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January 26, 2017

ILR President Lisa Rickard on Third-Party Funding: “A Dubious Proposition”

In an opinion piece for The Recorder, Lisa Rickard, President of the U.S. Chamber Institute for Legal Reform, calls out third-party litigation funding (TPLF) for “undermining our civil justice system by turning it into a risky investment platforms where investors can bet on litigation.”

Although some say litigation funding analysis is rigorous, Rickard points out that TPLF companies are “investors first and foremost” who base their funding decisions on the present value of their expected return. Using the infamous Chevron v. Donziger case to support her argument, Rickard states that “TPLF investors have high-risk appetites and are willing to back claims of questionable merit.”

The piece also notes that TPLF firms have expanded their funding methods by investing in portfolios of cases and law firms, while remaining largely unregulated. “At the very least, TPLF should be subject to robust disclosure requirements” so that judges can fully understand the impact this practice has on our courts, writes Rickard.

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