations and common law barriers pertaining to TPF in California.  Third-Party Funders (“Third-Party Funders” or “Funders”) have an incentive to select cases in jurisdictions where legal concepts affecting TPF such as maintenance and champerty are well settled, thereby reducing risk. Having never adopted the doctrines of maintenance and champerty from the English common law, California is a state in which TPF has fewer associated risks due to regulation.

California was the location of the first major conference dedicated to the topic of TPF in the United States in 2009.  At that conference, the UCLA-RAND Center for Law & Public Policy called TPF one of the “biggest and most influential trends in civil justice.” 

1.1.2. Please shortly describe the TPF market in your Jurisdiction. Is it dominated by local or international Funders, which type of Funders are active, which cases get typically funded? Is there any source on Funders (like the overview published by the German Bar)? 

There are a number of international and local Funders operating in California, such as Burford Capital, Bentham IMF, Vannin Capital, Longford Capital Management, Fulbrook Capital Management, Vinson Resolution Management, and Prometheus Law.  There exists no comprehensive source on Funders similar to the overview published by the German bar. Generally, commercial Funders operating in California focus on contracts, antitrust, and intellectual property disputes.