Investing In Lawsuits Beats the Street
guga31bb sends word on the next wave of investment in a slow market: bankrolling others' lawsuits. The practice sounds on the face of it indistinguishable from champerty. "Juris typically invests $500,000 to $3 million in a case, Mr. Desser said. He would not identify the company's backers, but said that 'on the portfolio as a whole, our returns are well in excess of 20 percent per year.' He added, 'We're certainly beating the market.'"
Treating the legal system as a business opportunity is not new, but to base a business model on it?
You guys should start cutting down on lawyer fees, fast.
well if that doesnt ring any alarm bells!
maybe we should introduce Bernake to these people :D
Investing in cultural naval gazing more like. When the process of legal shikanery yields better returns than investing in real world products then it is apparent that the our culture has run aground . . .
According to the article, they only invest in cases that are pretty much a surefire win for the plaintiff. This makes sense, because if they're in it to make money, then cases that are likely to be questionable are a bad investment.
Seems to me that they're actually doing a public service, by allowing little guys who can't afford to take on big corporations who have clearly done them wrong to proceed with a potentially expensive lawsuit. No longer can the party with deeper pockets simply fight a war of attrition and hope to run the other guy dry. If the plaintiff ends up winning he gets more than he would have gotten had he simply given up, and if somebody else makes a buck off it as well, then so much the better.
I'm not quite sure, but I want to say it's a good thing, since it in a small way reduces the problems for people who should win a case but do not due to lack of funding...
There are many things that people do as professions that are ethically questionable but undoubtedly legal. Not to harp on Maggie Sanger, but the ethics of abortion are intensely debated. However abortion remains legal in the U.S.A. Telemarketing is almost universally reviled, but people still make a living at it.
You would expect that ethics would take a big role in how the legal system is formulated, and for the most part you'd be right. But due to the creativity of human beings, the fruitful edges of legality and ethics can be sought out and exploited.
It relates because the business of software patents is very close to this. Patent litigation in the software sector is much higher than in any other sector and much of that litigation is speculative and funded by exactly the kind of VC TFA is talking about.
My blog
It's cases like this where it shows most clearly that our legal system has little to do with justice.
20% per year is not outrageously high. If a business makes 20% profit per year, it would be doing fairly well, but not spectacularly. The problem is with GUARANTEEING that rate of return to others. That's when it becomes fraud. But simply stating that you're making that much, especially when it's true, is perfectly legitimate.
http://en.wikipedia.org/wiki/Swynfen_will_case
Got promised 1.3mil to win a case, the first case I've run. Had sex with the hot beneficiary. Won the case. Didn't get paid. She married someone else and sued me for misconduct. My life sucks.
And I can make more than 20%
Really? That's great! I always thought that the odds people would offer you were so bad that you'd have to be extremely lucky to make even a small profit (in the long run of course). But that is not the case, you say? What about the efficient market argument, that if horse betting was such a golden opportunity, lots of people would exploit that until the odds were adjusted so that the opportunity vanished?
Swedish plasma phys. PhD student; MSc EE; knows maths, programming, electronics; finance interest; seeks opportunities
You must be new here.
And even an idiot can have a good year in the lawsuit world. Like the stock world, you print the statistics that make you look best to encourage more investors, and you don't want to admit that if you role a fair dice 3 times, for 12.5 % of the people who do it it will win every time, and for 12.5% it will lose every time. You, as the salesmen for the investment services, make your money from the transaction fees (and the bribes and kickbacks ans shwag), not from the investors winning or losing.
The trial attorney's primary asset is his experience in court - his ability to win cases.
But that makes it difficult to hit a bank for a loan.
So he - like generations of skilled craftsmen and professionals before him - seeks financing outside the normal banking system.
There is the side issue of collection from the client who isn't paying his bill. Corporate litigation at the highest level tends to more rather more work and expense than the collision at Third and Main.
