Document Type

Article

Publication Date

2026

Abstract

Our civil justice system rests on certain foundational commitments: to make rights real for those the law protects, regardless of their station; to hold wrongdoers accountable, no matter their power; and to deter misconduct in a landscape that depends, above all, on private enforcement for the regulation of wrongdoing. We put great faith in these values.

Civil justice, for all its lofty goals, is also a business. Attorneys and liability insurers have long had their own economic stakes in litigation, under their own professional and regulatory norms. But now, a new litigation finance industry has arisen: outside investors provide equity capital—divorced from legal representation and liability management—and take returns directly from claim proceeds. This institutionalizes the matter: civil justice is a business, on both sides of the “v.”—and that has occasioned fierce debate.

Three substantive concerns underlie the welter of critiques from scholars, judges, and commentators: that funders will profit over plaintiffs, take over litigation and settlement, and extract settlement payouts on claims untethered from merit. As a political matter, these concerns are seized as weapons by the familiar combatants of the class-action wars and claim-elimination crusades, for whom litigation finance is a fresh and convenient target. As a regulatory matter, the critiques largely manifest as efforts to prevent civil justice from becoming a business—or at least, this kind of business.

The questions run deeper. What appear as litigation finance concerns are foundational civil justice questions, brought into sharper relief by the industry: the potential conflicts of interest introduced by the agency of money; claimant autonomy and decision-making authority over litigation and settlement; and the institutional conditions necessary to tether claim generation and settlement to merit. Absent a framework engaging the industry at the level of its core problematics, judges and lawmakers have been left to grapple with this new entrant through ancient constructs, or by way of atomized civil justice rules and policies repurposed to channel inherited restrictions. Nostalgia is not a strategy. Such approaches constrain judges and regulators to essentialist binaries of permission and prohibition, unresponsive to the complex realities of modern civil justice. Worse yet, they hinder engagement with foundational civil justice concerns.

This Article’s central contribution is to develop a theoretical framework for engaging litigation finance at the level of its core problematics. The framework is conceptualized along a series of critical relationships in funded litigation, drawing on modern relational contract theory along similar lines. Malleable to those relationships, it enables judges, lawmakers, and scholars to engage the foundational questions across the industry’s materially different market segments. Critically, the relational and market analysis is grounded in and directed by the diverse institutional settings of modern civil justice. The relational-institutional framework that results situates litigation finance within the traditional areas of scholarship in civil procedure, complex litigation, and private law.

This Article’s relational-institutional framework recasts three of the most heated debates in litigation finance: disclosure, claim control, and mass-claim funding. Attenuated to the relational and institutional substance of funded litigation, the framework charts a course forward through these seemingly intractable debates, generating principled regulatory pathways that diverge meaningfully from existing approaches. What emerges is an integrated account of funded litigation, grounded in doctrine, theory, and normative commitment. The relational-institutional framework offered here thus not only could govern these debates; it should.

More broadly, this Article synthesizes and extends prior work toward a unified theory of civil justice as realized law: an account centered on the system’s capacity to give substantive legal rights real meaning—or to leave them without it. The relational-institutional framework charts a course for harnessing civil justice innovations, not just the litigation finance industry in focus here, to effectuate the business of civil justice. That, ultimately, is the business at hand.

Publication Citation

101 N.Y.U. L. Rev. (forthcoming 2026)

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