Apr 01, 2020 - 12:59pm

Who’s Funding Those Lawsuits?

Ever wonder who’s funding those lawsuits over everyday household products and prescription drugs?

Increasingly, it’s hedge funds that invest in lawsuits in exchange for a cut of any settlement or award.

The practice is called “third party litigation funding,” and it’s turning our courtrooms in casinos.

This multibillion-dollar global industry operates in secret, and no one—not the companies being sued and usually even the judge—knows how much money a funder has invested or how much influence it has over the lawsuit. Trial lawyers can tap millions of dollars through the secret deals they’ve signed with litigation funders without disclosing it to anyone.

This money can be used for everything from recruiting new clients to paying office rent. Litigation funding puts investors’ interest ahead of victims.
As an executive at one of the world’s largest funders recently admitted, they “make it harder and more expensive to settle cases.”

States, Congress, even the federal courts can pass laws and rules that promote transparency, not secrecy.

It’s time to drag the business of betting on other peoples’ lawsuits out of the shadows and examine it in the light of day.

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