Advancing a Free Society

The Costly Freedom to Sue

Wednesday, November 17, 2010

The newly expanding practice of litigation finance is rich in pitfalls and promises. The contingent fee normally works well for the auto collision at Fourth and Main. Ordinary lawyers run a large portfolio of cases, most of which settle after some preliminary haggling. There is therefore no need for a specialist firm to supply a new deep pocket.

Those contingent fee lawyers, however, may not have sufficient wealth to back a complex class action for mass torts. Seeking compensation for 9,000 workers at ground zero is perilous business. The class action format will probably not work if the disparate features of the individual cases outnumber the common elements. A coordinated attack by joining multiple plaintiffs needs a credible legal theory which then has to be backed with intense fact preparation, with only modest economies of scale. Not easy.

Continue reading Richard Epstein in the New York Times