Betting on Justice

The chamber of the Texas House of Representatives is filled with lawmakers and spectators as the 81st session of the Texas Legislature begins. Legal finance groups in Texas spent between $360,000 and $1 million on lobbying in 2005.

Harry Cabluck/Associated Press

States are battleground in drive to regulate lawsuit funding

By Ben Hallman and Caitlin Ginley

The latest story in the Center's "Betting on Justice" series about the fast-growing litigation finance industry looks at lobbying efforts in U.S. statehouses.

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Betting on Justice

A testimonial thanking Harvey Hirschfeld's company, LawCash, which lends money to people to allow them to fight lawsuits. The company makes money off the interest and the party has the money for a legal fight.

Ruth Fremson/The New York Times

Lawsuit loans add new risk for the injured

By Binyamin Appelbaum and Ben Hallman

The business of lending to plaintiffs has blossomed over the past decade, part of a growing trend in which banks and hedge funds seeking untapped markets are pumping money into other people's lawsuits.

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Betting on Justice

Billing clients interest fees on lawyer loans legal, but uncommon

In 2002, the New York state bar association said attorneys financing a lawsuit with borrowed money may pass the interest costs onto their clients.

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Betting on Justice

Lawyer group to examine ethical pitfalls raised in Center’s “Betting on Justice”

The American Bar Association says it is studying whether third-party investment in lawsuits, in the form of loans to lawyers or financing arrangements with their clients, may run afoul of ethical rules governing attorney conduct.

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Betting on Justice

Linda Faust claimed her stomach cancer was caused by a BNSF Railway plant in Somerville, Texas. Faust, shown hugging her 9-year-old grandson Trenton Ballard, didn't win her 2008 case against BNSF. The law firm representing Faust and other Somerville residents' cases borrowed $3.5 million from a New York hedge fund; the firm must repay the loan regardless of whether it wins.

Scott Dalton/The New York Times

Betting on Justice: Borrowing to sue

By Binyamin Appelbaum and Ben Hallman

Large banks, hedge funds and private investors hungry for new and lucrative opportunities are bankrolling other people’s lawsuits, pumping hundreds of millions of dollars into medical malpractice claims, divorce battles and class actions against corporations — all in the hope of sharing in the potential winnings.

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