Litigation funding has become a multibillion-dollar industry in recent years, with investors funding lawsuits in the hope of a return on their investment. It's a relatively new concept, but one that has been growing in popularity, and with it, the industry has seen a surge in new players seeking a piece of the pie.
The idea behind litigation funding is that an investor will provide the capital to fund a lawsuit in exchange for a portion of the settlement or award, should the plaintiff win the case. This means that a litigant can pursue a case that they otherwise wouldn't have been able to, due to a lack of resources.
The issue of disclosure is an important one in the world of litigation funding. Under what circumstances can a litigant receiving litigation financing be compelled to disclose details about the funding arrangement? It's a question that has raised its head in recent years, with some arguing that the lack of disclosure could lead to an imbalance of power between the parties involved in the lawsuit.
Lesley Stahl recently reported on the relatively new industry of litigation funding, which one law professor says is quietly transforming the judicial system. The report explored the implications of litigation funding, as well as the difficult questions that need to be answered.
At the same time, there are those who are looking to capitalize on the industry's potential. Matthew Oxman and Allen Yancy of LexShares review the litigation funding landscape and ways to transform a case from a pitch to an investment opportunity.
Despite looming economic troubles, litigation funding for patent cases isn't going anywhere, and is poised to increase, results from a survey conducted by Juristat show. This is due in part to the fact that patent litigation is often very expensive, and with the cost of litigation rising, more companies are turning to litigation funding to help them cover their legal fees.
The nature of litigation funding means that it is often most sought after and most valuable in situations where unforeseen events lead to a need for additional capital. This can include cases where the litigant is facing a much larger opponent, or where the case is likely to be lengthy and complex.
The use of litigation funding is also being tested in the courts. Recently, the US Court of Appeals for the Federal Circuit denied patent owner mandamus petition, clearing the way for the district court to probe who is funding the patent litigation.
It's not often that 80-page judicial orders can fairly be described as page-turners. But if you start reading a Delaware federal judge's ruling on a dispute between two hedge funds over the ownership of a litigation finance portfolio, you might find yourself enthralled by the intricacies of the case. The ruling is a fascinating look into the world of litigation funding, and how it can have an impact on a case.
