Litigation Funding and the Problem of Agency Cost in Representative Actions

Abstract

Alternative sources of litigation funding are complicating the already difficult world of complex litigation. While still in its infancy in the United States, the role of equity financing of contingent litigation is now well rooted in Australia, and establishing itself in Canada and the United Kingdom as well. This Article examines the market gaps filled by litigation funders in Australia and then the potential role to be played in the United States. In particular, the Article looks to litigation funding as a way to potentially protect absent class members in class actions and other representative proceedings.