A Market for Justice: A First Empirical Look at Third Party Litigation Funding
University of Pennsylvania Law School
Daniel L. Chen
University of Toulouse 1 - Toulouse School of Economics Institute for Advanced Studies/Harvard Law School LWP; Harvard University - Law School
University of Pennsylvania Journal of Business Law, Vol. 15, P. 1075, 2013
U of Penn, Inst for Law & Econ Research Paper No. 14-7
The alienability of legal claims holds the promise of increasing access to justice and fostering development of the law. While much theoretical work points to this possibility, no empirical work has investigated the claims, largely due to the rarity of trading in legal claims in modern systems of law. In this paper we take the first step toward empirically testing some of these theoretical claims using data from Australia. We find some evidence that third-party funding corresponds to an increase in litigation and court caseloads. Cases with third-party funders are more prominent than comparable ones. While third-party funding may have effects on both the cases funded and the courts in jurisdictions where it is most heavily used, the overall welfare effects are ambiguous.
Number of Pages in PDF File: 36
Keywords: Litigation rights, trading, contingency fee, legal services market, comparative, foreign law, maintenance and champerty
JEL Classification: K10, K40, K41
Date posted: March 6, 2014
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