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'Legalist' Startup Automates The Lawsuit Strategy Peter Thiel Used To Bankrupt Gawker (gizmodo.com)
An anonymous reader writes from a report via Gizmodo: "Two Harvard undergraduates have created a service called Legalist that uses what they call 'data-backed litigation financing,' analyzing civil lawsuits with an algorithm to predict case outcomes and determine which civil lawsuits are worth investing in," reports Gizmodo. The process is very similar to what billionaire Peter Thiel did when he secretly funded a lawsuit from Hulk Hogan against Gawker Media. "Legalist says it uses an algorithm of 58 different variables including, as [Legalist cofounder] Eva Shang told the Silicon Valley Business Journal, who the presiding judge is and the number of cases the judge is currently working on. The algorithm has been fed cases dating back to 1989 and helps people figure out how long a case will last and the risks associated with it. In a presentation at Y Combinator's Demo Day on Tuesday [Legalist was developed as part of Y Combinator's Summer 2016 class], the founders claimed that the startup funded one lawsuit for $75,000 and expects a return of more than $1 million. Shang says the $1.40 is earned for every $1 spent in litigation financing, which can prove to be a profitable enterprise when you're spending hundreds of thousands of dollars." Shang told Business Insider in reference to the Gawker lawsuit, "That's the kind of thing we're staying away from here." The company will supposedly be focusing on commercial and small-business lawsuits, and will not be backing lawsuits by individuals.
If you don't want to be bankrupted, don't post a nude sex tape of someone who was filmed without his knowledge, and then ignore a court order to take it down. Just saying.
startup wanted to cash in on this. Lawsuits as a Service! Can't wait until this extends to software patent litigation.
Awesome. Unleashing AI and Big Data on the Law. The fireworks are going to be awesome on this one. I give it 10 maybe 20 years before the whole system implodes. Everyone will be sued into oblivion.
:T:R:A:N:S:
> the founders claimed that the startup funded one lawsuit for $75,000 and expects a return of more than $1 million
Or, you know, a loss of $75,000 if they lose the case.
Gawker's behavior bankrupted Gawker, end of story. Peter Thiel picked up the legal bills so that the person they wronged could afford to sue them. It's a sad commentary on the American legal system that even a celebrity with some extant wealth can't financially sustain a lawsuit on his own.
"If there was a gay Afro-Puertorican Linux distribution, I'd give it a try" ~lucm
"Legalist says it uses an algorithm of 58 different variables including, as [Legalist cofounder] Eva Shang told the Silicon Valley Business Journal, who the presiding judge is
That different judges give different outcomes is already common knowledge but putting an actual dollar value on it might have significant repercussions.
What happens when someone asks for a judge to recuse themselves because the litigation value tripled when the judge got assigned? It's a lot harder to defend the integrity of the system when supposedly impartial actors have quantifiable effects.
I stole this Sig
...if it really worked, people would keep it a secret and wouldn't try or need to get VC money to fund it.
When your legal system becomes the realm of financial investment trading you KNOW your system is broken.
I look forward to the creation of a new stock exchange. Lets call it LAWDAC. You can now day trade on court cases.
Let Asians build the world's fastest trains and the continent-wide energy systems we can only dream about. We have lawsuit AI technology we can use to rob each other blind as we cash those unemployment checks.
Good idea. No one would ever dare to sue any corporation, because if they lost they would be broke after paying the legal fees of the corporate lawyers. Corporations would rule everything!
And if you were the Supreme Court, they would have listened to you. Thing is: Gawker didn't know that and thought they were on firm legal ground. If they knew this would happen they wouldn't have done it. This is the problem: You don't find out if you're right or wrong until you've paid lawyers millions of dollars. Shouldn't be like that.
The courts are a crapshoot. With a different judge and jury, Hogan and Thiel could have lost.
Also "Two Harvard undergraduates" This is why everyone hates Harvard.
No. The correct solution is for the courts to assign all lawyers for both sides at random from a list, and pay both sides equally.
I recall reading a science fiction story in Analog (I think in the 1980s) about judges being profiled as a way to win court cases. Items such as arguments used based on their history, delivery of arguments and review of previous cases and their judgements. The one particular case highlighted that the one judge preferred short, direct arguments, and this was used to help win the case. If I recall, the lawyers etc had earpieces (or maybe briefcases) with a wireless link to a van outside the court which had a data connection back to the office where the computer gave real time updates. I am not sure what the story was called .....
This is the chief argument against complex regulations, however well-intentioned. The perfect example is Dodd-Frank here in the United States.
Citibank's CEO noted that Dodd-Frank would "widen the moat" -- that is, give them a competitive advantage because Citibank's large enough to pay lawyers and compliance staff without much impact to the bottom line.
