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 Wisconsin, litigation funding, also known as 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. The funding is typically provided in exchange for a portion of the settlement or judgment proceeds. Wisconsin 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 consumer protection and lending. Additionally, ethical rules for attorneys in Wisconsin, as in other states, prohibit attorneys from providing financial assistance to clients for living expenses, with limited exceptions. Attorneys must also be wary of potential conflicts of interest and maintain client confidentiality when dealing with litigation funders. It is important for parties considering litigation funding to carefully review the terms of any funding agreement and consider the potential impact on their case and financial situation.