| dc.description.abstract |
Third party litigation funding, or litigation finance, is a new industry composed of institutional investors who invest in litigation by providing finance in return for an ownership stake in a legal claim and a contingency in the recovery. Its emergence has been recognized as one of the most significant developments in civil litigation today. It will transform access to justice, and affect numerous areas of the law including corporate law, torts, intellectual property, environmental law, employment law and international law. This article addresses litigation finance by institutional investors in the U.S. It describes the empirical reality of the industry; addresses the emergence of a secondary market in legal claims and the prospect of securitization of legal claims; discusses third party funding of international arbitration and; applies a bargaining analysis to understanding the systemic effects of the practice/ Specifically, the article asks what happens when, through litigation funding, litigation ceases to be expensive and uncertain and when parties “bargain in the shadow of financing.” Using bargaining theory the article offers a three-step argument for a move away from a prohibition of litigation funding towards nuanced regulation of the industry. |