Gah. Does the phrase "independent contractor" ring a bell with anyone here? Or are you all still living in the Dorm?
we're certainly beating the market
Lemonade stand beats the street. Fuck, when looking at the past 2 years, anyone who made $1 profit "BEAT THE STREET".
Fortunately most people think its a mugs game which unless you know what you are doing it most certainly is. However all the information on how to pick your bets is already in the public domain. Just do the maths and make sure the betting system you use can sustain 19 losing bets in a row and still give you your required ROI % for each bet when the 20th bet comes in. If you go more than 20 bets without a winner then either even the FSM hates you or you are dumber than the average American president
Build a Man a Fire, and He'll Be Warm for a Day. Set a Man on Fire, and He'll Be Warm for the Rest of His Life.
Y'all want to know why you have so many losers at gambling? Because they try to force a bad hand. In the past I've sublimated my income playing poker and have seen it time and time again. I would know within the first 30 minutes if I was gonna get into a groove or not and I didn't bet decent until I knew whether the groove was there. Its like programming, where you get into the zone and everything just falls into place.
Where you get the big losers, and I've been happy to take their money time and time again, is when they simply refuse to accept they ain't gonna hit the groove. instead of doing as i would and simply walking away they will ALWAYS try to "force" their way into a streak, usually by throwing good money after bad because they are just sure they'll pick up the groove next round. but they never ever do.
That is how you can tell the good poker players from the losers. A good poker player when he sees that either he isn't gonna hit his stride or that he has lost the groove simply picks up his money and says "well boys, its been fun" and walks away. As long as the loser has money or access to credit he is just gonna keep pushing it hoping lady luck will stop by on the next round which of course she never does. So it really ain't brain surgery. it takes a little skill, a little luck, but most importantly it takes the ability to accept that not every night will be yours and to walk away when that bad night is upon you. You'd be surprised how many out there lose their shirts because they can't accept that simple fact.
ACs don't waste your time replying, your posts are never seen by me.
I should have said: /to fund litigation/ .. cough .. for Unix licenses.
You mean like Microsoft paying SCO an "undisclosed sum"
Spot on! Another reason people lose big time is because they bet stupidly I know people who bet their whole salary as soon as they get it hoping to get lucky. Personally I don't believe in luck I try to get 1 bet in 3 (or better) right but the stakes I play at are so small compared to my overall pot that I can cope with 19 losers in a row.
Build a Man a Fire, and He'll Be Warm for a Day. Set a Man on Fire, and He'll Be Warm for the Rest of His Life.
We all bemoan how the non-moneyed are at the mercy of the wealthy in the legal system. Perhaps "angel investors" in a legitimate case are not such a bad idea?
expandfairuse.org
Fortunately most people think its a mugs game which unless you know what you are doing it most certainly is. However all the information on how to pick your bets is already in the public domain. Just do the maths and make sure the betting system you use can sustain 19 losing bets in a row and still give you your required ROI % for each bet when the 20th bet comes in.
But suppose a few people did the maths and bet accordingly. Wouldn't that drive the odds in a direction that made the profitability very small?
Swedish plasma phys. PhD student; MSc EE; knows maths, programming, electronics; finance interest; seeks opportunities
Begging your pardon; where's the dichotomy?
As the US turns to heavy litigation, the targets flee. Start-ups consider greener pastures.
Want proof? The country that led the industrial revolution is now a service industry nation.
As consumer protection lawsuits pervail, industry leaves. Small planes, diving boards, vaccines, and other products are not made in the US simply because of litigation and the threat of litigation.
The risks to the nation are huge including massive trade defecits, collapse of the economy due to devalued hard currancy, and shortages of supplies in time of need as we depend on overseas manufacturing. The latest risk is the swine flu. Nobody in the US makes the vaccine. In a pandemic, demand in the home country may cut supplies off entirely as the limited capacity is used elsewhere. This is the result of runaway litigation.
