Legal Financing

Legal action is an important lever for local governments to achieve policy goals, enjoin harmful activity, and receive monetary compensation for damages suffered. However, the cost of litigation and greater legal resources available to well-funded defendants means that many local governments cannot realize the full potential of litigation. Legal financing is an established practice among private firms for financing and reducing the risk of litigation. Could it be time for local governments to start using legal financing to pursue lawsuits that seek to vindicate the public’s interest (“affirmative litigation”) and receive compensation that could be used to help address community problems? This report explores the potential of legal financing by asking and answering questions about this new-to-government tool.

• Publication date: February 2022