lawsuit lending

Two recent losses by litigation-funding outfits led to this interesting report from the Wall Street Journal. One tidbit: "Litigation finance is a growing field that now includes a number of specialty firms that maintain multimillion-dollar portfolios devoted to legal investments. Hedge funds and individual investors also occasionally purchase stakes in litigation as part of a broader investment strategy. There at least five litigation-finance firms in the U.S., U.K. and Australia that have $100 million or more under management. With litigation finance, funders advance money to help people and companies pay for lawsuits they would otherwise be unable to pursue. Critics are concerned that the practice could give outside investors undue influence over legal decisions and allow frivolous lawsuits to go forward, driving up the overall cost of litigation."