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Investing In Lawsuits Beats the Street

Posted by kdawson on from the some-dare-call-it-champerty dept.

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.'"

20 of 203 comments (clear)

  1. Ah yes. by Jurily · · Score: 5, Insightful

    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.

    1. Re:Ah yes. by thrillseeker · · Score: 2, Insightful

      Once upon a time, our elected official were people who had built their own businesses - people who knew how hard it sometimes was to make payroll - and people who knwe how hard it occasionally was to be unable to make payroll. We had laws that encouraged growth, which requires someone, somewhere to voluntarily invest something, whether it be his own time or someone else's discretionary nickel. When something worked it was praised, encouraged, duplicated and expanded, and when something didn't, it was simply discarded. 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. One wonders at correlation ...

  2. Fire Sale by siloko · · Score: 5, Insightful

    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 . . .

    1. Re:Fire Sale by Jurily · · Score: 3, Insightful

      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 . . .

      No, it's just the logical conclusion of a culture of worshipping money.

    2. Re:Fire Sale by malkavian · · Score: 4, Insightful

      No, it's the logical conclusion of a culture that considers ethics of no consequence.
      You can worship money all you like, and still create a fantastic environment (run your own company? In a company that you enjoy being in? They're not there for the express purpose of making your life fun, they're there to chase money. Ethical companies make a great place to work, the leeches will burn you out and leave you broken). However, all this activity boils down to is parasitic behaviour. When you can make more by discarding ethics, not producing anything and basically sucking the life out of anything that does produce, then the problems start.

  3. So what's the big deal? by Guido+del+Confuso · · Score: 5, Insightful

    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.

    1. Re:So what's the big deal? by Jurily · · Score: 5, Insightful

      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.

      They're solving a problem that shouldn't exist in the first place: the legal system is a capitalist enterprise, with heavy price fixing by the lawyer community.

      Oh, and a perverted enough legal system that lawyer skill actually matters in a case.

  4. Unethical, but not illegal by BadAnalogyGuy · · Score: 5, Insightful

    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.

    1. Re:Unethical, but not illegal by Guido+del+Confuso · · Score: 4, Insightful

      You can't make laws as clear as technical documents. That's a quixotic notion held by those who fail to appreciate that other people see things vastly different from how they do. The difference between an RFC and a law is that you can reasonably expect people to follow the RFC because it is in their own best interest to do so. A law, on the other hand, will always have an exception, a border case, or some other mitigating circumstance that will require interpretation. That is the job of the courts and lawyers.

    2. Re:Unethical, but not illegal by dword · · Score: 2, Insightful

      You can't make laws as clear as technical documents. That's a quixotic notion held by those who fail to appreciate that other people see things vastly different from how they do.

      But isn't that the whole reason for which we have laws?

    3. Re:Unethical, but not illegal by Jurily · · Score: 2, Insightful

      So is the death penalty

      Most everywhere?

    4. Re:Unethical, but not illegal by AlXtreme · · Score: 4, Insightful

      Of course you can. Rule #1: Follow the intent, not the letter, And then make the intent as clear as humanly possible.

      I don't know if making laws that vague would solve anything, instead it would probably make things much more worse. All those lawyers would have a field day in arguing that the intent of a law is something different to what the rest of us think, or use the intent of one law to negate a completely different law.

      Things aren't perfect as they are, but the legal system isn't this complex merely due to the lawyers. All these laws have to be as clear as possible, in intent and letter, which is the task the legislative branch has when coming up with a law.

      The problem is that each year many laws are added to the system (because the legislative branch has to keep up the act) but there is very little incentive to actually remove laws to simplify the system. The more laws there are in the system, the harder it will be for a layman to understand even a portion of these laws and the more ammunition lawyers have in the courtroom.

      Or to continue the analogy, what if you had 100 non-deprecated RFC's that define a simple protocol like SMTP? You would get a whole branch of IT workers through whom you would have to dictate your emails, because the whole system is so complex.

      --
      This sig is intentionally left blank
    5. Re:Unethical, but not illegal by Chrisq · · Score: 2, Insightful

      This is however, very borderline. It is, if not illegal, very close, depending on the exact wording of the contracts, and the exact nature of the particular cases (and also depending on the jurisdiction).

      You mean like Microsoft paying an "undisclosed sum" /to fund litigation/ .. cough .. for Unix licenses.

    6. Re:Unethical, but not illegal by NonSequor · · Score: 3, Insightful

      That's what I meant when I said the law has to objectively resolve disputes with subjective components. Intent is subject to interpretation, and the law specifies mechanisms for testing for intent.

      What is and isn't illegal is simply the first question. The second question is, how should mitigating factors be considered in answering the first question? The third question is, how is a violation punished? The fourth question is, to what extent should mitigating factors be considered in determining the intensity of punishment used?

      A system that doesn't attempt to consider all elements of the case is tyranny.

      So how do you weigh all of the pertinent considerations against each other? Is one of them always most important? Or maybe one of them should only be important when it crosses a certain threshold.

      The whole point is that the legal system is an attempt by humans to establish methods for making good guesses which take into account as many relevant factors as is possible. Since they're at best good guesses (and sometimes bad guesses) bad results do sometimes occur. However, it's better than the binary alternatives of either not punishing any crimes or punishing all suspects.

      --
      My only political goal is to see to it that no political party achieves its goals.
    7. Re:Unethical, but not illegal by zotz · · Score: 2, Insightful

      First you need to decide whether equity or predictability is more important in your law.

      all the best,

      drew

      --
      FreeMusicPush If you want to see more Free Music made, listen to Free
    8. Re:Unethical, but not illegal by mokus000 · · Score: 2, Insightful

      . In a technical document, however, you want to get the result that the manufacturer intended, so you don't try to find loopholes in the technical document.

      Unless you're Microsoft... *ducks*

      --
      Additive identity, multiplicative cancellation, distributive multiplication over addition: pick any two (unless 1 = 0)
    9. Re:Unethical, but not illegal by stranger_to_himself · · Score: 2, Insightful

      The whole point is that the legal system is an attempt by humans to establish methods for making good guesses which take into account as many relevant factors as is possible. Since they're at best good guesses (and sometimes bad guesses) bad results do sometimes occur. However, it's better than the binary alternatives of either not punishing any crimes or punishing all suspects.

      Further you can only really address most of these problems as they occur, hence the need to rely on precedent a lot of the time.

  5. Of course I meant SCO by Chrisq · · Score: 4, Insightful

    I should have said:
    You mean like Microsoft paying SCO an "undisclosed sum" /to fund litigation/ .. cough .. for Unix licenses.

  6. American Dreams by moeinvt · · Score: 2, Insightful

    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.

  7. Courts exist so that Lawyers can make money by Anonymous Coward · · Score: 1, Insightful

    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.