Litigation Finance predators: champetry loves company


#1

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#2

The fundamental obstacle to this working out well seems to be that anyone under-resourced enough that litigation finance will improve their access to redress is also under-resourced enough that anyone in litigation finance would be positioned to plunder them with impunity(and will know it, since their target audience is ‘people too poor to afford justice’).

Maybe in somebody’s game-theory-and-undergrads “model” of the situation, an N-layer litigation finance structure creates a self-regulatory equilibrium(because litigation financiers will finance suits against their bad-actor fellows); but in the real world; shit flows downhill; and I know where I’d bet.


#3

If we’re up against a large corporation, we’re all too poor to afford justice. They can always run the clock until we’re bankrupt.


#4

I’m an attorney. I’ve never used litigation financing, nor had any direct interaction with any of the companies that offer it, but it is at least my initial opinion that this kind of financing can serve an extremely useful purpose, and can make the difference in a person who has been extremely injured in getting justice, and getting nothing.

I could provide a hundred real-world examples, but instead I’ll just throw out an easy hypothetical: Suppose our friend Bob opened up the hood of his brand new car to check on an unusual sound he was hearing. As soon as he did, some part under the hood blew up in his face, and cost him his vision, and permanently disfigured him. This is a case that could literally cost a million dollars to bring. Worse, it will be against an extremely deep-pocketed opponent (think car company or insurance company) that will throw huge money at a case like this to make it go away. There are some plaintiff’'s firms that can front this kind of money out of their own pockets, but it is definitely the minority.

On the other hand, like with most things related to money, I’m sure litigation financing could also be used for nefarious/shady purposes.


#5

So…don’t let your own financiers vest too late?


#6

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