“It’s always a good time to invest in litigation”

by Ted Frank on June 3, 2009

So says Richard W. Fields, chief of Juridica Capital Management, which is earning over 20%/year on their portfolio of investments in litigation. (Jonathan D. Glater, “Investing in Lawsuits, for a Share of the Awards”, New York Times, Jun. 3).

Walter is critical at Point of Law; Larry Ribstein warns against overregulation at Ideoblog.

{ 1 trackback }

PointOfLaw Forum
06.03.09 at 10:23 am

{ 2 comments }

1 Richard Fields 06.03.09 at 11:00 am

Dear sirs,
In response to concerns about third-party capital sources increasing litigation, I would make the point that all of our investments involve major law firms that have carefully vetted their cases. The majority of our investments involve cases or groups of cases that were already on file long before our investment was made. Before investing, we undertake an exhaustive due diligence process to evaluate merits and business context, among other things. We also use world class, independent lawyers who are not involved with the case to assist us with our evaluation. To date, we have reviewed over 170 cases and have selected only 19 for investment.

I firmly believe that outside capital may make the commercial litigation market more efficient and more transparent. Our team is very interested in this public policy dimension of our business. Yesterday, our Chairman Lord Brennan and my co-founder, Tim Scrantom, spoke about these issues at a conference sponsored by the Rand Institute for Civil Justice. Here is a link to the conference website. http://www.rand.org/events/2009/06/02/email_invitation.html

Outside investors have no interest in funding litigation that is not meritorious and highly likely to succeed. Moreover, the number one reason we reject cases relates broadly to a lack of alignment of interest between lawyers and clients. More than once we have rejected a case for investment because outside counsel have over spent relative to the settlement value of the case. Although we do not see this every day, it is an issue to which we pay close attention.

Sincerely, Richard Fields

2 Alton 06.03.09 at 12:54 pm

I am not a fan of litigation as a business/retirement investment, but if the following is true:

“…there’ll be funding available for cases that are good cases…”

than why can’t we have loser pays?

If the cases are so good, will the funding dry up with the added risk?

Comments on this entry are closed.