Litigation Finance and the Problem of Frivolous Litigation

M. Abramowicz
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引用次数: 5

Abstract

Litigation finance companies have some incentives to screen plaintiffs applying for financing based on the strength of their claims, but a company may still have incentives to provide financing when the probability that a plaintiff would prevail at litigation is low. The result is that litigation finance may facilitate both meritorious and nonmeritorious claims. This Article argues that fee limitation rules for litigation finance companies can improve their incentives to select only relatively high probability cases, thus enhancing the normative case for states to enact legal reforms allowing litigation finance. A simple version of the rule, which will work if a case is sure to go to trial, allows a successful plaintiff to return no more than the amount borrowed and then the same amount again, plus ordinary interest. This rule will encourage finance companies to lend only where a plaintiff’s probability of winning is expected to be greater than 50%, although the rule can be altered to target lower probability thresholds. The Article also describes alterations to the rule to accommodate the possibility of settlement, cases in which damages are disputed, where injunctive relief is at issue, where financing is provided in installments, and where only a portion of the plaintiff’s expenses are paid by litigation finance companies. Should fee limitation rules become established in the fee limitation context, they also might be extended as a vehicle of tort reform. A requirement that plaintiffs and defendants fund some portion of their litigation costs through litigation finance can reduce frivolous suits and frivolous defenses of meritorious suits and may have advantages over other mechanisms, such as fee-shifting rules.
诉讼财务与轻浮诉讼问题
诉讼融资公司有一些动机根据原告的索赔强度来筛选申请融资的原告,但当原告在诉讼中获胜的可能性很低时,公司可能仍然有动机提供融资。其结果是,诉讼融资可能促进值得和不值得的索赔。本文认为,诉讼融资公司的费用限制规则可以提高其选择相对高概率案例的激励,从而为各州制定允许诉讼融资的法律改革提供规范性案例。该规则的一个简单版本允许胜诉的原告返还不超过所借金额,然后再返还相同金额,外加普通利息,如果案件肯定会进入审判阶段,该规则就会起作用。这一规定将鼓励金融公司只在原告胜诉概率预计大于50%的情况下发放贷款,不过这一规定可以修改,以降低概率阈值。该条还描述了对规则的修改,以适应和解的可能性,在损害赔偿有争议的情况下,在禁令救济有争议的情况下,在分期提供融资的情况下,以及在只有一部分原告费用由诉讼融资公司支付的情况下。如果在费用限制的背景下确立了费用限制规则,它们也可以作为侵权改革的工具加以扩展。要求原告和被告通过诉讼融资来支付部分诉讼费用,可以减少无聊的诉讼和对有价值诉讼的无聊辩护,并且可能比其他机制(如收费转移规则)更有优势。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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