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 Vermont, there is no specific legislation that comprehensively regulates litigation funding, also known as litigation financing or third-party litigation funding (TPLF). However, the practice is generally permitted and operates within the broader legal and ethical frameworks that govern the conduct of attorneys and the litigation process. Litigation funding agreements in Vermont must not violate laws against champerty and maintenance, which historically prohibited third-party involvement in lawsuits. Additionally, any such agreements must adhere to principles of fairness and transparency, and they must not result in the funder exerting control over the attorney's professional judgment or the litigation strategy. Attorneys involved in litigation funding arrangements must also ensure they are in compliance with the Vermont Rules of Professional Conduct, particularly with regard to client confidentiality and conflicts of interest. As the industry grows, there may be future regulations at both the state and federal levels that could further define and shape the practice of litigation funding in Vermont.