TortsProf Blog

Editor: Christopher J. Robinette
Widener Commonwealth Law School

Wednesday, October 21, 2020

Goudkamp & Nolan on an Empirical Perspective of Contributory and Professional Negligence

James Goudkamp & Donal Nolan have posted to SSRN Contributory Negligence and Professional Negligence:  An Empirical Perspective.  The abstract provides:

Although contributory negligence is usually associated with accident cases, it is frequently pleaded by defendants who have been sued for negligence in the performance of their professional duties, and yet very little is known about the impact of the doctrine in professional negligence litigation. In this chapter, we seek to fill this gap, by means of both empirical and qualitative analysis of recent contributory negligence case law in the United Kingdom. This analysis suggests that there are certain distinctive features of the operation of the contributory negligence doctrine in the professional negligence context.

October 21, 2020 in Scholarship | Permalink | Comments (0)

Tuesday, October 20, 2020

Ginsberg on Palsgraf and Med Mal

Marc Ginsberg has posted to SSRN Palsgraf Meets Medicine:  Physician Beware!--The Unidentified Non-Patient and the Duty of Care.  The abstract provides:

This paper focuses on the intersection of proximate causation and physician liability. Specifically, the issue is this: should a physician be liable to an unidentified victim of a motor vehicle accident caused by a physician’s patient who was not warned to avoid driving due to a medical condition, prescription medication or procedure which may impair the patient’s driving ability? This paper surveys the jurisprudence of various states in search of the answer.

October 20, 2020 in Scholarship | Permalink | Comments (0)

Friday, October 16, 2020

Arbel on Slicing Defamation by Contract

Yonathan Arbel has posted to SSRN Slicing Defamation by Contract.  The abstract provides:

In considering the problem of fake news, many debate the merits of expanding media liability through the tort doctrine of defamation. In this Essay I present an alternative: assigning liability for false accusations by contract. I develop and examine the utility of using truth bounties — contractual agreements to pay a bounty to anyone who can falsify a story.

On reflection, contractual tools appear more productive and robust than tort liability; in particular, truth bounties can encourage responsible media reporting, crowd-source the search for truth, send a refined signal of trust in the story, and chill false reports. Truth bounties are also realistic and compatible with the incentives of media outlets, although some of the procedural details need to be developed for mass adoption.

October 16, 2020 in Scholarship | Permalink | Comments (0)

Friday, October 9, 2020

Billauer on Addressing Anti-Vaccine Speech

Barbara Pfeffer Billauer has posted to SSRN Addressing the Demonstrable Effects of Anti-Vax FEAR (False, Endangering, and Reckless) Speech With Mandated Public-Health Education and Government Speech.  The abstract provides:

The 2018-2019 measles epidemic was the worst the world has seen in 30 years, manifesting in increased morbidity, mortality, hospitalizations, and public health expenditures. Public Health officials and legal scholars attribute the rise to the emergence of organized and well-funded anti-vax groups, who disseminate false, endangering, and reckless “propaganda” (what I call FEAR speech) with the objective of fostering vaccine resistance. We are on track for similar resistance should a CoVid vaccine become a reality. To date, quantitative demonstration of cause and effect data is wanting. This research fills that gap, the first such research to do so via a systematic methodology. Using a novel approach, I explore the role of anti-vax groups in five localities, comparing recent measles epidemics with earlier epidemics in the same localities, also establishing that pamphleteering and conferences/symposia have been the most effective dissemination means for targeting insular communities.

After evaluating several proposals to deal with the threat presented by these groups, including imposing tort liability and counter-speech, and concluding they are or will be ineffective, I propose a novel means of redress. After first determining that government speech would be be a viable approach, I advocate mandated educational curricula under this umbrella, targeted at the high school level and include a sample lesson plan outline.

October 9, 2020 in Scholarship | Permalink | Comments (0)

Tuesday, October 6, 2020

Sloss on Section 230 and the Duty to Prevent Mass Atrocities

David Sloss has posted to SSRN Section 230 and the Duty to Prevent Mass Atrocities.  The abstract provides:

Between August and November, 2017, the Myanmar military carried out a series of brutal attacks against Rohingya Muslim communities in Rakhine State in Myanmar. Myanmar’s military used Facebook as a tool for ethnic cleansing. In theory, Rohingya plaintiffs could bring a state tort law claim against Facebook alleging that Facebook was negligent (or worse) in permitting its social media platform to be utilized to spark mass violence against the Rohingya. Could Facebook be held liable in a civil suit for complicity in genocide, or for aiding and abetting the commission of a crime against humanity? Under current federal law, the answer is clearly “no.” Section 230 of Title 47 of the U.S. Code states: “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” Judicial decisions establish that Section 230 grants online service providers broad immunity for content posted by third parties. Thus, Section 230 provides Facebook a valid federal preemption defense to a state tort law claim.

