Leading Litigator Recognizes Equalizing Power of Litigation Finance

If you aren’t convinced already about how litigation finance can level the litigation playing field, listen to the founding partner of Bickel and Brewer, a leading New York litigation firm.  In a recent opinion essay in Crain’s New York Business, William A. Brewer III persuasively argues for the merits of litigation financing.  In particular, he explains how litigation financing can make the judicial system both more efficient and more fair.

Brewer begins with the observation that, when a David-sized plaintiff takes on a Goliath-sized corporation, the plaintiff’s biggest obstacle is the time-consuming and expensive litigation process.  Wealthy clients and the large law firms that serve them have a well-established playbook, which includes tactics such as superfluous motions and burdensome discovery practice.  These tactics are intended as a means of drawing out the litigation process, so that litigation costs, not the merits, become the decisive factor.

When litigation finance comes into play, however, the effectiveness of these tactics is neutralized.  As Brewer points out:

 Although litigation finance enables smaller plaintiffs and boutique firms to surmount the obstacles put in their path by large corporations and defense counsel, doing so is costly and wasteful for both parties. As traditional defense firms who have long employed these tactics realize that litigation finance renders such tactics obsolete, the superfluous motions and discovery games will stop. The desired result is pure, unaltered, merits-based litigation—the way it was always intended to be.

This effect will become more widespread as access to litigation finance continues to expand.  Brewer notes that, according to a recent survey, 28% of litigation attorneys used litigation financing in 2016, up from just 7% in 2013.  If this trend continues, defense firms will have to start re-writing their playbooks.

Brewer is also encouraged about the growth of litigation finance because it can be such a good way to invest capital.  As he explains, more and more capital will flow to litigation finance:  “[f]undraising by asset managers for the litigation asset class has gained popularity thanks to attractive fundamentals. For one, the success of litigation finance is not correlated with the capital markets, meaning it is a way to make money when the markets are going down. The industry also has sophisticated participants and offers the promise of outsize returns.”  And as more capital becomes available, financing arrangements can become more sophisticated and more tailored to the needs of particular plaintiffs.

Topics:  litigation finance, legal reform, third-party funding, litigation costs, boutique law firms, commercial litigation, middle market

 Works Cited:

William A. Brewer III, Great Equalizer Coming to New York Law, Crains New York Business (May 10, 2017) available at http://www.crainsnewyork.com/article/20170510/OPINION/170509934/great-equalizer-coming-to-new-york-law

TownCenter Partner Team

TownCenter Partners, LLC lead Asset Manager is Mr. Roni A. Elias. From modest beginnings, and with the help of a hand-picked dream team of professionals we have built one of the most dynamic and fastest growing companies in the country. TownCenter Partners LLC(TCP) is a real estate partner and master-planner providing development, leasing, management, and third party services. The company’s demonstrated ability to apply big ideas in creative and innovative ways has played a defining role in the firm’s success. Yet, TCP's most important insight has been the core understanding that it is not sight lines or site plans, but human activity, that defines a space and creates a place.

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