Tilted Scales of Justice? The Consequences of Third-Party Financing of American Litigation
Third-party financing of commercial litigation is a relatively new phenomenon in the United States. Recently, there has been a substantial increase in the amount of money that third parties have invested in commercial lawsuits. Many new investment management groups have been formed in cities such as New York, London, and Sydney looking to finance the endless stream of American litigation. These groups are for-profit entities that fund all or a portion of a plaintiff's legal fees in exchange for a share of any recovery that might result from the underlying lawsuit. The third-party litigation funders, as they are often called, put their "skin in the game" by risking the loss of their investment if the underlying claim is unsuccessful. The calculated risk these third-party litigation funders take has systematically resulted in astronomical returns for the companies and their investors.
Joshua G. Richey,
Tilted Scales of Justice? The Consequences of Third-Party Financing of American Litigation,
Emory L. J.
Available at: https://scholarlycommons.law.emory.edu/elj/vol63/iss2/7