This essay contends that Congress should create a statutory exception to Section 230 to permit civil suits against social media companies for complicity in genocide or crimes against humanity. The United States has a clear duty under international law to prevent genocide. One could also make a persuasive argument that the United States has a duty under customary international law to prevent crimes against humanity. The United States is not violating its international legal duty to prevent mass atrocities by granting immunity to internet companies. However, withdrawal of that immunity for content that contributes to commission of mass atrocity crimes would be a helpful step for the United States to implement its duty to prevent genocide and crimes against humanity.

October 6, 2020 in Scholarship, Web/Tech | Permalink | Comments (0)

Friday, October 2, 2020

Erichson, Goldberg & Zipursky on Case-Linked Jurisdiction and Busybody States

Howard Erichson, John Goldberg & Ben Zipursky have posted to SSRN Case-Linked Jurisdiction and Busybody States.  The abstract provides:

Beginning with Justice Ginsburg’s 2011 opinion in the Goodyear case – and echoed in Justice Thomas’s 2014 opinion in Walden v. Fiore and Justice Alito’s 2017 opinion in Bristol-Myers Squibb v. Superior Court – the Supreme Court has suggested that the distinctiveness of specific personal jurisdiction (in contrast to general jurisdiction) resides in its being “case-linked.” However, to date, the Justices have not spelled out what it takes for a defendant’s contacts with a forum to be case-linked, although they now have an opportunity to do so in a pair of personal injury cases brought against Ford Motor Company. This essay aims to provide the missing account of case-linkage, explaining along the way how it applies to the Court’s pending cases.

Our method is constructive and interpretive: we take as our starting point the Court’s precedents and its reasoning about two pillars of personal jurisdiction: state sovereignty and defendant’s due process rights. After Part I’s introduction, Part II re-examines the Court’s personal jurisdiction decisions from International Shoe to the present with the goal of understanding the concept of case-linkage as it has played out in the cases. Part III describes the Ford litigations presently before the Court, explaining why they invite consideration of an aspect of specific jurisdiction that the Court has yet to address adequately.

We put forward our theory of case-linked jurisdiction in Part IV. Case-linkage, we argue, can only be understood within a framework that isolates the key concepts that matter for due process. Two are crucial:

(1) a concept of the scope of the defendant’s submission to state authority, and

(2) a concept of the scope of the forum state’s legitimate interests.

We explain the latter in terms of the principle that a state’s courts ought not meddle in affairs beyond the state’s legitimate reach (labeled “the Anti-Busybody Principle”). By explaining case-linkage both in terms of the scope of a defendant’s submission to state power and of a state’s legitimate interests, we offer a way to bring together the process and sovereignty concerns that underlie the law of personal jurisdiction.

With our own affirmative account in place, Part V shows why the “causation” approach to case-linkage advocated Ford and by some lower courts are indefensible, even if the more expansive “relatedness” tests of other courts are also not up to the task at hand. We also show that the intuitively right answer to the Ford cases — that a state court has jurisdiction to hear tort claims brought by state residents injured in-state by the defendant’s product (when the defendant has extensively sold the product-line in that state) — not only meshes with all relevant Supreme Court precedents, but also points to the best path forward for understanding, defining, and demarcating case-linked jurisdiction.

October 2, 2020 in Scholarship | Permalink | Comments (0)

Sunday, September 27, 2020

Czaczkes, Baker & Witt: Liability Insurance Coverage is a Reason to Reject COVID-19 Immunity

Yale undergraduate Josh Czaczkes, Tom Baker, & John Witt have just finished a really interesting research project.  Using a database run by Baker at Penn, the group determined that 80% of liability policies have coverage for losses for infection by virus.  Only 20 of 100 policies had an exclusion.  Thus, COVID-19 immunity would primarily benefit large insurers and not businesses, many of which are small.  The group uses the finding to oppose immunity legislation.  Their post is at Balkinization

Moreover, the early cases are being won by defendants.  See here and here.  I have spoken to several plaintiffs' lawyers over the last few weeks, and they all say the same thing about COVID-19 cases.  They are very wary of them, and would only take such a case under limited conditions.  Specifically, I have heard from more than one firm that the injury would have to be death before it would be worth considering.  I think immunity is unnecessary. 

