Unsettled: High revenue volatility leads to declining industry profit margins

Litigation funding has been around for more than a decade, but it is a comparatively new development in western legal history. Champerty, an agreement by a third party to fund a lawsuit in return for a share of the plaintiff's proceeds, has historically been outlawed. This law has been abolished throughout Australia over the past two decades, spurring industry growth. Industry firms have similar characteristics to financial intermediaries, in that they source funds from capital markets to invest in lawsuits. As industry firms derive a percentage of the settlement fee on the successful conclusion of the case, litigation funders are highly selective in the cases they fund.Industry revenue is expected to fall at an annualised 2.0% over the five years through 2016-17, to $89.2...read more.

Industry Statistics & Market Size
Revenue
$89m
Annual Growth 12-17
-2.0%
Forecast Growth 17-22
Profit
Employment
130
Businesses
13
Market Share of Companies

Industry Threats & Opportunities

  • Demand for industrial relations funding cases has fallen because unions tend to fund these disputes
  • Industry Report - Starting a New Business Chapter

    The Litigation Funding industry has high and steady barriers to entry. Successful firms need a high level of expertise in assessing cases on their legal merits, managing debt over varying time periods, and finding suitable cases. The lack of awareness of litigation funding in Australia also means that firms need to have a large number of contacts, or a strong presence in the market, to get a share of the comparatively small number of available cases. Often, firms need to educate the market about the utility of their business model, or even about the fact that such a model exists.Firms need to have dependable access to significant amounts of capital to fund large-scale cases, which can be a barrier for new entrants. Thi...purchase to read more.

    Additional Insights for the Litigation Funding Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Litigation Funding Industry are

  • Portfolio management
  • Superior financial management and debt management
  • Capacity to objectively assess new investments
  • IBISWorld analysts also discuss how external factors such as Business bankruptcies and Demand from legal services in the Litigation Funding industry impact industry performance..

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    What's in this report

    What is the Litigation Funding Industry?

    Industry firms primarily fund litigation and earn a commission, which is a portion of the settlement or judgment proceeds. The industry excludes lawyers and any companies providing legal services.

    Industry Products
  • Investor-related lawsuits
  • Consumer protection lawsuits
  • Industrial relations lawsuits
  • Other services
  • Industry Activities
  • Funding corporate law suits
  • Funding industrial law suits
  • Funding class action suits
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Business bankruptcies
  • Demand from legal services
  • Work accident rate per 1,000 employees
  • Real household disposable income

  • Current Performance
  • Chart: Revenue Growth

  • Industry Outlook
  • Table: Litigation Funding Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Litigation Funding Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Professional, Scientific and Technical Services
  • Consumers

  • Key Selling Industries
  • Investment Banking and Securities Brokerage
  • Legal Services

  • Products & Services
  • Investor-related lawsuits
  • Other services
  • Industrial relations lawsuits
  • Consumer protection lawsuits
  • Chart: Litigation Funding Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Individuals
  • Small- to medium- sized businesses
  • Large businesses
  • Chart: Major Market Segmentation for the Litigation Funding Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Profit
  • Wages
  • Rent, utilities and depreciation
  • Other
  • Chart: Cost Structure Benchmarking – Sector vs Litigation Funding

  • Basis of Competition
  • Internal competition
  • External competition

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Litigation Funding Industry

  • Industry Globalization
    IMF Bentham Limited,
  • Table: IMF Bentham Limited - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Litigation Funding Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Litigation Funding Industry
    Includes:
  • Industry Revenue (2008-2022)
  • Industry Gross Product (2008-2022)
  • Establishments (2008-2022)
  • Businesses (2008-2022)
  • Employment (2008-2022)
  • Wages (2008-2022)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Champerty
  • Champerty refers to third parties, such as litigation funders, 'buying into' a lawsuit.
  • Class Action
  • A lawsuit where a group or 'class' of people sues another party. Class actions are usually consumers suing a large business.
  • Maintenance
  • Maintenance refers to the involvement of a disinterested party, such as litigation funders, to encourage a lawsuit.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Litigation Funding market research report provides the latest industry statistics and industry trends, allowing you to identify the products and customers driving revenue growth and profitability. The industry report identifies the leading companies and offers strategic industry analysis of the key factors influencing the market.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
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    This report on Litigation Funding:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Litigation Funding market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Litigation Funding, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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