Litigation funding—also known as litigation financing or third-party litigation funding (TPLF)—provides a person or entity with the money to pay attorney fees, expert witnesses, and other costs necessary for litigation. Litigation funding is essentially a loan, secured by the proceeds of the expected settlement or collection of judgment in a lawsuit, and is designed to allow persons or entities without the necessary resources to pursue valid claims in litigation.
In Connecticut, litigation funding, also known as litigation financing or third-party litigation funding (TPLF), is a practice where a third party provides financial assistance to a litigant to cover legal expenses such as attorney fees and expert witness costs. This financial support is typically provided in exchange for a portion of the proceeds from the settlement or judgment. Connecticut does not have specific statutes directly regulating litigation funding for general civil litigation. However, the practice is subject to general contract law principles and must comply with state laws regarding interest rates and consumer protection. Additionally, ethical rules for attorneys in Connecticut may impact the arrangement, particularly rules regarding the control of litigation by non-lawyers and the sharing of legal fees with non-lawyers. It is important for parties involved in litigation funding agreements to ensure that the terms of the funding do not violate any applicable laws or ethical standards.