Litigation Financing and the Public Interest in Justice

Many stories about third-party litigation financing focus on how it can move money around – from funding companies to litigants and from losing litigants to winning ones.  Perhaps the most well-known recent story along these lines involves the successful invasion of privacy lawsuit by pro wrestler Hulk Hogan against the Gawker website, which was funded by billionaire Peter Thiel, and which resulted in Gawker’s bankruptcy and a $31 million settlement payment to Hogan.  But litigation financing is about more than wealth; it is also about justice

Providing fair and equal access to justice has long been a goal of the American legal system.  But it has been an elusive one.  Litigation is expensive and time-consuming, even when an attorney agrees to provide representation in return for a contingent fee.  When someone has been the victim of wrongdoing and injustice, he or she may deserve compensation for their injuries but may not be able to afford it.

There are numerous non-profit organizations that have done great work in providing equal access to justice for certain categories of victims or in certain kinds of cases.  But even the most effective and aggressive of these organizations often lack resources to deal with all of the cases that they might become involved with.  And these organizations often work in a relatively narrow field, leaving many victims without any organization to which they can turn for help.

This means that many less affluent parties still struggle to gain access to justice.  According to one estimate, there are only five to six thousand lawyers available to serve the legal needs of more than 45 million low-income individuals, who might be eligible for some form of legal aid from a public interest organization.  Even as lawyers’ professional groups call upon all lawyers for a greater commitment to pro bono work, an enormous void remains.

This is where private, third-party litigation funding can come in.  In those cases where there are significant financial remedies available to compensate for wrongdoing, the invisible hand of private markets can direct litigation funding to parties who need and deserve it.  In this way, litigation funding is not just an instrument for making people wealthy – it is also an important instrument for doing good.

Works Cited:

Jason M. Wilson, Comment: Litigation Finance in the Public Interest, 64 Am. U. L. Rev. 385 (2014)