Comments on: “More Attorneys Exploring Third-Party Litigation Funding”

By: Charles

Charles — Sat, 03 Jul 2010 15:15:03 +0000

I didn’t think it was legal in the United States to do fee sharing ie. split fees. I knew most companies would do the advance but never thought they could buy part of the case.

Here is another article that confirms this here in the U.S. http://www.lawleaf.com/faqs/litigation-funding.html

I’m assuming this will be handled as an asset class here in the U.S.?

By: Titus

Titus — Tue, 08 Jun 2010 16:14:12 +0000

The article seemed to admit that it is. Apparently champerty and maintenance are no longer illegal in a large number of states.

By: Gino

Gino — Mon, 07 Jun 2010 19:53:26 +0000

A better question might be how is this not champerty and maintenance?

By: Titus

Titus — Mon, 07 Jun 2010 19:36:10 +0000

Apart from the name, how is this not illegal fee splitting? Just because the third party isn’t being paid out of the attorney’s contingency fee doesn’t mean that it doesn’t pose all of the same problems. It’s one thing to let Bob’s Widget, LLC assign a chose in action. It’s another thing entirely to have a third party paying counsel’s bills during the course of representation. This is bad and there’s no two ways about it. The course this sort of thing has taken in the UK (with non-legal businesses acquiring interests in law firms, etc.) militates against, certainly not in favor, of this kind of thing.