September 27, 2020 in Current Affairs, Scholarship | Permalink | Comments (0)

Friday, September 25, 2020

Perry on COVID-19 Liability

Ronen Perry has posted to SSRN Who Should Be Liable for the COVID-19 Pandemic?.  The abstract provides:

The Article systematically and critically evaluates the potential liability of various “suspects” for the physical, emotional, and economic losses arising from the COVID-19 pandemic: the country-of-origin (the People’s Republic of China), international organizations (particularly the World Health Organization), federal, state, and local governments and officers, businesses, and healthcare providers. It concludes that existing legal frameworks fail to provide an appropriate solution for victims, primarily because each of the potential defendants can easily evade liability. The Article then proposes a new hybrid (international-domestic) regime, inspired by the international framework for the compensation of victims of nuclear incidents and by the September 11th Victim Compensation Fund.

September 25, 2020 in Scholarship | Permalink | Comments (0)

Tuesday, September 22, 2020

Russell on Frivolous Defenses

Thomas Russell has posted to SSRN Frivolous Defenses.  The abstract provides:

This article is about civil procedure, torts, insurance, litigation, and professional ethics. This is an empirical piece with data drawn from a sample of 355 answers to 298 complaints in car crash lawsuits to identify various ways that insurance defense lawyers evade the rules of civil procedure and, frankly, act unprofessionally.

The empirical center of this piece examines 355 answers in car crash personal injury cases in Colorado’s district courts. First, I situate these cases within dispute pyramid elements including the total number of miles-traveled within Colorado and also with respect to the volume of civil litigation.

The piece engages several articles that Stanford Law Professor Nora Freeman Engstrom has written about the plaintiffs’ bar. This article is the opening article in a multiple-piece conversation with her. I show how insurance defense mill lawyers ignore the rules of civil procedure and the Code of Professional Conduct.

Next, I examine the answers of what I term insurance defense mill attorneys. Using my sample of 355 answers and 298 complaints, I examine the defense attorney’s departure from the Colorado Rules of Civil Procedure especially Rule 8. In particular, I count and analyze lawyers use of the claims that they need not answer because an averment:

1) calls for a legal conclusion;

2) is directed at a co-defendant; or

3) that a statute or document "speaks for itself."

I generally discuss the failure to investigate claims before answering, which violates Rule 11 and the Code of Professional Conduct.

Third, the title derives from the last empirical section, which examines the pleading of lists of so-called “affirmative defenses.” I show that on average, each defense attorney includes nine items within a list of defenses. Few are true affirmative defenses. For 90 percent of the lists of defenses, there is no factual support whatsoever.

The piece has some humor, too.

September 22, 2020 in Scholarship | Permalink | Comments (2)

Monday, September 21, 2020

Yale Law Journal Submission Deadline is Wednesday

The Yale Law Journal has announced that the submission deadline for articles and essays is this Wednesday, September.

September 21, 2020 in Scholarship | Permalink | Comments (0)

Wednesday, September 16, 2020

Berman on Tobacco Litigation and E-Cigarettes

Micah Berman has posted to SSRN Tobacco Litigation, E-Cigarettes, and the Cigarette Endgame.  The abstract provides:

Among his many contributions to the field of public health law, Professor Richard Daynard is perhaps best known for (a) advancing the idea that affirmative litigation, particularly against the tobacco industry, can serve as an effective public health tool, (b) introducing the discussion of an “endgame,” in which the commercial sale of cigarettes—the most deadly form of tobacco use—is phased out. This article unites these two topics and analyzes the potential for affirmative litigation to hasten the end of commercial cigarette sales.

In recent years, the major tobacco companies have suggested that they support moving towards a “smoke-free world,” with non-combustible nicotine products such as e-cigarettes gradually replacing more harmful cigarette smoking. Though this rhetoric is deeply cynical—these same companies continue to spend heavily to promote their cigarette brands—it may nonetheless create a window of opportunity for litigants. Past litigation against tobacco companies has foundered on the absence of a “reasonable alternative design” for cigarettes. Today, the tobacco companies’ own statements can be used to show the availability of such alternatives. More importantly, now-public documents from the tobacco industry’s archives help establish the case for treating e-cigarettes as a “reasonable alternative design” for cigarettes. These documents show that the major tobacco companies developed the essential components of e-cigarette technology decades ago, but they chose not to commercialize these products because they feared they would prove to be viable alternatives to cigarettes.

This article reviews how the introduction of e-cigarettes may reinvigorate products liability litigation against the manufacturers of conventional cigarettes. Building on the work of Professor Daynard, it also considers how these lawsuits, even if ultimately unsuccessful in court, might nonetheless benefit public health by pressuring the tobacco industry to live up to its public statements and by catalyzing legislative efforts to phase out the sale of cigarettes.

