Adrian Ivashkiv
Litigation finance now bankrolls some of the highest-profile lawsuits, attracting both attention and controversy. Because this new market facilitates lawsuits, it might serve either to promote access to justice or to facilitate frivolous, speculative litigation. This Article offers two insights for that ongoing debate. First, it argues that the market for investable lawsuits may be much smaller than is often imagined, muting its social impact in either direction. Second, it provides new reasons to think that, to the degree that litigation finance facilitates new lawsuits, those suits are unlikely to be frivolous.
These insights come from a novel analysis of the mechanics and parties involved in litigation finance—its ecosystem. This Article maps the chain of transactions that together facilitate investment from a far-removed investor into a lawsuit. The chain includes some actors that have received minimal scholarly attention: the funds and their own investors. And it includes others whose roles have not been fully explored: law firms, which often act as financial intermediaries. Each actor sits between distinct markets and so has distinct constraints. Those constraints influence which transactions happen and on what terms—in other words, how many and which suits get funded.