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Duty In The Litigation-Investment Agreement: The Choice Between Tort And Contract Norms When The Deal Breaks Down, Anthony J. Sebok, W. Bradley Wendel

Vanderbilt Law Review

This Article begins by describing the market for investment in commercial litigationA Litigation-investment transactions share features of existing economic relationships, such as commercial lending, liability insurance, contingent fee-financed representation, and venture capital, but none of these existing practices furnishes a suitable analogy for regulating litigation investment. Like third-party insurance, litigation investment is a way to manage the risk associated with litigation while bringing to bear the particular subject matter expertise of a risk-neutral institutional actor. Insurance companies and litigation investors may be systematically in a better position to reduce the risk of litigation, either through risk pooling or information-cost advantages. …