Today on Bite-Sized Business Law, we tackle a topic that we’ve only alluded to in previous episodes, which is the funding of mass tort litigation by outside financiers. Dubbed “opaque capital” by one of today’s guests, its use for funding complex mass tort litigations gives rise to some tricky legal, business, and ethical predicaments that we discuss in detail. Joining us for this conversation are legal scholars Samir Parikh and Maria Glover. Samir is the Robert E. Jones Professor of Advocacy and Ethics at Lewis & Clark Law School and a nationally recognized expert on mass tort restructurings and business reorganizations. His recent article, 'Opaque Capital and Mass Tort Financing’, is sure to garner a lot of attention, as did his recent testimony before the Senate Judiciary Committee regarding the Texas two-step bankruptcy trend. Maria is a Professor of Law at Georgetown University, where she specializes in civil procedure and complex litigation. Maria has also testified before congressional committees and her work is not only published in leading law journals but cited by the media and the US Supreme Court. Tune in to hear Samir and Maria’s hot takes on third-party litigation funding, opaque capital, opportunities for exploitation in the mass tort litigation space, settlements, disclosure, regulation, and more!
Key Points From This Episode:
• The history of litigation finance and why mass tort litigation is attracting bad actors.
• Distinguishing between class actions, mass torts, and multi-district litigations (MDL).
• Third-party litigation funding (TPLF) and contingency fees in the US versus Australia.
• The role of TPLF in mass torts, particularly for ad campaigns and lead generation.
• Defining opaque capital and the “new breed” of financiers moving into this space.
• Critical points in the process when TPLF has ugly consequences: the Alchemist's Inversion.
• Maria’s take on the perceived problems with mass tort litigation settlements.
• Claim generation and the trouble with funding that is contingent on quantity for payout.
• Some of the ways that non-meritorious claims affect everyone negatively.
• Outlining the ethical and legal obligations law firms have when accepting funding.
• Opinions on disclosure and transparency when it comes to financier agreements.
• The European movement towards more aggressive regulation in the mass tort space.
• Final comments on how this all relates to the shared ownership of law firms.
Links Mentioned in Today’s Episode: