Litigation funding began in Australia in the mid-1990s when legislation allowed insolvency practitioners to finance legal claims as company property. The introduction of class actions in 1992 further spurred the industry, though funders were initially cautious. A 2006 High Court ruling legitimized third-party funding, leading to widespread adoption—today, nearly all major class actions in Australia are privately funded.

In the UK, litigation funding gained traction after the 1967 decriminalization of maintenance and champerty and the 1990 legalization of conditional fee agreements (CFAs). The 1999 Access to Justice Act further encouraged funding by allowing success fees and insurance costs to be passed to losing parties and introducing ATE insurance. A 2002 court decision endorsed funding, and by 2025, the legal system continues to refine the framework, with recent court decisions limiting agreements that give funders a percentage share of any recovery.

U.S. litigation funding was initially limited to personal injury cases but expanded in 2006 with the emergence of commercial funders like Credit Suisse and later Lake Whillans. The legal framework varies by state, with a trend toward acceptance and protection of funder-litigant communications under doctrines like work-product privilege.

Canada’s litigation funding has grown despite anti-champerty statutes in some provinces. Courts have approved LFAs, especially in class actions and insolvency proceedings, recognizing their role in access to justice while imposing limits on funder control and returns to protect the attorney-client relationship.

Litigation funding is increasingly used in international arbitration, especially for costly investor-state disputes. Since 2017, Hong Kong and Singapore have legalized third-party funding to stay competitive. The practice has prompted global discussions on disclosure, conflicts, and cost management, with guidance from the ICCA and Queen Mary University.