A shadowy multibillion-dollar industry has grown roots in the American justice system: third-party litigation funding, or TPLF, which allows financiers to invest in lawsuits by covering participants’ legal fees in exchange for a hefty portion of a potential payout. Most of these investments are made in either consumer lawsuits (primarily personal injury) or large-scale commercial cases.

Individual payouts can be enormous. For example, Burford Capital, probably the largest third-party litigation funder in the world, lent the two cardiologists behind Colibri Heart Valve LLC several million for a patent infringement suit after Medtronic began to sell patent-protected transcatheter aortic valve replacement products without compensating Colibri. Burford’s loan covered counsel and litigation fees and ultimately resulted in a $106.5 million award for Colibri.

It is outcomes like this that keep the industry afloat. But companies’ interests may differ from those of the plaintiffs and defendants they fund. Such is the issue at the heart of Sysco v. Burford, a suit filed by the food distributor Sysco against the lawsuit funder. Burford had helped fund antitrust litigation for Sysco in 2019, then refused to allow Sysco to settle for what the company believed to be a reasonable offer. Burford instead petitioned for a temporary restraining order to block Sysco from reaching a settlement, in hopes of holding out for a bigger payout. The right to reject settlement represents one major point of contention for critics of the TPLF industry; other issues include conflicts of interest between lawyers (who must act in their clients’ best interests) and funders (who have no such obligation) as well as the potential frivolity of suits brought to court with TPLF money.