I worked in a shop at one time where the owner refused to provide service to laywers. They were the second most likely bunch to not pay, or demand second and third services unpaid. Only on other group exceeded laywers in not paying for services.
Welcome to a litigious society.
The truth shall set you free!
Old American Dream: Rugged self reliance, hard work and innovation lead to success and propserity.
New American Dream: Have the government take care of you while you attempt to win a lawsuit or the lottery.
According to the article, they only invest in cases that are pretty much a surefire win for the plaintiff.
But what happens when a win is not a certainty at all? What if the real purpose of the suit is to harass the defendant or coerce them into settling? Would it be OK to provide 3rd-party funding for the RIAA lawsuits? Most of their cases are too flimsy to go to trial. But for the most part, these cases throw off enough cash to justify the investment. Just as "junk bonds" often have high yields, "junk lawsuits" might offer a good return on investment.
And what happens when the 3rd-party funding is for a questionable case whose main goal is to impede a competitor, coincidentally for the benefit of the funding source? Microsoft's involvement with SCO is one example.
In those cases where the defendants prevail, the "litigation investors" losses are capped at 100% their investment as far as I can tell. The actual plaintiffs may lose more. In fact, they may even go bankrupt, leaving the defendant with an uncollectible judgment. I wish there was a way for the litigation investors to share in the downside of a loss. Using SCO vs. IBM as one example, Why shouldn't Microsoft have to pick up the tab for SCO's liability, proportional to their funding of the scheme?
Nah the bookies like people who win if only because they are such a small proportion that they don't impact profits significantly and it's good advertising. There are plenty of people doing the maths already the bookies make their money out of the ID ten T's that are looking for that one big win. Trust me I lose a lot of money betting I just make more on average.
Build a Man a Fire, and He'll Be Warm for a Day. Set a Man on Fire, and He'll Be Warm for the Rest of His Life.
6. Laws must be written in a way that is understandable to laymen. If the IRS can do it, so can the legislators.
7. The total text of all laws applying to individuals cannot exceed one million words (that's about 10 normal novels, or four really thick ones). For businesses, you get another million.
There are so many laws of such complexity that no layman can possibly be aware of them all - much less understand them. If "ignorance of the law is no excuse" then it must be possible for a normal person to actually know what the law is.
Enjoy life! This is not a dress rehearsal.
In order to change this, laws should be written at least as unambiguous as RFC's, for starters.
. . . we would have no Internet today; we would still be waiting.
IETF: "We plan to have ARP through legal by 2012. TCP and UDP might make it sometime around 2050."
Schroedinger's Brexit: The UK is both in and out of the EU at the same time!
Good lawyers are actually legal hackers. They look for the edge cases where the law is broken for the good of their client. There's really a lot in common between programmers and lawyers.
All ideas^H^H^H^H^Hprocesses in this post are Patent Pending. (as well as the process of patenting all postings)
When robbery is permitted (or, at least, can be carried out with little risk) it will flourish, since it's easier to steal something than to create it. This is why Somali pirates are so successful at present.
The enactment of "loser pays" laws would reduce this activity by increasing the cost of this sort of theft.
1. Investment is made in lawsuit that is likely to win, but can't continue for lack of funds
2. Justice is done
3. The little guy wins, could not have done it without investor's help
4. Profit! (Commission for the vendor)
If there is anything unethical about the situation, it's that these lawsuits are in a position where farming out the commission to 3rd party investors is the only way to see justice done and avoid being trampled by richer entities.
As other posters have pointed out, the real problem is that the laws are so complicated no one can comply with them. I would suggest a few simple changes to (eventually) fix the problem. Firstly, have all laws expire after a fixed length of time, unless renewed by the legislature. Secondly, require all legislation to be read aloud in the legislature, in full, with a quorum of members present, before it can become law. Thirdly, enact a lifetime ban on practicing law in a jurisdiction where a person has been involved in enacting a law. This would put an end to the domination of most legislatures by lawyers who, when they leave the legislature, make a very profitable career out of interpreting the gobbledygook they wrote into the law.
