“Plaintiffs lawyers are already driving the bus on class actions,” Beisner told the Litigation Daily. “To add investors to the process turns those cases not into litigation, but into a business proposition.” Once plaintiffs lawyers can offload risk to investors, Beisner said, there’s little to keep them from filing meritless claims. And an onslaught of such claims, he added, can force defendants into settling even dubious cases.
Beisner and his team at Skadden have delineated their fears in a 16-page report published by the U.S. Chamber of Commerce’s Institute for Legal Reform, which, like Beisner, spends a lot of time trying to outsmart the plaintiffs bar. The paper’s conclusion: Third-party litigation financing should be banned in the U.S., at least in the context of class action or mass litigation.
