Third-Party Litigation Funding and the Dodd-Frank Act

16 Tenn. J. Bus. L. 15 (2014)

9 Pages Posted: 19 Feb 2015

Date Written: December 1, 2014

Abstract

This article questions whether the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) should apply to the growing phenomenon of third-party litigation funding, in which outside entities invest in litigation or arbitration for profit. Currently, the United States, Australia, and the United Kingdom lightly regulate third-party litigation funding, but the majority of the day-to-day oversight comes through voluntary funder self-regulation. Most third-party funders of commercial disputes are private hedge funds that are subject to the securities regulations of the jurisdictions in which they operate. The Dodd-Frank Act is a relatively new statute in the United States that regulates derivatives, among other financial products. This article begins to explore whether a third-party litigation funding contract is a derivative by examining an Australian High Court decision. If so, then third-party litigation funders may fall within the purview of the Dodd-Frank Act in the future, if their litigation portfolios or assets under management grow large enough.

Keywords: third-party funding, Dodd Frank, derivatives, securities, litigation funding

Suggested Citation

Sahani, Victoria, Third-Party Litigation Funding and the Dodd-Frank Act (December 1, 2014). 16 Tenn. J. Bus. L. 15 (2014), Available at SSRN: https://ssrn.com/abstract=2566597

Victoria Sahani (Contact Author)

Boston University School of Law ( email )

765 Commonwealth Avenue
Boston, MA 02215
United States

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