The use of the blockchain and the tokenization of litigation funding has been promoted by many parties as the next step in the digital transformation of the industry, unlocking new avenues of access to justice. In a recent post, one industry thought leader puts forward the argument that this technology can also be used to increase opportunities for litigation funding as a vehicle for social impact, and increase the potential for nonprofit legal funding.
An LFJ Conversation with Michael Kelley, Partner, Parker Poe
The use of the blockchain and the tokenization of litigation funding has been promoted by many parties as the next step in the digital transformation of the industry, unlocking new avenues of access to justice. In a recent post, one industry thought leader puts forward the argument that this technology can also be used to increase opportunities for litigation funding as a vehicle for social impact, and increase the potential for nonprofit legal funding.
In a post by Aurelia Le Frapper, co-founder of blockchain litigation funding platform No Impunity, the potential benefits of tokenized litigation funding are outlined. Le Frapper highlights that by using fractional non fungible tokens, the ownership and funding of an individual lawsuit can be distributed more widely, and create more opportunities for impact investors to finance social impact lawsuits.
Le Frapper also points out that this approach can increase the number of lawsuits that are able to be financed, by using a crowdfunding approach that brings a larger number of small value investors together. The article also describes a number of benefits enabled by this approach, including additional transparency provided by the blockchain, more efficient distribution of settlement funds and a more streamlined ability to ensure regulatory compliance through the tamper-proof blockchain records.
