This is Terry Bollea you may know him as Hulk Hogan and this is Peter teal the billionaire co-founder of PayPal and this. Is Roy Strom hello Roy covers the business of law for Bloomberg law blockbuster revelation by tech billionaire Peter Thiel admitting he is behind. A campaign against Gawker including that monster lawsuit by Hulk Hogan when Peter Thiel financed Hulk Hogan’s invasion of privacy lawsuit many pundits thought it was an example of a new phenomenon sweeping the. Legal sector called litigation finance but that suit wasn’t really litigation finance that was just Peter Thiel trying to. Settle a score I was convinced that if I didn’t do something nobody would so then just what is litigation financing a nutshell litigation finance is when a third party invests. In a lawsuit in exchange for a share of the profit.
The idea is that a good legal claim is like an asset it’s worth money but there’s risk the case is only worth money if you win in court so. If you lose the investment firm is out all their money now having anyone other than the direct parties to the litigation profit from a suit has historically been frowned. Upon this is the legal doctrine known as champer d here’s legal scholar Maya Stein eats to explain jeopardy is just a fancy legal. Name for the basic principle that traditionally the law prohibited a non-party from funding a party for a profit chamfer D laws date back to the Middle Ages in England when unscrupulous feudal lords. Would fund the claims of their underlings in order to harass one another the idea was to protect the court system which at the time was weak from being used. For purposes that are not achieving justice over time the practice of funding others legal claims for profit went the way of jousting in the plague until fast forward to.
1993 reanimated dinosaurs terrorized small children beanie baby mania sweeps the nation and in Australia New South Wales rolls back its antiquated Champa tea laws. Maker’s there wanted to allow outside interest to fund class-action lawsuits which were notoriously expensive sensing opportunity entrepreneurial investors started financing other cases in need. Of funding and taking a cut of the profits an industry was born litigation funders love to say that some plaintiffs without money from the funders because wouldn’t be able to afford the. Costs of litigation whatever injustice happened to these parties would just go unchallenged eventually the practice found its way back. To England and the United States where litigation funding has become big business today by one recent study there’s as many as 40 funders together they have about 10 billion in in capital.
In the past year alone they spent close to two and a half billion investing in cases that growth has caught. Regulators lawmakers and big law firms off-guard in many ways the world of litigation finance is still the Wild. West currently there aren’t any regulations or laws that directly regulate litigation finance at all one concern over litigation finance is whether to lead to frivolous. Lawsuits funders just kind of point to the economics of it.
And they say it doesn’t make sense for us from. A money standpoint to be paying for cases that aren’t gonna win another concern is whether the.
Funders will exert control over plaintiffs and key decisions in the case like when to settle or when to go to trial and litigation funders will tell. You that that’s not something they’re doing it’s a really hot button issue for litigation funders in the end litigation funding isn’t about revenge it’s about. Making money and if there’s one thing we know where there’s money lots of money regulation is never far behind if I had to. Predict I would say that some measure of disclosure will certainly become part of the regulatory landscape in the coming years very soon what kind of disclosure just how much needs to. Be disclosed and at what point of the litigation does it mean to be.