Thursday, April 29, 2010
Tony Sebok (Cardozo) has posted his piece "The Inauthentic Claim" to SSRN. This is a very important paper arguing against the usual rule limiting types of litigation financing. The implications of the thesis for mass torts is significant. If people could sell lawsuits the landscape of aggregate litigation would change in significant ways. Here is the abstract:
This Article argues that third parties should be able to invest in lawsuits to a much greater degree than is currently permitted in most jurisdictions in the United States. The laws of assignment and maintenance limit the freedom of litigants to sell all or part of their lawsuits to strangers. I argue in the Article that the foundation of both doctrines is based on something I call the theory of “the inauthentic claim.”
The theory of the inauthentic claim asserts that there is a quality, separate and in addition to legal validity, which confers “authenticity” to a lawsuit. It does not presuppose that “inauthentic” lawsuits are more likely to be spurious, fraudulent, or frivolous than “authentic” lawsuits. It holds, instead, that the mere fact that a third party involved him or herself in the suit for the wrong reasons (either by taking an assignment in the suit or supporting the suit), is proof that the suit is against public policy.
This Article examines two arguments that might be used to defend the theory of the inauthentic claim, one from history and one from jurisprudence. I conclude that neither argument is persuasive. I conclude the Article by sketching a research agenda based on empirical evidence that would help policymakers and judges choose the socially optimal set of rules for third party investment in litigation.
(h/t Chris Robinette at Torts Prof Blog)