The Economics of Third-Party Financed Litigation

40 Pages Posted: 13 Dec 2011

See all articles by Keith N. Hylton

Keith N. Hylton

Boston University - School of Law

Date Written: December 12, 2011


This paper examines the law and economics of third-party financed litigation. I explore the conditions under which a system of third-party financiers and litigators can enhance social welfare, and the conditions under which it is likely to reduce social welfare. Among the applications I consider are the sale of legal rights (such as contingent tort claims) to insurers, to patent trolls, and to financiers generally.

Keywords: third-party financed litigation, barretry, torts, litigation and procedure, champerty, private incentive to litigation, social incentive to litigate, economics of litigation, maintenance, subrogation, patent trolls

JEL Classification: K00, K13, K19, K39, K40, K41, K49

Suggested Citation

Hylton, Keith N., The Economics of Third-Party Financed Litigation (December 12, 2011). Boston Univ. School of Law, Law and Economics Research Paper No. 11-57, Available at SSRN: or

Keith N. Hylton (Contact Author)

Boston University - School of Law ( email )

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