The global litigation funding market, valued at approximately $18-20 billion in 2025 and projected to approach $70 billion annually by 2037, is increasingly looking to Latin America for its next wave of opportunity. Brazil – the region’s largest economy and home to over 80 million pending court cases – is emerging as a compelling destination for legal-based asset investors seeking uncorrelated returns in an underserved market. And where Brazil leads, the broader Latin American ecosystem is following.
A Region Defined by Scale and Complexity
Latin America’s legal markets have long been characterized by high litigation volumes, complex regulatory environments, and limited access to capital for claimants – precisely the conditions that make third-party litigation funding essential. Nowhere is this more pronounced than in Brazil, where litigation density totals more than 80 million active cases according to a November 2025 Lexology analysis, creating a vast reservoir of investable claims spanning corporate disputes, arbitration, banking litigation, environmental enforcement, and labor matters. Augusto Delarco, partner at São Paulo-based investment firm Mesh Capital noted that “such a backlog, alongside Brazil’s massive territorial dimensions and information asymmetry, creates a highly fruitful environment for the development of activities related to litigation finance.”
The Brazilian legal services market is projected to reach $57.4 billion by 2030, growing at 4.7% annually according to Grand View Research – making it the largest and fastest-growing legal market in Latin America. Corporate disputes represent roughly 35% of revenue, followed by litigation – two categories which are highly attractive to funders.
Brazil’s arbitration ecosystem has further amplified the regional opportunity. In 2025, the country was ranked sixth globally in ICC arbitration by party nationality (based on preliminary results), and in 2024 São Paulo retained its position as one of the most popular venues for ICC proceedings.
In January 2025, Brazil put into force an agreement to host a branch of the Permanent Court of Arbitration, further cementing both its own and Latin America’s credentials on the global dispute resolution stage.
A Regulatory Environment That Invites Capital
Unlike jurisdictions where champerty doctrines or restrictive regulatory frameworks constrain or prohibit third-party funding, Brazil imposes no specific statutory barriers. The practice remains largely unregulated, giving funders wide latitude to structure investments around negotiable rights including property claims, damages, insurance, and compensation. The absence of restrictive regulation means early movers can structure deals with maximum flexibility.
Brazil’s capital markets reforms further strengthen the foundation. Legislative modernization between 2020 and 2025 – spanning insolvency reform, capital-markets consolidation, public-receivable securitization, and insurance-finance convergence – has created what one Lexology analysis described as “a coherent infrastructure for capital” that enables transparent investment fund vehicles.
While there are no statutory barriers to entry – amplified by the São Paulo appellate court explicitly affirming the legality of third-party litigation funding in Brazil – the practice is still relatively new to the region compared to more mature jurisdictions such as the US, UK, Australia and Europe. This creates less predictability for investors, especially around case duration, given the historic backlog of cases in the region.
Marina Gouveia, Investment Manager at Loopa Finance contextualized what makes the region so attractive to legal based asset investors, noting “the combination of attractive risk-adjusted returns and lower market saturation. In jurisdictions like the US and UK, litigation finance is already highly competitive, with significant capital chasing a relatively well-defined pool of opportunities. In much of LATAM, and particularly in Brazil, the market is still developing. That often translates into more disciplined entry pricing and stronger potential upside for investors who are able to underwrite risk properly.”
Capital Flows and Notable Investments
In addition to traditional funders such as Burford Capital, Omni Bridgeway, and Nivalion AG, all of whom have established footholds in the region, there are a growing number of specialized investment firms with increased activity in the region, including Leste Group, LexFinance, Jive Investments, BTG Pactual, and the aforementioned Loopa Finance and Mesh Capital.
To date, the most prominent investment connected to Latin American litigation involves Pogust Goodhead‘s representation of over 620,000 Brazilian claimants against mining giant BHP over the 2015 Mariana dam collapse – the worst environmental disaster in Brazil’s history. The firm secured a $553 million corporate debt finance deal from U.S. investment manager Gramercy Funds Management, believed at the time to be the largest worldwide investment in a law firm. Total funding raised exceeded £700 million. In November 2025, the English High Court ruled BHP liable under Brazilian law, with the case valued at up to £36 billion — a landmark validation of funded cross-border litigation involving Latin American claims.
In January 2026, the High Court declined BHP permission to seek an appeal. BHP has indicated it intends to apply directly to the Court of Appeal, though legal commentators have noted the diminishing prospects of overturning detailed factual findings.
The Court will next assess the damages and losses suffered by the victims as a result of the dam collapse, with a trial tentatively scheduled to begin in October 2026.
Precatórios Claims – Brazil’s $20-billion Annual Opportunity
A legal-based asset investment opportunity that is specific to Brazil is known as a precatórios claim. They are essentially court-issued mandates requiring government entities – federal, state, or municipal – to pay a specific debt arising from a final, non-appealable court judgment.
The critical component is that once a precatório is issued, the government’s obligation to pay is constitutionally enshrined – the question is never if the government will pay, but when. So while payment timelines can be subject to political dynamics, the constitutional obligation to pay has consistently been upheld by Brazil’s Supreme Court.
Structures can range from purchasing late-stage claims – betting on duration as opposed to risk – typically at 30-40% discounts, to higher-risk/higher-return opportunities in advancing capital to claimants where the legal merit has been established but where the precatórios have not been issued.
According to a November 2025 report by Deheza, a London-based strategic advisory focused on LATAM, the Caribbean, UK and Europe, the Brazilian federal government alone pays roughly $20 billion annually on nearly 100,000 claims, and the broader market for distressed government-backed assets – including precatórios, tax credits, and debts – is estimated at over $100 billion.
Much like litigation finance investments, precatórios have little correlation to traditional capital markets. While some risk does exist – mainly regulatory risk concerning the alteration of monetary correction indices and interest rates, as well as payment timelines, compounded by periodic legislative authorizations allowing for the deferral or capping of payouts – they are considered relatively low risk given that the legal merits have already been established and that the government is ultimately obligated to pay the precatórios at some point.
While this emerging market is not without its complexity and nuance (and a historically slow court system) – with most international investors allocating capital through a number of local firms – precatórios claims may represent the greatest opportunity for firms interested in making investments into legal-based assets in the region. Delarco emphasized that precatórios “represent a litigation investment opportunity in Brazil with more controlled risks, serving as an entry point for various international players wishing to invest in alternative assets in the country.”
The Road Ahead for Latin America
For legal-based asset investors, Latin America – and Brazil in particular – presents a rare convergence: massive legal market scale, a sophisticated arbitration framework, no regulatory prohibition on funding, and structural reforms that are professionalizing the capital markets infrastructure around legal assets.
As the asset class continues to mature across the region, early movers stand to benefit from a market rapidly transitioning from bespoke investments to institutional-level allocations.
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