When Supervillains Collide: Hedge Funds and Contingency-Fee Lawyers
I could be coming to this way, way late -- I don't keep up on new areas of investing and finance; I'm too busy keeping up with new areas of spending and bankruptcy -- but this seems like an indication that something's wrong with the tort system.
Burford Finance company -- which seems like a richly-financed, well-staffed, up-and-up publicly-traded investment fund -- has an unusual focus. From their website:
HOW WE HELP
- Burford is the world’s largest provider of investment capital and risk solutions for litigation.
- Burford provides capital to businesses and law firms engaged in litigation.
- Burford has immediately available capital and responds in real time.
In other words, they fund litigation. The very thing -- the only thing, frankly -- that keeps the exploding number of lawsuits from exploding higher and louder is money. And Burford has solved that problem.
To be fair, here's how they describe it:
Burford’s capital can be used to pay some or all of the costs of litigation, to finance insurance arrangements or to monetize a claim to provide immediate capital for other business purposes.
Businesses make use of Burford’s capital to alleviate liquidity or budget constraints, to assist with the accounting treatment of litigation matters, or simply for prudent financial management.
We permit meritorious cases to proceed with high quality lawyers when that might otherwise have not been economically possible.
I'm not trying to go all Newt-Gingrich-vs-Bain-Capital here. It's a legitimate business, solving what seems to be a legitimate business need. But there's something inefficient, isn't there, about a legal system so over-the-top, so out-of-control, that it's become a financial sector unto itself? Like oil and gas and semiconductors and insurance and....lawsuits?