The United States is a federal system and the rules on litigation funding – more commonly referred to as legal financing – vary state by state.
However, the trend is that an increasing number of State Supreme Courts within the US find in favour of litigation funding. This trend has been reinforced by cautious endorsements from certain influential bodies, including the American Bar Association.
Currently, a majority of its states (including New York, California, Texas, Massachusetts, Arizona, Colorado, Connecticut, Florida, Missouri, New Jersey, New Hampshire, New Mexico and South Carolina) permit litigation funding.
The Delaware Chancery court made it clear in the ruling of the case of Carlyle Investment Management LLC v Moonmouth Company  that documents provided by third party funders are subject to work product privilege.
Legislation regulating the litigation finance industry in the US is currently the responsibility of the various states. The US Chamber Institute for Legal Reform believes state regulation is not sufficient and has endorsed federal regulation of the industry.
In 2004 the American Legal Finance Association (ALFA) was established in New York as a non-profit corporation and represents litigation funding member companies nationwide which provide non-recourse funds to personal injury victims who have filed a claim or a lawsuit. ALFA’s main goals are to establish standards for the litigation funding industry (such as transparency and full disclosure to plaintiffs) and to serve as the liaison with the public, government officials, and the media.