2. Hire someone competent [faqs.org] to rewrite the laws, aiming for clarity and precision.
You mean, like, a lawyer?
That's exactly what we've got now. Corporate Amerika has hired large teams of professionals (competent to satisfy corporate's needs anyway) and made sure those professionals got placed into office by using whatever social engineering skills were necessary to manipulate the voters. Those so-called professionals are more commonly known as congressmen and senators.
I appreciate that you are willing to answer my questions. Thanks.
Nah the bookies like people who win if only because they are such a small proportion that they don't impact profits significantly and it's good advertising.
But if you really have found a winning strategy you'd be betting more and more money. Others would want you to bet on their behalf and pay you for doing that. Soon enough, the impact would be painful for the bookies. Apparent conclusion: Such winning strategies can't exist for long, because if they did, the bookie would go bankrupt quickly. Don't you agree?
Swedish plasma phys. PhD student; MSc EE; knows maths, programming, electronics; finance interest; seeks opportunities
Look at the kind of crap that the SCO Group pulled over the last six years...
Conversely, don't create new laws for situations already covered by old laws just for the sake of looking progressive (e.g. If fraud is already illegal, there shouldn't need to be separate laws stating fraud is illegal through the mail, over the phone or over the internet).
Support Right To Repair Legislation.
as a business method then they'd have to stump up licensing fees in order to do it...
Donald 'Duck' Dunn: We had a band powerful enough to turn goat piss into gasoline.
Already have a friend who does this he's the one who clued me in if it gets to the stage you are making too much money out of them they will just ban you from betting with them.
Build a Man a Fire, and He'll Be Warm for a Day. Set a Man on Fire, and He'll Be Warm for the Rest of His Life.
The Civil court system exists to transfer money from people without law degrees to people that have them.
As far as I can tell there are no legal ethics and lawyers always act in their self interest, NOT in the interests of their client.
I wish that it where not so, but it is.
It is a system run by lawyers, with oversight by lawyers, for the benefit of lawyers at the expense of everyone else. They will lie or do anything else they need to to get their way.
If you don't belive me, sell your house to an attorny and see what happens. These people are pure evil.
Education is never quite free...
Every problem has a solution that is simple, easy and wrong. Selling our Liberty for a little Security is a much too de
yeah right Go all in in TMR today on a pullback in the mid .50s
you will see 3.00 by Aug
I think that will beat your 20%
beaten down oil co, when summer demand is coming up. I hope tomorrows Schork report drives it down further so I can double up.
and I think ATPG looks just as good.
These arent pennys being manipulated and pumped. nyse with vol yesterday over 3 mil
20% per year is not outrageously high
No?
Looks pretty good to me.
Then you are a smart player.I always separated my "stake" money from my "pot" money. As I won I would slowly put the stake back into my pocket so i ended up playing with only money i had won at the table. that way the worst i would do is leave with the same amount I went in with. It actually worked quite well, but time and time again I saw those just as you describe, betting every dime they had hoping to "win big". And of course they were always the big losers.
I never went home rich, maybe $400-600 extra in my pocket, but I never walked out broke either. the most I ever left at a table was $50, because if I felt lady luck wasn't in my corner I said "well boys, its been a pleasure" and walked away. For me the keys to gambling are these- never bet on a sucker hand, like trying for an inside straight,never throw good money after bad, and ALWAYS accept the fact that some nights just aren't gonna be yours and be man enough to walk away when that is the case. I always stuck by those rules and for 3 years I never had to feed my gas sucking Pontiac a dime out of my own pocket.
ACs don't waste your time replying, your posts are never seen by me.
... this differs from the way the ACLU backs certain cases how exactly?
Have gnu, will travel.
