My gut tells me that this is bad. However, intellectually I know that our court system is heavily skewed towards people and organizations with lots of money. So if this is a tool to help level the playing field, I'm all for it. If this swamps the courts, all the better, because that will force legislators to act, which will then cause a debate, which will be useful to society.
Should You Be Allowed to Invest in a Lawsuit?
11–20 of 107 posts
Re: Should You Be Allowed to Invest in a Lawsuit?
#12I think the concern with investing in lawsuits should be focused on secondary motives. Lawsuits with lots of investors will have attorneys with secondary motives, such as keeping the case active as long as possible to continue to attract more investors, rather than resolve it. Perpetual cases could bog down courts in never-ending lawsuits and countersuit challenges, a legal version of Mutually Assured Destruction.
Do lawsuit claimants have a right to consume unbounded judicial time and public money (to pay for judical staff, the courts)? Legal cases stuck in court for years consume time and energy that could be directed at resolving other legal challenges. Time spent in court is ultimately a tax on the public, regardless of the outcome.
Re: Should You Be Allowed to Invest in a Lawsuit?
#13No. No. No. Not unless the court can level the playing field by ordering the recipient to disgorge invested funds if the opposing party can prove need. Otherwise well funded litigants will bury cash strapped kitigants in fees.
This already happens, routinely. Some libertarians play up the advantages of a "loser pays" system in ameliorating that problem, but AFAICT it just raises the stakes, again to the detriment of the party with less tolerance for losses.
Re: Should You Be Allowed to Invest in a Lawsuit?
#14I think the concern with investing in lawsuits should be focused on secondary motives. Lawsuits with lots of investors will have attorneys with secondary motives, such as keeping the case active as long as possible to continue to attract more investors, rather than resolve it. Perpetual cases could bog down courts in never-ending lawsuits and countersuit challenges, a legal version of Mutually Assured Destruction. Do…
Not only that, consider all the other parties that wish to do you or your company harm could invest in lawsuits against you brought by parties that have nothing to do with them.
Re: Should You Be Allowed to Invest in a Lawsuit?
#15This will perpetuate a broken system and widen the economic gap as companies start profiting on the demise of the opposition.
It's one thing when someone invests as a form of aid, however, I see this being gamed for profit.
Re: Should You Be Allowed to Invest in a Lawsuit?
#16Good thing we also have the First Amendment. Citizens United v. FEC -- majority opinion essentially said that money is free speech ("Because spending money is essential to disseminating speech..."). And spending that money to fund litigation seems like a very strong kind of speech, whether or not its motivated by greed (profit).
Now that's an interesting argument.
The US allows champerty and maintenance already, so it's not an issue in the US.
Re: Should You Be Allowed to Invest in a Lawsuit?
#17I think the concern with investing in lawsuits should be focused on secondary motives. Lawsuits with lots of investors will have attorneys with secondary motives, such as keeping the case active as long as possible to continue to attract more investors, rather than resolve it. Perpetual cases could bog down courts in never-ending lawsuits and countersuit challenges, a legal version of Mutually Assured Destruction. Do…
Not only that, consider all the other parties that wish to do you or your company harm could invest in lawsuits against you brought by parties that have nothing to do with them.
[deleted]
Re: Should You Be Allowed to Invest in a Lawsuit?
#18Interesting. A few years back I led a project at a Startup Weekend that was about crowd-sourced legal defense. (LVLR)
http://sandiego.startupweekend.org/2011/03/08/9-new-startups...
Of course it wasn't a product that was more than a prototype, but I am fully onboard with crowd funding playing a much larger role in the world than it currently does - whether it's down to a) investing, b) getting some sort of other reward/product or c) more directed alternative to typical charity.
What's discussed in the article was one of the ideas my product guy and I bandied about, but it didn't seem plausible at the time... although, when the JOBS act was passed I did feel that maybe it was possible if you could somehow incorporate your lawsuit?
Right now I'm the lead engineer for a crowd-funded charity site and sometime in the not-too-distant future I'd like to return to this.
Re: Should You Be Allowed to Invest in a Lawsuit?
#19No. No. No. Not unless the court can level the playing field by ordering the recipient to disgorge invested funds if the opposing party can prove need. Otherwise well funded litigants will bury cash strapped kitigants in fees.
This already happens, routinely. Some libertarians play up the advantages of a "loser pays" system in ameliorating that problem, but AFAICT it just raises the stakes, again to the detriment of the party with less tolerance for losses.
Well, yes and no. It makes it less onerous to defend against certain types of lawsuits (patent trolls come to mind). How many times do we hear stories of some "little guy" who is in the right who gets screwed over because s/he was facing years of litigation that would have bankrupted them even if they won the case?
The other major benefit to a loser pays system is that it does raise the stakes - for frivolous lawsuits. Legal action is, in some ways, very cheap in the United States. Making the loser foot the bill is a good way to make corporations and their ilk take a second glance litigation as a tool.
Re: Should You Be Allowed to Invest in a Lawsuit?
#20I think the concern with investing in lawsuits should be focused on secondary motives. Lawsuits with lots of investors will have attorneys with secondary motives, such as keeping the case active as long as possible to continue to attract more investors, rather than resolve it. Perpetual cases could bog down courts in never-ending lawsuits and countersuit challenges, a legal version of Mutually Assured Destruction. Do…
Wouldn't such behavior be considered unethical and possibly grounds for disbarment? After all, that's definitely not in the interests of the client.