For some time now, investment firms have raised money to help law firms finance large and complicated litigation with the hope of generating a profit from the success of the lawsuit. Now, even hedge-funds are entering the fray according to the Wall Street Journal.
Critics of litigation financing say that the introduction of investors, who stand to make a profit from the outcome of litigation, may skew the litigation in their favor at the expense of the litigants. Proponents say that large and complicated litigation can be overwhelmingly expensive for many law firms who, without litigation financing, would be unable to pursue meritorious cases.
What effect, if any, the entrance of hedge-funds into the competition for litigation investment opportunities has remains to be seen.
Read the full WSJ article here.