Companies that finance U.S. commercial lawsuits in exchange for a cut of any recoveries upped their investments last year, committing $3.2 billion, according to a new report.

That represents a 16 percent increase in capital committed to new U.S. litigation funding deals, marking the largest annual increase in the past three years, litigation finance advisory firm Westfleet Advisors said in a new report.

Westfleet CEO Charles Agee said there are likely several factors driving the growth, including a rush to bring cases that were delayed as a result of the COVID-19 pandemic. He also cited “inflation” from higher law firm billing rates and litigation expenses.

Litigation funders provide financing for individual lawsuits or case portfolios in exchange for a share of any settlement or court judgment. The report provides a rare look into the scope of an often opaque industry, since details about specific investments are not typically publicized.

Westfleet said its report used self-reported, aggregated data from litigation finance companies on transactions from July 2021 through June 2022. It said most major litigation funders participated.

As the industry has grown in the United States over the past decade, the U.S. Chamber of Commerce and other critics have pushed for tighter regulation, arguing the practice promotes unnecessary litigation and undermines transparency in the legal system. Backers say it can level the playing field and promote access to justice.

The Chamber and group of Republican state attorneys general also recently have argued that unspecified foreign actors could compromise national security by investing in U.S. lawsuits.

The International Legal Finance Association, a global trade group currently representing 19 commercial litigation funders, called the Chamber’s report on purported national security threats “light on substance and heavy on speculation and pre-conceived notions.”

Agee said industry advocates and opponents alike should acknowledge that litigation funding “is still a very, very small percentage of total commercial litigation in the U.S.”

The 44 active funders in the U.S. market in 2022 had a combined $13.5 billion in assets under management, representing a 9 percent increase, Westfleet’s report said.