Third-Party Litigation Financing News

We haven't spent enough time in the Lone Star State to know whether everything really is bigger in Texas. But when it comes to plaintiffs attorney fees in shareholder M&A cases, it looks like there may be some truth to the cliche.

Fresh off a spike in state-level legal reforms favoring businesses in 2011, on Tuesday Lisa Rickard, the president of the U.S. Chamber Institute for Legal Reform (ILR), visited the CorpCounsel offices to discuss some of her organization's approaches and priorities for 2012.

Gary Chodes is an investor, but it is difficult to say in what.  Chodes, who founded a Chicago-based company called Oasis Legal Finance, uses the courts like a venture capital market, advancing money to plaintiffs in lawsuits. When those lawsuits succeed with lucrative settlements or jury awards, Chodes makes his money back and then some. When they lose, he gets nothing.

If progress to grow the economy and create jobs isn't made in 2012, U.S. Chamber of Commerce President Thomas Donohue on Thursday said this year's elections shouldn't be an excuse.

Some invest their money in stocks, some in bonds, some in real estate.  Increasingly, investors are also putting their money into lawsuits, and University of Iowa law professor Maya Steinitz argues that federal and state governments need to adopt laws soon that regulate this growing market.

The team heading up Credit Suisse's litigation finance unit has struck out on its own in New York under the name Parabellum Capital, becoming the latest independent outfit to enter the growing field of third-party litigation funding in the U.S.

Litigation can be a risky, costly undertaking for any company, in which even the strongest of claims can pale in comparison to the funds needed to bring (or defend) them in court. Caught between the expense of outside representation and the hard budgetary line drawn by a company’s chief financial officer is the chief legal officer, who must balance the merits of a case against the available resources.

There was a very interesting paragraph near the end of Burford Capital’s announcement Monday that it has acquired a British litigation insurance provider. Burford, you may recall, is the litigation-finance company that in November 2010 made a controversial $4 million investment in the Ecuadorean litigation accusing Chevron of despoiling the Lago Agrio region of the Amazonian rainforest. Burford put up the money to pay the plaintiffs’ new lawyers at Patton Boggs after Chevron’s counsel at Gibson, Dunn & Crutcher succeeded in driving their longtime lawyer, Steven Donziger, out of the litigation.