CLA News / Pioneering commercial legal Solutions and access: evolution and global implications of non-contentious and contentious third party funding by Olusoji Elias
The global legal funding industry has undergone a remarkable transformation over the past decade, evolving from a niche financial legal service to a cornerstone of good governance and access to law and justice globally. As the founder of AETAS LF—Africa’s only institutional legal funder outside South Africa—I have witnessed firsthand how innovative funding structures can maximize legal access simultaneously with creating sustainable business models that serve both individuals and institutions in standardized contexts, commensurately with commercially biased transformational balance sheets and turnover.
A. CONTEXTS: Unique Challenges and Opportunities
Africa presents a distinctive landscape for keen legal funding innovation. Unlike established markets in Australia, the UK postPACCAR, or the United States, African legal systems are pluralistic, as they operate within a complex framework of customary law, civil law traditions, and common law jurisdictions, sometimes simultaneously. This complexity, rather than being an obstacle, represents an unprecedented opportunity for commercial legal funding innovation.
B. JURISDICTIONAL DIVERSITY as a Catalyst
The continent’s 54 countries encompass multiple legal traditions including: English common law systems across former British colonies, French civil law in Francophone nations, Roman-Dutch law in South Africa, Portuguese legal frameworks in Lusophone countries, and robust customary law systems throughout.. This diversity requires commercial funding models that are both sophisticated in their legal understanding and flexible in their selective application, contentiously and non-contentiously.
C. ECONOMIC REALITIES and Legal Access
Traditional legal services remain prohibitively expensive for most African businesses and commercial individuals, creating what economists term a “justice gap.” This gap is particularly pronounced in cross-border commercial scenarios, where legal costs can exceed the value of smaller initiatives, effectively denying access to legal solutions and remedies.
D. INNOVATION in Funding Structures
At AETAS LF, we have continued to develop funding models specifically designed for standardized African legal and commercial realities:
Portfolio Funding Approaches
Rather than funding just individual cases in isolation, we have pioneered portfolio approaches that spread risk and which are particularly effective for commercial situations arising from trade relationships within regional economic communities like the Economic Community of Western African states (‘ECOWAS’) or South African Development Community (‘SADC’) and, going forward, the immensely significant, upcoming African Continental Free Trade Area (AfCFTA).
Hybrid Financial Products
We have created hybrid products that combine traditional litigation funding with insurance coverage, protecting both funders and claimants against adverse cost orders while ensuring funded parties can pursue legitimate claims without financial barriers. We remain committed to judicial review actions in the first place. Analogues for non-contentious matters are rife, particularly with respect to regulatory and compliance costs.
Technology-Enabled Due Diligence
Utilizing advanced legal analytics and AI-assisted corporate governance and case assessment tools, we can evaluate funding opportunities more efficiently and accurately than traditional manual review processes. This technological advantage is crucial in markets where local legal expertise is limited.
Cross-Border Implications for Funding
The globalization of commerce has made cross-border legal scenarios increasingly common. African businesses engaging with international partners, particularly in sectors like energy, mining, and technology, require funding solutions that understand both local legal and regulatory frameworks, and international arbitration procedures. Our knowledge of international arbitration under ICC, LCIA, and ICSID rules has demonstrated the critical importance of funders who understand both the technical aspects of arbitration and the commercial realities of African business operations.
Regulatory Navigation
Each jurisdiction presents unique regulatory challenges for legal funding. Our approach involves working closely with local legal systems and regulators to ensure compliance while advocating for regulatory frameworks that support corporate fulfilment and access to justice respectively through responsible funding practices.
Global Finance Integration & Institutional Investment Interest
My current role in global corporate finance and other practice areas provides unique insights into how legal funding can integrate with broader financial innovation. The convergence of legal technology, alternative finance, and global capital markets creates unprecedented opportunities for scaling legal funding solutions. Sophisticated institutional investors increasingly recognize legal funding as an alternative asset class with attractive risk-adjusted returns. This institutional interest provides the capital necessary to fund larger, more complex scenarios while maintaining the operational expertise required for successful corporate governance and case management.
ESG Considerations
Environmental, Social, and Governance (ESG) factors play an increasingly important role in institutional investment decisions. Legal funding that enhances and aligns with ESG objectives, particularly in developing markets where legal access remains limited.
Future Developments and Predictions: Regulatory Standardization, Technology Integration
Based on current trends and our operational experience, several developments will shape the future of legal funding in Africa and globally:
We anticipate increased regulatory attention to legal funding, with a movement toward standardized disclosure requirements and professional standards across jurisdictions. This standardization will benefit both funders and the legal profession by creating clearer operational frameworks. Artificial intelligence and machine learning will increasingly influence funders’ decisions and portfolio management. However, the human element remains crucial, particularly in understanding local legal and commercial contexts.
E. MARKET EXPANSION
The success of legal funding in established markets will drive expansion into emerging markets across Asia, Latin America, and Africa. This expansion requires locally adapted models rather than simple transplantation of Western funding structures.
F. RECOMMENDATIONS FOR STAKEHOLDERS: Essential Proliferation
For Legal Practitioners
Lawyers should proactively educate themselves about funding options and their implications for client service. Understanding funding structures enables lawyers to better serve clients who might otherwise be unable to pursue legitimate initiatives and claims.
For Policymakers and Regulators
Governments should consider regulatory frameworks that support responsible legal funding while protecting against potential abuses, such as where contingent financing may apply. Clear regulatory guidelines benefit all stakeholders by creating operational certainty.
For Businesses and Individuals
Companies, particularly those engaged in cross-border commerce, should understand legal funding as a risk management tool that can provide access to legal solutions and remedies without tying up operational capital.
G. CONCLUSION
The legal funding industry stands at an inflection point. The combination of increased institutional interest, technological advancement, and growing recognition of access to justice as a fundamental economic development factor creates unprecedented opportunities for innovation and growth.
In Africa, we have the opportunity to leapfrog traditional legal service delivery models, creating funding structures that serve both commercial interests and broader social objectives. The success of this approach will depend on continued innovation, responsible regulation, and commitment to the fundamental principle that legal and regulatory solutions and access to justice should not depend solely on financial resources. As the industry evolves, the lessons learned from pioneering and frontier markets like Africa will inform global best practices, creating more accessible and equitable, better integrated legal systems worldwide.
Author: Olusoji O. Elias
Founder and Executive Chairman of AETAS LF, Africa’s premier legal funding institution, and serves as Chief Legal Counsel for Greyhorse Financial Corporation. He is recognised by Corporate LiveWire UK as Global Corporate Lawyer of the Year 2025 and United Kingdom African Lawyer of the Year 2024/2025 & 2025/2026. His work on law and globalisation, global and transnational corporate finance, and private international law has influenced policy at the highest levels of government. All the views expressed above are personal.
https://aetasLF.com
https://olusojieliascounsel.com
