Litigation Financing Attracts New Set of Investors
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Los Angeles trial lawyer Raymond Boucher turned to an unusual lender to get his latest law firm off the ground.
Starting over after a high-profile divorce and personal bankruptcy, the attorney best known as the architect of a $660 million settlement for California clergy-abuse victims turned to IMF Bentham Ltd., one of the major players in the burgeoning and controversial business of litigation funding.
With several million dollars from Bentham, Mr. Boucher said he has been able to run his nine-person firm and take on new cases without worrying about money. He will pay back the funds only if and when the lawsuits underlying the financing are successful.
Commercial litigation funding took hold in the U.S. less than a decade ago, touted as a way for little-guy plaintiffs to fund lawsuits against deep-pocketed defendants. But these days, funders, including publicly traded Bentham and Burford Capital LLC and private funds like Chicago-based Gerchen Keller Capital LLC, cast their mission differently: to give corporations and law firms a way to shed risk from their balance sheets. Rather than betting on one-off lawsuits, today’s funders are scaling up and backing large portfolios of cases to deploy money faster and create more consistent returns for their own investors.
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