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.'"

Comments

Ah yes.

[Jurily]

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.

Fire Sale

[siloko]

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 . . .

Re:Fire Sale

[malkavian]

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.

So what's the big deal?

[Guido del Confuso]

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.

Re:So what's the big deal?

[Jurily]

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.

Unethical, but not illegal

[BadAnalogyGuy]

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.

Re:Unethical, but not illegal

[Guido del Confuso]

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.

Re:Unethical, but not illegal

[AlXtreme]

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.

Of course I meant SCO

[Chrisq]

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