Litigation-Finance Firms Bankrolling Plaintiffs
The business of commercial litigation finance is making inroads in the United States, after it was pioneered in Australia and spread to Britain, reports Crain’s New York Business. Litigation funders pay upfront legal costs for plaintiffs or their lawyers in return for a share of a settlement, judgment or verdict down the road.
The finance firms portray themselves as white knights as they help entrepreneurial firms that retain them to wage battles against bigger, better-funded companies that steal their intellectual property, renege on contracts or commit fraud or other offenses against them.
“Many litigation-finance firms are backed by hedge funds, private-equity firms, family offices and other investors who sink millions into these funders, betting on returns that are not correlated with the ups and downs of the stock market.” Crains reports.