An empirical investigation of third party consumer litigant funding

TY - JOUR

T1 - An empirical investigation of third party consumer litigant funding

AU - Avraham, Ronen

AU - Sebok, Anthony

N1 - Funding Information: Trustworthy data on the LTPF market is more important than ever before, given increased attention on the industry. Media coverage of alleged abuses by the LTPF industry has increased.27 Media coverage both reflects and drives legislative interest.28 Recently, some American states have enacted laws governing LTPF. These reforms have followed two streams. One stream, which is supported by the LTPF industry, promotes transparency. Maine, Nebraska, Ohio, Oklahoma, and Vermont have enacted laws which explicitly allow LTPF funding for consumers with requirements designed to help the consumer decide whether to contract with a funder free of undue pressure and misinformation.29 These reforms vary in detail, but typical provisions include notice and disclosure provisions, standardized contract language, a minimum cancellation period after signing, and bans on attorney referral fees.30 The other stream, which is supported by “tort reform” pressure groups such as the United States Chamber of Commerce, promotes fixed limits on the rate of return paid by an LTPF contract (usually linked to the state’s usury laws). Arkansas, Indiana, and Tennessee have passed laws that cap the premium charged to a consumer for an advance at a multiple of an Funding Information: † Professor of Law, Tel Aviv University Buchmann Law Faculty, and Senior Lecturer, University of Texas School of Law. †† Professor of Law, Benjamin N. Cardozo School of Law. We would like to thank the following members of the consumer litigation funding industry for their comments and encouragement of this research: Harvey Hirschfeld (American Legal Finance Association), Eric Schuller (Alliance for Responsible Consumer Legal Funding), Joshua Schwadron (Mighty), and Alan Zimmerman (Law Finance Group). All views expressed are the authors’. Professor Sebok currently serves as ethics consultant to Burford Capital. Financial support for this research provided to Professor Avraham by the Israel Science Foundation (grant No. 1606/16). Financial support for this research was provided to Prof. Sebok by a Benjamin N. Cardozo School of Law Summer Research Grant. We would also like to thank participants of the 5th IML&E (Paris 2018), private law workshop (Hebrew University 2018), Israeli Law and Economics Association Annual Meeting (Jerusalem 2017), Sienna, Toronto, and Tel Aviv Univ. Conference (Syracuse 2017) and American Law and Economics Association Annual meeting (Yale University 2017).

PY - 2019

Y1 - 2019

UR - http://www.scopus.com/inward/record.url?scp=85090739761&partnerID=8YFLogxK

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AN - SCOPUS:85090739761

SN - 0010-8847

VL - 104

SP - 1133

EP - 1182

JO - Cornell Law Review

JF - Cornell Law Review

IS - 5

ER -