Wednesday, June 3, 2009

Investing in Litigation: Commercial interests vs Justice

Big money is to be made by investing in lawsuits, or so it is claimed by Richard Fields, chief executive of Juridica Capital Management. Many large investment companies are doing it, with investors rolling money into litigation between corporations, where the lawyers fees are enormous and the winnings are potentially even bigger.

But isn't the legal system about finding justice for parties who find themselves in a dispute? It seems to me that making litigation a speculative investment like crude oil will corrode the already fragile justice system. Plus the pressure placed on the lawyers to win the case at any cost may further corrupt legal practitioners who are already encouraged by their firm to win at any cost. I also think the scope for corruption in these matters has been overlooked. From the point of view of an almost legal practitioner, I cannot see how any move to invest in litigation is a good one.