Investing in others’ court cases
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Funders most often support plaintiffs in complex cases that could lead to substantial awards.
PHOTO: PEXELS
For centuries, turning other people’s legal claims into money-making opportunities has been frowned upon. That started to change in the 1990s, when Australia allowed insolvent companies to engage outside funders to sustain legal claims they might otherwise have run out of money to pursue.
Third-party funding of civil litigation caught on in Britain and some European countries in the 2000s. Gradual acceptance in the United States helped turn the field known as litigation finance, or “lit finance”, into a multibillion-dollar industry, spawning a niche asset class that has drawn in private equity funds and institutional investors.
