The Practice September/October 2019
Litigation finance is transforming civil litigation at the case level as well as, incrementally, at the level of the civil justice system as a whole. It is beginning to transform the legal industry.
Follow the Money?
The quest for a disclosure rule in litigation finance has set policymakers on a wild goose chase that has led some to avoid or punt on the issue all together, while leading others to propose disclosure regimes that are either over- or underprotective of the multiple stakeholders in this regulatory debate—namely, plaintiffs, defendants, funders, the public, and the courts—and their varying complex and shifting interests.
A Brief History of Litigation Finance
Despite its relative novelty in the U.S. context, the practice of litigation finance as it is understood today goes back at least a few decades elsewhere in the world. For lawyers, investors, and jurists trying to make sense of the rise of litigation funding in the U.S., looking to history in the U.K. and Australia is insightful.
Investing in Legal Futures
With the rise of litigation finance has come the rise of so-called litigation finance firms. At their core, litigation finance firms invest capital in legal risk the same way other financiers might approach business risk.
Hidden in Plain Sight
The market for personal injury cases is not a free-for-all. Instead, it is a highly structured market. The channels by which cases flow in the plaintiffs’ bar are well-worn. Personal injury cases are not evenly or randomly distributed among personal injury lawyers.
Volatility in the Market
Litigation finance has found its way into the news a lot in recent months—and for a myriad of reasons. Indeed, hardly a day goes by when there is not a major development in the sector. There has been an increasing importance the litigation finance industry plays in the legal profession, and the speed with which change is occurring.
Stephen D. Susman, a founding partner at the law firm Susman Godfrey and a member of litigation finance firm Bentham IMF’s advisory panel, sat down with David B. Wilkins, faculty director of the Harvard Law School Center on the Legal Profession, for a conversation on litigation finance and its impacts on the wider legal profession.