Show Me the Money! The Ethics of Alternative Litigation Finance

by Mike Mintz on May 18, 2011 · 0 comments

in Martindale-Hubbell Connected

It has been touted by some as an inventive new way to increase court access to individuals and small companies that do not possess the resources to shoulder the burden of litigation. Others, however, have derided it as a commercialization of litigation that should be banned because it is an unethical device that will further choke the nation’s dockets. Like it or not, alternative litigation financing “(ALF” – no, not the lovable alien from the ’80′s) is here.

Traditionally, third party capital to support litigation activity in the United States involved lawyers collecting contingency fees and doing pro bono work or insurers fulfilling their duty to defend and claim subrogation. ALF involves provision of capital by non-traditional sources to the parties in a litigation or their attorneys. Spanning distinct and diverse markets, ALF can come into play with corporate claims, personal injury claims, and law firm loans.

The business case in favor of ALF posits it as an efficient mechanism that encourages predictability, transparency, and timely returns. The hope is that it can weed out frivolous litigation, because no one will invest in less meritorious or speculative commercial litigation. Thus the champions of ALF say it encourages meritorious cases, rational settlements, competent attorneys, and a self governing market. On the flip side, those opposed to ALF see it as a way of creating a commodities market around lawsuits, encouraging litigation, and cheapening the justice system.

To explore the debate surrounding ALF, Connected is hosting a litigation financing event in May 2011. The highlight of the event will be the CLE-accredited webinar on Thursday, May 19, 2011, at 2:00 PM Eastern Time. There are still a few spots left so register today. You can also get a sneak peak at this exciting CLE program by accessing an abridged version of the Power Point deck that will be used by the presenters. It is available to all Connected members who request access to it by clicking here! If you are not yet a Connected member, you can join for free by clicking here!
Here are the experts who are leading the ALF webinar and doing special postings in Connected:
Richard Fields, Esq., Chief Executive Officers, Juridica Capital Management Ltd., New York.
Posts in Connected by Richard include:
Anthony Sebok is a Professor of Law at Benjamin N. Cardozo School of Law, Yeshiva University. Professor  Sebok is an expert on mass torts, litigation finance, comparative tort law, and legal philosophy. Before  coming to Cardozo in 2007, he was the Centennial Professor of Law and the Associate Dean for Research  at Brooklyn Law School where he taught for 15 years. He was a Fellow in the Program in Law and Public  Affairs at Princeton University from 2005 06, and in 1999, he was a Fellow at the American Academy in  Berlin. Following law school, he clerked for Chief Judge Edward N. Cahn of the US District Court for the  Eastern District of Pennsylvania.

Professor Sebok has authored numerous articles about litigation finance and mass restitution litigation  involving tobacco, handguns, and slavery reparations. He is the author of LegalPositivism in American Jurisprudence, articles and essays on jurisprudence, and is the coeditor of The Philosophy of Law: A Collection of Essays. His casebook, Tort Law:Responsibilities and Redress, which he coauthored with  John Goldberg and Benjamin Zipursky, is used at several leading law schools. Professor Sebok is  frequently quoted in the national media on timely legal issues, such as the September 11 Victim  Compensation Fund. He is currently writing a book with Mauro Bussani of the University of Trieste on  comparative tort law, which will be published by Oxford University Press.

B.A., 1984, Cornell University; M.Phil., 1986, Oxford University;  J.D., 1991, Yale Law School;  Ph.D., 1993, Princeton University.

Posts in Connected by Anthony include:

Milton Regan is the McDevitt Professor of Jurisprudence and Co Director of Center for the Study  of the Legal Profession at the Georgetown University Law Center. His work focuses on ethics,  corporations, law firms, and the legal profession. Before joining Georgetown, Professor Regan  clerked for Judge Ruth Bader Ginsburg on the U.S. Court of Appeals for the District of Columbia  Circuit and Justice William J. Brennan, Jr. of the Supreme Court of the United States, and worked  as an associate at Davis Polk & Wardwell in Washington, DC. At Davis Polk he worked on matters  relating to white collar crime and the defense of attorneys and accountants.

Professor Regan is the author of Eat What You Kill: The Fall of a Wall Street Lawyer (University of  Michigan Press 2004); co author with Jeffrey D. Bauman of Legal Ethics and Corporate Practice (Thomson/West 2005); and co editor with Anita L. Allen, of Debating Democracy’s Discontent: Essays on American Politics, Law, and Public Philosophy (Oxford University Press, 1998), and  numerous articles and book chapters.

B.A., University of Houston; M.A., University of California, Los Angeles; J.D., Georgetown


Paul Sullivan is Senior Vice President at Juridica Capital Managemnet. He has been a partner at a major US law firm practicing as a plaintiff’s lawyer representing clients in federal and stat courts throughout the country in the areas of complex litigation and dispute resolution. His practice focused primarily on the representation of corporate clients in civil litigation involving a wide variety of contractual disputes and tort liabilities, including intellectual property disputes, often on a contingency fee basis.

Mr. Sullivan earned his J.D. magna cum laude from Vermont Law School in 1997, finished  second in his law school class, and was Senior Head Notes Editor of the Vermont Law Review. He is also a partner in Fields Sullivan PLLC.

Aaron Katz is a Director within the Leveraged Finance division of Credit Suisse Securities (USA)  LLC. For the past 5 years, Mr. Katz has been one of the principals of Credit Suisse’s Legal Risk  Strategies & Finance group, which provides hedging, monetization, funding and other capital  solutions for complex litigation situations.

Prior to joining Credit Suisse, Mr. Katz was a Partner in the litigation department of DLA Piper  in the firm’s New York office, where he represented corporate clients in a variety of  commercial, securities, and mass tort matters. Mr. Katz served as an Assistant United States  Attorney for the Southern District of New York. He began his career as an associate with Davis  Polk & Wardwell in New York City.

Mr. Katz is a 1990 graduate of Harvard Law School, and was law clerk to the Honorable Anita  Brody, United States District Judge for the Eastern District of Pennsylvania.

Webinar Playback and Podcast

A special litigation finance podcast and a playback of our webinar will be available to all Connected members who request access to it by clickinghere! If you are not yet a Connected member, you can join for free by clicking here.

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