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 California, 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. This funding is typically non-recourse, meaning that the funder will only be repaid from the proceeds of a settlement or judgment if the litigation is successful. California does not have specific statutes directly regulating litigation funding for non-class action lawsuits, but such arrangements are generally subject to contract law, ethical considerations for attorneys, and case law. The California State Bar has issued opinions on the ethical implications for attorneys working with litigation funders, emphasizing the need to maintain attorney-client privilege and avoid conflicts of interest. Additionally, disclosure of litigation funding arrangements may be required under certain circumstances, such as in class actions or as directed by a court. It is important for parties entering into a litigation funding agreement to ensure that the terms of the agreement are clear and that they understand the implications of the funding arrangement.