“If you want to use the civil justice system, you have to have money,” said Alan Zimmerman, who founded one of the first litigation finance companies in 1994, in San Francisco, now called the LawFinance Group. “If there’s less money, you’d have less litigation. But then you’d also have less justice.”
Does the use of money have a moral component? Of course. Although many people would argue that it doesn't, that the exchange of money should be allowed to flourish in a universe safe from moralists.
T' hell with that! Now we're back looking at investment as a free-for-all -- well, free until the taxpayer has to ante up with a bailout because "trusted" institutions like banks -- or maybe even courts of law -- are involved in the investments.
Large banks, hedge funds and private investors hungry for new and lucrative opportunities are bankrolling other people’s lawsuits, pumping hundreds of millions of dollars into medical malpractice claims, divorce battles and class actions against corporations — all in the hope of sharing in the potential winnings.
The loans are propelling large and prominent cases. Lenders including Counsel Financial, a Buffalo company financed by Citigroup, provided $35 million for the lawsuits brought by ground zero workers that were settled tentatively in June for $712.5 million. The lenders earned about $11 million....Total investments in lawsuits at any given time now exceed $1 billion, several industry participants estimated. Although no figures are available on the number of lawsuits supported by lenders, public records from one state, New York, show that over the last decade, more than 250 law firms borrowed on pending cases, often repeatedly.
Aside from any other consideration, doesn't this kind of investment encourage lawsuits? Doesn't it come perilously close to influencing the outcomes of those lawsuits?
A review by The New York Times and the Center for Public Integrity shows that the inflow of money is giving more people a day in court and arming them with well-paid experts and elaborate evidence. It is helping to ensure that cases are decided by merit rather than resources, echoing and expanding a shift a century ago when lawyers started fronting money for clients’ lawsuits.
But the review shows that borrowed money also is fueling abuses, including cases initiated and controlled by investors... NYT
And it gets even more complicated...
