The Bad Rep

Receiving justice by through the use of our legal system (USA) is challenging, especially for the average individual.  As the debate for reform marches forward, litigation finance is a point that should not be overlooked.  Victims pursuing justice can get the needed financial support to continue their case, and they can go about their lives as close to as normally as possible.

Lately, the litigation finance industry has come under fire in the media, both because of ignorance about how litigation finance works and some misdeeds by a minuscule number of bad actors.  Lacking the needed information, the media has heavily relied on anecdotes and commentary from “tort reform” advocates.  These advocates represent insures and others aiming to suppress settlement payments.  In this environment, misinformation about litigation financing is perceived as fact.

An example of misinformation provided by the media is that litigation finance promotes frivolous litigation.  In reality, there is no crisis of frivolous lawsuits which barring litigation finance would fix.  Further, litigation financers seek claimants who already have a lawyer that is willing to put time and money into a case.  Research shows that the median recipient did not even pursue litigation financing until 10 months after their claim.  In short, litigation financers are choosy, and reject more cases than they accept.

Lawmakers have fortunately recognized litigation financing’s important role and are working tirelessly to protect it.  They have introduced some consumer-friendly legislation that aims to improve transparency licensing for companies.  Eliminating litigation finance would cause irreparable harm to victims, not protect them.

Keywords:  Litigation finance, misinformation, victims, justice

Work Cited:  Anthony Sebok, Lawsuit Lending Gets a Bad Rap, Crain’s New York Business (June 12, 2018)