Yep. That is what Richard Fields is doing. He is the chief executive of Juridica Capital Management, an organization which runs a fund that invests in one side of a lawsuit in exchange for a share of any winnings. The company invests in commercial litigation.
This article in the New York Times reports that a unit of Credit Suisse and Juris Capital have a similar business model, as do several unnamed hedge funds.
Juridica has $200 Million available, with an average investment of $7.5 million.
Are you offended? You shouldn’t be. These companies can level the playing field in commercial litigation. All too often those with meritorious claims cannot bring those claims because they lack the financial resources to do so. And saying that such firms encourage frivolous litigation is like saying the presence of liability insurance for defendants encourages frivolous defenses.
And you wouldn’t say that, would you?
Thanks to Litigation and Trial for writing about the New York Times article.