Wall Street is trying to turn a profit on the tragedy of others, complain some Philadelphia personal injury attorneys. Many court-watchers are appalled, charging that Wall Street investors are trying to turn the U.S. justice system into a roulette wheel. Profit-hungry investors — large, national banks, hedge funds and private investors — are ponying up hundreds of millions of dollars to bankroll lawsuits for other people in exchange for a healthy share of any court awards. Medical malpractice lawsuits, high-end divorces, catastrophic personal injury cases and class-action lawsuits against major corporations — any lawsuit with the lure of a huge settlement — appear to be fair game for what are called litigation-finance investors.
Litigation-finance isn’t a new concept. The first litigation-finance firm opened its doors in San Francisco in 1994. Alan Zimmermann, founder of Law-Finance Group, explained the benefits of litigation investment in an interview with The New York Times:
“If you want to use the civil justice system, you have to have money. If there’s less money, you’d have less litigation. but then you’d also have less justice.”
While a review of litigation finance conducted by The New York Times and the Center for Public Integrity did reveal some benefits when investors start fronting money for court costs, it also uncovered some nasty abuses that hurt the people they purport to help.
Benefits: Investors argue that the cash they provide enables more people to have their day in court. Leveling the financial playing field gives both parties equal opportunity for justice. Investor money can pay for high-priced experts and fund extensive evidence preparation, strengthening court cases and removing resources from the justice equation.
Abuses: There are a few thorns among the roses. Often the use of investor money comes with strings attached. To maximize profits, investors sometimes chose their targets and initiating proceedings. Investors also prefer to exert control over lawsuits, directing litigation to increase profits.
When you hire the Pearce Law Firm in Philadelphia, we work for YOU, not a bunch of investors who are in it only for the money.