Funding a Business Tort Lawsuit

Business torts, or sometimes known as economic torts, are sometimes the best way to settle unexpected injury for a deal gone badly.  These types of suits can be contain a number of claims, usually stemming from principles at common law that can be brought against entire businesses, their officers, or other parties that contributed to the loss.

A few of the common business torts include: unfair competition – when competitors use illegal means to get an advantage; breach of fiduciary duty – when an officer, board member, employee (or someone else serving in a fiduciary capacity) fails to fulfill his or her responsibilities; commercial disparagement or trade libel – when someone publishes derogatory information about someone to discourage others from working with that individual or company; fraudulent misrepresentation – when a false representation is made knowingly or recklessly with the intention of being relied upon, and then the representation is detrimentally relied upon; tortious interference – wrongful interference with a contractual or business relationship; and trade secret misappropriation – theft of economically valuable information when secrecy is a core advantage of the information.

While all lawsuits can be very drawn out and difficult many of these business tort claims in particular can be very hard to prove.  Since we live in a system that is “innocent until proven guilty,” proof is extremely vital to a successful claim.  Often times that means a higher cost of investigations and discovery to be done.  Not every business can handle these extra stresses and costs of litigation even when they were truly wrong.

But capital from a litigation finance company can provide these resources for businesses or at least supplement what the business is able to do on their own.  The goal of this type of agreement is to help justice be served for businesses that have been truly injured.  This is why most litigation finance companies will first do a thorough evaluation of the claim before signing an agreement.  However, if there is a solid claim litigation finance can be a great asset for businesses seeking to use litigation as a way to recover from an injury.

Topics:  litigation finance, alternative litigation finance, third-party funding, business tort, economic tort, unfair competition, breach of fiduciary duty, commercial disparagement, trade libel, fraudulent misrepresentation, tortious interference, trade secret misappropriation

 Works Cited: How to Fund a Business Tort Lawsuit, LexShares (February 28, 2017).