The Information Resource For Accident Victims In Pennsylvania

Potential For Third-Party Litigation Funding

The Wall Street Journal recently published an article entitled “Hedge Fund’s $100 Million Bet: Iran Will Pay for Terrorist Attack.” As the title suggests, the article discusses how a hedge fund is funding a federal court lawsuit, which is attempting to collect money against the government of Iran for a terrorist attack that occurred years ago. This story is just one example of third-party litigation funding, which is quickly becoming one of the most rapidly growing trends in the civil justice system.

Third-party litigation funding is the practice of an investment firm ( perhaps  a hedge fund) providing money to one or more of the parties in order to fund the cost of litigation. The transaction is established so that the investment firm is not involved in the legal aspects of the case.Ultimately, if the case is won in court or settled then the investor is repaid the amount invested based upon the agreed rate of return. Consequently, third-party investment funds are weighing the likelihood a claim will succeed and then deciding to share in the risk.

Like all new trends, third-party litigation funding has sparked a heated debate over whether the phenomenon will negatively impact the judicial system. But before addressing the pros and cons, it is first important to acknowledge the distinction between funding of commercial plaintiffs (i.e. when a company sues another commercial entity) compared to the funding of private plaintiffs (individual person suing for some personal wrong).

Ultimately, third-party litigation funding is still a new trend. It’s rapid pace is likely to bring a lot of attention to the issue in the very near future, especially by those involved in the judicial process.

One thought on “Potential For Third-Party Litigation Funding

  1. Woah this particular web site is usually superb i favor examining your content. Keep on the excellent paintings! You already know, many people are searching all over due to this facts, you might help them to tremendously.

Leave a Reply

Your email address will not be published. Required fields are marked *

Get Help Now

Carpey Law - Memberships & Recognitions

Logo of at Carpeylaw.comLogo of at Sample image for Teens Against Distracted Driving at Logo of Wounded Warrior Project at Logo of Million Dollar Advocates at Logo - Stuart A. Carpey profile at Justia lawyers Directory Thumb image of Mainline Today Top Lawyer 2012 Thumb image of Suburban Life Awesome Attorney 2012 Stuart A. Carpey is a Top Rated Personal Injury  Attorney BBB rating A+