September 16, 2020 in Scholarship | Permalink | Comments (0)

Friday, September 11, 2020

Borghetti, Fairgrieve & Rott on a Comparative Review of Vaccine Remedies

Jean-Sébastien Borghetti, Duncan Fairgrieve & Peter Rott have posted to SSRN Remedies for Damage Caused by Vaccines:  A Comparative Study of Four European Legal Systems.  The abstract provides:

Compensation for damage caused to patients by vaccination is an increasingly prominent issue given the important public health consideration of ensuring the highest possible take-up of vaccination. This study explores the approach to vaccine damage cases in four different European countries (France, Germany, Italy and the UK), examining the variety of different mechanisms for providing redress, including specific compensation funds, social security systems, the operation of orthodox regimes of tort law and product liability, as well as in certain jurisdictions bespoke legislation for healthcare products or pharmaceuticals. The authors then go on to examine the recent case law on this topic at a Member State and European level, focusing particularly on issues relating to the notion of defect and that of causation in vaccine damage cases.

September 11, 2020 in Scholarship | Permalink | Comments (0)

Tuesday, September 8, 2020

Feinman on the Restatement of the Law, Liability Insurance

Jay Feinman has posted to SSRN A User's Guide to the Restatement of the Law, Liability Insurance.  The abstract provides:

At its 2018 Annual Meeting, The American Law Institute completed nearly a decade’s worth of work on the Restatement of the Law, Liability Insurance. The Restatement’s approval was deferred for a year from the 2017 Annual Meeting, largely because of opposition from insurance industry interests. The Restatement attracted unusual attention from interests outside the normal ALI process, in a way that can be fairly characterized as political, in the non-pejorative sense that it involves the authoritative allocation of values.

Lawyers and judges routinely look to the ALI’s Restatements of the Law as reference works for the state of the law and for arguments and analysis about the direction the law should go. Yet the controversy reflected in the complex intellectual and political history of the RLLI is likely to continue following its final adoption, and the issues raised by the controversy about the RLLI frames its use by lawyers and judges in interesting ways. This article takes account of the issues raised in the drafting process to inform the use of the Restatement going forward. The criticisms of particular sections of the RLLI will be discussed as those sections are raised, argued, and applied in litigation.

But the criticism suggests that two general points need to be taken into account in using the RLLI:
• What is a Restatement?
• Whose Restatement is this?

September 8, 2020 in Scholarship | Permalink | Comments (0)

Friday, September 4, 2020

Vines & Akkermans on the Unexpected Consequences of Compensation Law

Prue Vines and Arno Akkermans have published The Unexpected Consequences of Compensation Law with Hart Publishing.  From the blurb:

This book explores the performance of compensation law in addressing the needs of the injured. Compensation procedure can be dangerous to your health and may fail to compensate without aggravation/creating other problems. This book takes a refreshing and insightful approach to the law of compensation considering, from an interdisciplinary perspective, the actual effect of compensation law on people seeking compensation. Tort law, workers’ compensation, medical law, industrial injury law and other schemes are examined and unintended consequences for injured people are considered. These include ongoing physical and mental illness, failure to rehabilitate, the impact on social security entitlements, medical care as well as the impact on those who serve – the lawyers, administrators, medical practitioners etc.  All are explored in this timely and fascinating book. The contributors include lawyers, psychologists, and medical practitioners from multiple jurisdictions including Australia, the Netherlands, Canada, Italy and the UK.

Discount Price: £56

Order online at www.hartpublishing.co.uk – use the code UG6 at the checkout to get 20% off your order!

September 4, 2020 in Books, Scholarship | Permalink | Comments (0)

Thursday, September 3, 2020

Keating on Beuermann on Strict Liability

At JOTWELL Torts, Greg Keating reviews Christine Beuermann's Reconceptualising Strict Liability for the Tort of Another.

September 3, 2020 in Books, Scholarship, Weblogs | Permalink | Comments (0)

Monday, August 31, 2020

Long on IIED in the Workplace

Alex Long has posted to SSRN Retaliation, Humiliation, and Extreme and Outrageous Conduct:  IIED in the Workplace.  The abstract provides:

Citing the need to preserve managerial discretion, courts frequently espouse the need to adopt an “especially strict approach” in cases of intentional infliction of emotional distress (IIED) in the workplace. As a result, it is notoriously difficult for employees to prevail upon IIED claims against their employers. At the same time, a few courts have recognized that one form of employer conduct may merit special treatment when assessing an IIED claim against an employer. According to some courts, the fact that an employer has engaged in retaliatory conduct may be “a critical and prominent” factor in assessing an employer’s behavior. This Article argues that other courts should also recognize retaliatory conduct as a weighty factor when considering whether such conduct meets the threshold of “extreme and outrageous” conduct for purposes of an IIED claim. Drawing upon social science research into the areas of humiliation and retaliation, this Article generally agrees with courts that have concluded that workplace retaliation often has a greater detrimental impact upon the victim than other forms of non-actionable employer conduct and, therefore, should be given special weight in the analysis of the extreme and outrageous nature of employer conduct.

