Consumer Litigation Funding and Medical Malpractice Litigation: Examining the Effect of Rancman V. Interim Settlement Funding Corporation

30 Pages Posted: 8 Nov 2017

See all articles by Jean Xiao

Jean Xiao

Vanderbilt University - Law and Economics

Multiple version iconThere are 2 versions of this paper

Date Written: December 2017

Abstract

Consumer litigation funding, a growing industry in the United States, is an alternative credit source for cash‐strapped tort plaintiffs. Financiers give plaintiffs nonrecourse loans that are premised on lawsuit outcomes. This article is the first to empirically examine the effect of consumer litigation funding. Specifically, I explore the impact of nonrecourse loans on medical malpractice litigation outcomes by exploiting the variation in timing and geography from two Ohio policy changes: the Ohio Supreme Court's 2003 ban of funding in Rancman v. Interim Settlement Funding Corporation and the state's subsequent legislative legalization of funding in 2008. Using closed‐claim data from the National Practitioner Data Bank, I find evidence that the availability of funding increases claim payment and claim duration.

Suggested Citation

Xiao, Jean, Consumer Litigation Funding and Medical Malpractice Litigation: Examining the Effect of Rancman V. Interim Settlement Funding Corporation (December 2017). Journal of Empirical Legal Studies, Vol. 14, Issue 4, pp. 886-915, 2017, Available at SSRN: https://ssrn.com/abstract=3067107 or http://dx.doi.org/10.1111/jels.12167

Jean Xiao (Contact Author)

Vanderbilt University - Law and Economics ( email )

Nashville, TN
United States

HOME PAGE: http://law.vanderbilt.edu/phd/students/jeanxiao.php

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