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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.'"

7 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.

  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 . . .

  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.

    2. Re:So what's the big deal? by Marcika · · Score: 5, Interesting

      Is your proposed solution simply not to solve the problem?

      My proposed solution:

      1. abolish legally binding precedent. The accepted interpretation of a law should be a consensus among the legal community, not a decision of one moron 150 years ago. 2. Hire someone competent to rewrite the laws, aiming for clarity and precision. 3. Law should be treated like software: any and all changes should be incorporated into the text, not distributed as amendments. The current legal system looks like Linux 0.01 with all the patches distributed separately up to 2.6.30, and you can win a case by confusing the judge and your opponent into forgetting a critical patch. 3. Make the up to date text of every law easily accessible and searchable by anyone. 4. If you find there is no law for something new, like, say, the internet, say so. Don't torture existing unrelated laws fo fit the new situation. 5. Arguments should be based on merit, not qualifications and the overuse of jargon.

      I'm sure there's more we could do, but these should solve the big problems.

      All your points pretty much described a conversion from the Common Law system as it is practiced in the UK and its former colonies (US, India, Pakistan, Oz etc) to the Civil Law system that has been introduced practically everywhere else and has been used since the times of Hammurabi and the Romans.

      However, the problem is that such a conversion cannot happen while there is a large establishment built on it - the judges would have to re-learn, the lawyers would have to re-learn, the legislators would have a gargantuan task of creating a whole corpus of laws without bad loopholes... It would only happen after a revolution. (The German-style civil law was introduced in China, Japan and Korea in the early 20th century, but the power situation were very different from the status quo in the US today...)

  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 Jurily · · Score: 5, Interesting

      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.

      I don't care about ethics. The problem is, the whole system is geared towards requiring lawyers to function. Unclear laws, obscure precedents, etc. Not to mention the special powers the lawyers' associations have, like automatic trust of a member judge.

      In order to change this, laws should be written at least as unambiguous as RFC's, for starters.