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FightingaQuestionableCostlySchemeThird-PartyLitigationFundingx1cThird-PartyLitigationFundingTippingtheScalesox1cJusticex1corProftx1dx13anissueanalysispaperpublishedinMayx13criticallyexaminedthebusinessox1clitigationx1cundingdescribedvariousx1cormsox1cthird-partylitigationx1cundingandanalyzeditsex1cx1cectonattorneysplaintix1cx1csdex1cendantsinsurersandthecivillitigationsystemasawhole.Litigationx1cundingisrelativelynewtotheU.S.butitisrapidlybecomingacottageindustryinthiscountryandwebelievehasthepotentialtoradicallychangethelegallandscapeandtheciviljusticesysteminwaysthataremostlynegative.Severalstatelegislaturesconsideredlegislationin2011toregulatesuchx1cunding.Sox1carhowevertheseex1cx1cortshavex1cocusedmainlyonaparticularcornerox1cthelitigationx1cundingindustryx13non-recourseloanstoindividualplaintix1cx1csx13andhavebeenlimitedtomarginalx1cconsumerprotectionx1dmeasuressuchassettingstandardstoimprovetransparencyinthetermsox1cthex1cundingarrangement.Suchmeasureshavebeeninspiredbyanecdotalevidenceox1cdeceptivesalestacticsandotherabusesbyx1cundingcompaniesthatcaterprimarilytoindividualplaintix1cx1cs.Yetinmanycasesthelitigationx1cundingindustryitselx1chasdrax1ctedandpromotedthesemeasuresinparttoplacatepolicymakersandconsumeradvocatesconcernedaboutconsumerwelx1carebutmoreimportantlytoestablishthird-partylitigationx1cundingasalegitimatebusinessenterpriseinjurisdictionswhereitmaycurrentlybeunlawx1cul.Webelievethatsux1cfcientgroundsexistx1corenactingablanketprohibitionagainstthepracticeox1cthird-partylitigationx1cunding.Forthosepolicymakerswhobelievethatthepracticecanbetamedthroughregulationwehopethatthispaperatleastconvincedthemox1ctheneedx1corpolicymeasuresthatwouldlimitthenegativeeconomicandlegalimpactsox1clitigationx1cunding.Legislativeex1cx1cortslikethisacrossthecountryareanattempttolegitimatizeapracticethathastraditionallybeendismissedbythelegalcommunityasunethicalandharmx1cultothecommunity.Weworkedcloselywithmembersandstatetradepartnerstodex1ceatbillsthisyearinIllinoisIndianaMarylandNevadaandTennessee.Crax1ctinglegislationthatistrulyex1cx1cectivecannotbedoneinapiecemealx1cashion.Moreoveritwillrequireacarex1culandthoroughanalysistoensurethatallthenecessaryelementsareultimatelyincludedinthelegislation.publiCpoliCYdeCisionmakinganalYsisYoucanfndthecompletethird-partyissueanalysisreportatwww.namic.orgpdx1bpublicpolicy1106_thirdPartyLitigation.pdx1bNAMIC2011TheYearinReview17