Once upon a time, our elected official were people who had built their own businesses
No, once upon a time our elected officials were wealthy children of privilege, former military officers, and guess what, lawyers (John Adams and Thomas Jefferson and Abraham Lincoln). You know when we had an influx of small businesspeople? During the "Republican revolution" of the 90's, when a bunch of rural, extreme right-wing small businessmen suddenly came into power. They tried to destroy the environment, take off all restraints on corporate greed, and tried to cripple the federal government, before falling out of power themselves due to their rampant corruption.
Today, our electees are basically all lawyers - and we have an economy in meltdown, archaic business efforts are kept around, and even subsidized because it buys votes, and we have a financial system where one can do better with destruction rather than construction.
Our electees are not all lawyers. A good percentage have law degrees, but it's certainly not anywhere near "all." And they are, indeed, ELECTEES. They were elected to office by the people, and it's not up to you to criticize. Besides which, non-lawyers tend to write horrible laws. They're not good at it.
The economic meltdown was not caused by legislators having law degrees, it was caused by unrestrained greed and deregulation of financial institutions. The Gramm-Leach-Bliley Act was a major cause of the financial meltdown. Gramm was an economist. Leach and Bliley were small businessmen. None were lawyers. Maybe we needed MORE lawyers in Congress, huh?
Here is the missing link: http://www.pakin.org/complaint
FYI, it is a rant generator. Getting too many clichés in one post makes me suspicious.
Every problem has a solution that is simple, easy and wrong. Selling our Liberty for a little Security is a much too de
Whatever you think about the Book of Mormon, it was published in 1830, and it has an interesting description of "judges" (what we would call "lawyers") creating cases out of thin air, because they were paid for the time they spent on cases (See Alma 11).
The idea is not novel at all.
Every problem has a solution that is simple, easy and wrong. Selling our Liberty for a little Security is a much too de
I get it. You have learned to copy and paste.
Yep, the quote from the Good Book is "[T]he love of money is the root of all evil." (Emphasis added.)
As your post so subtly hints, money is just a tool.
Every problem has a solution that is simple, easy and wrong. Selling our Liberty for a little Security is a much too de
I disagree that with the claim that laws can't be simplified. There are really only three types of crimes: Bloody, monetary, and control. We could replace the confusing crap of various specific rules with 'guideliness' and rule that all 'non-guideline' based stuff immediately gets kicked up to appeal to verify. Example of a simple law. Any claim of taking money/item of value without the legal right to it is entitled to triple reimbursement plus imprisonment time. Followed by an auto-inflation adjusting chart for amount stolen vs. Time in prison, with a set of factors to increase, such as "fully accidental theft = no time and just double reimbrusement", "Negligenct but not accidental theft = 1/2 time", "Taken from charity = time *2) "Taken as revenge = 1/3 time", "Taken in anger without revenge = double time". Things like that. This in effect creates one set of rules for both non-violent break and entree and say embezzlement. It would make things fairer.
excitingthingstodo.blogspot.com
Apparent conclusion: Such winning strategies can't exist for long, because if they did, the bookie would go bankrupt quickly. Don't you agree?
Afaict bookies base there odds on the number of bets they get for each outcome (such that whoever wins the bookie wins). Therefore if you push things too hard then the odds will adjust such that your strategy no longer works.
However if there is a relatively small value of bets made by rational informed betters and a much larger value made by irrational uninformed betters then things could easilly work out in favour of both the bookies and the rational informed betters.
note: i'm known as plugwash most places but i screwd up registering that here somehow in the past and now can't register
Afaict bookies base there odds on the number of bets they get for each outcome (such that whoever wins the bookie wins). Therefore if you push things too hard then the odds will adjust such that your strategy no longer works.
That sounds just like how I would have guessed it. I'm just thinking that the rational betters would push things to the limit, to make more money.
Swedish plasma phys. PhD student; MSc EE; knows maths, programming, electronics; finance interest; seeks opportunities