Regional banks -- and we need them to thrive because economic centralization is as bad or worse than political centralization -- have to comply with this regulation too, only it's proportionally more costly to them. Here's what the CEO of M&T Bank in Buffalo, NY said about it:
"Rapidly changing technology in combination with the need for continued expenditure on compliance infrastructure is creating a dual challenge for regional banks. ... Traditional banks are increasingly caught in a vise—they cannot afford to shortchange investment in the mobile and online banking technologies that their clients want, as well as in the cybersecurity that will keep their customers’ information and assets safe from global criminals. Yet banks also have to simultaneously bear the higher regulatory and compliance expenses and decreased revenues brought about by legislation and regulation meant to address the ills of the last crisis. The largest banks, on the other hand, are able to take advantage of their massive size to shrug off the impact of compliance costs, fines and penalties, and still have the wherewithal to invest in the latest technologies. As a result, they are increasingly gaining a competitive advantage over these smaller banks."
There's a provocative and interesting book called The Triumph of Conservatism: A Reinterpretation of American History by Kolko, a socialist. His thesis is that the famous "progressive" regulations of the early 1900s benefited large, established corporations -- essentially they used Congress to create favorable regulatory regimes to stifle competition and upstarts.
This is why you should be extremely skeptical of dense "regulations" drafted by lobbyists working for entrenched companies. If you benefit, it's usually by accident.
The loss of a month's rent once ruined an entire goddamn year and nearly left me homeless. I'm not in quite such dire straights myself anymore, but I still can't afford to risk that much fucking money; and more to the general point, the vast majority of Americans definitely can't.
False: 83% of American households have some form of subscription television service. 3-4 months of that would cover at least enough of a mid market law firms time to assess the merits of case. What you really mean is most Americas don't believe strongly enough in their own cases to do without the boob tube for a quarter.
Sorry life is about choices and the truth is here in the US most people actually do have them. Almost all US household statistics greatly under report the income of the poor. They don't take into account things like the EIT for example. I am not say there are not many people in the US who are struggling, but we are actually talking about a very tiny minority when you want talk about the those who can't scrape $300-$500 together to have someone evaluate a case where they have a legitimate grievance.
We also have these things called public libraries were ordinary citizens like you or I could get access to either online resources or request the reference books needed to get an idea if our case was worth having a professional spend an hour looking at, and we could not afford to chance it based on a guess.
Repeal the 17th Amendment TODAY! Also Please Read http://www.gnu.org/philosophy/right-to-read.html
It's not always a matter of not being able to manage one's own money as much as not having a way to earn enough money to manage in the first place.
I didn't mean growing your own food in a garden. That's taking economy way further than 99.9% of people need to. I meant buying food from a grocery store and preparing it in your kitchen instead of eating out at restaurants, which are a prime way that many middle class people waste thousands of dollars a year.
It really doesn't, if you're simply trying to lose some weight and not training to be a pro athlete. Your body is capable of moving without spending a cent or even going outside. There's plenty of exercises you can do in your living room. Personally I've never set foot in a gym in my life.
The vast majority of the middle class people I'm talking about have a car. They can choose to not go out drinking unless they have a designated driver (bars themselves are a big waste of money too). I've never taken a taxi in my life. If you're too poor to get a $1000 loan for a car and that causes you to have to take taxis to work which cost you thousands over time, then you're a genuinely poor person caught in a trap... but that's a rare situation.
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This is wrong. Dangerously wrong.
If a judge gives a bad order that will hurt you, you file for a stay of that order pending appeal. Ignoring the order leads to punishment, as happened here! The Supreme Court has limited jurisdiction, they are simply going to ignore almost all of the petitions for a writ of certiorari sent to them. And it you will still get punished for just ignoring the order even if you were right! You can't just wait for orders from a higher court to comply. If the judge refuses to stay their order while you appeal it, you have to comply. Period. If they were wrong, well, you'll have to convince the courts of that on appeal. You don't get to just ignore everyone but the Supreme Court because you don't like an adverse ruling, it simply does not and hasn't ever worked that way.
I can't believe people modded this up, because it displays utter ignorance of legal process. Seriously, at least a few of you should have read Groklaw. You can go back and find that even SCO knew better than to flat-out ignore a court order like that. You can find many times where they asked for stays, plenty of times where they sent surreplies and dug in their heels at every opportunity to avoid complying, but not so much where they simply ignored the order.
So let that sink in for a moment: Gawker sunk below SCO's level here.
I tend to blame the client here, because I have to believe anyone could have made it through law school if they were giving advice that bad. If not, they're free to explore a legal malpractice claim against their own lawyers. Because what they did is so mind-bendingly stupid that you have to be willfully ignorant of legal process to think it makes any kind of sense that you can ignore anyone lower than the Supreme Court.