As litigation funding grows in popularity and legislation struggles to keep up—much attention is drawn to the outliers who fill funding opponents with fear. Unscrupulous funders get plenty of press coverage, further clouding already contentious issues.
An LFJ Conversation with Michael Kelley, Partner, Parker Poe
As litigation funding grows in popularity and legislation struggles to keep up—much attention is drawn to the outliers who fill funding opponents with fear. Unscrupulous funders get plenty of press coverage, further clouding already contentious issues.
The FCPA Blog explains that multiple funders are currently facing civil suits for theft, fraud, and basically twisting the funding model into a dishonest profit center that harms clients and investors alike. Scams like double-promising shares of awards, or outright theft of funds make the entire concept of third-party funding seem suspect. It also adds fuel to the fires of those who want to over-regulate, or even curtail the practice altogether.
These fraudsters aren’t just harming the Litigation Finance industry. They’re impeding access to justice, which is an essential component of legal funding. Ordinary people wronged or cheated by corporations, governments, or industry norms rarely are able to see their day in court. But litigation funding allows individuals and groups to have proper legal representation so cases can be adjudicated on a more level playing field.
Thus far, funders have largely self-regulated. Ensuring that the unscrupulous are held accountable for misdeeds may become more important than ever in order to maintain integrity across the industry.