August 31, 2020 in Scholarship | Permalink | Comments (0)

Wednesday, August 26, 2020

French on Forum Shopping in COVID-19 Business Interruption Claims

Christopher French has posted to SSRN Forum Shopping COVID-19 Business Interruption Insurance Claims.  The abstract provides:

Insurance disputes are typically governed by state law, and state insurance laws vary considerably, with some states being favorable to policyholders and others being unfavorable. With forum shopping, a plaintiff often has many choices regarding where it can bring a lawsuit, including multiple states in which to bring the case and whether to bring the case in federal or state court. Of the over 900 COVID-19 business interruption insurance lawsuits filed thus far, more than 600 of them have been filed in federal court, with more than 100 filed as class actions. Many of them were also filed in states with insurance laws that are not favorable to policyholders.

Conventional wisdom provides that a plaintiff’s chances of winning are generally much higher in state court than in federal court and that historically federal class actions against insurers have been successful only approximately twenty-five percent of the time. So, why were so many of the COVID-19 business interruption insurance cases filed in federal court in unfavorable states and as class actions when the historical chances of winning are so low in such forums, particularly as class actions?

This Essay provides some possible answers to that question. In doing so, it explores forum shopping considerations in general, the conventional wisdom regarding litigating in federal versus state court, and the empirical data regarding the odds of winning in state versus federal court.

August 26, 2020 in Current Affairs, Scholarship | Permalink | Comments (0)

Tuesday, August 25, 2020

Zettler, Berman & Parasidis on Drug and Vaccine Development and Access

Patricia Zettler, Micah Berman & Efthimios Parasidis have posted to SSRN Drug and Vaccine Development and Access.  The abstract provides:

This Chapter explains how drugs and vaccines for COVID-19 can reach the market in the United States. As is always true, drug and vaccine manufacturers may seek U.S. Food and Drug Administration (FDA) approval of their products via traditional approval mechanisms and drug manufacturers may offer pre-approval access under the expanded access or right to try pathways. In a public health emergency like COVID-19, an additional mechanism is also available: the Emergency Use Authorization (EUA) pathway. This Chapter (1) assesses how FDA has used its EUA authorities for COVID-19 drugs thus far, (2) considers how FDA has balanced the need for robust evidence of safety and effectiveness for COVID-19 pharmaceuticals against the urgent need to speed patients’ access amid the clinical and political realities of the pandemic, and (3) highlights considerations specific to vaccines should FDA be faced with a request to issue an EUA for a COVID-19 vaccine. The Chapter concludes with recommendations for policymakers and regulators at the federal and state levels. The recommendations aim to improve public understanding of the regulatory process for COVID-19 drugs and vaccines, protect scientific decision making from undue political pressure, and ensure that manufacturers develop robust evidence of safety and effectiveness—and ultimately safe and effective COVID-19 countermeasures.

This paper was prepared as part of Assessing Legal Responses to COVID-19, a comprehensive report published by Public Health Law Watch in partnership with the de Beaumont Foundation and the American Public Health Association.

August 25, 2020 in Current Affairs, Scholarship | Permalink | Comments (0)

Friday, August 21, 2020

Burch & Williams on Judicial Adjuncts in MDLs

Elizabeth Chamblee Burch & Margaret Williams have posted to SSRN Judicial Adjuncts in Multidistrict Litigation.   The abstract provides:

Peeking under the tent of our nation’s largest and often most impactful cases — like opioids and pelvic mesh — reveals that judges often act like ringmasters: they delegate their authority to a wide array of magistrate judges, special masters, and settlement administrators. Some see this as a plus. In 2019, the American Bar Association joined a chorus of proponents urging courts to outsource even more or risk undermining Rule 1’s goal of achieving a “just, speedy, and inexpensive determination.” Critics, however, contend that delegating judicial power, especially to private citizens, removes adjudication from public scrutiny, injects thorny ethical questions about ex parte communications, and risks cronyism and high costs.

We wade into the controversy to offer both quantitative and qualitative evidence. By constructing an original dataset of 92 multidistrict products-liability proceedings centralized over 14 years, we introduce the first taxonomy of the diverse array of adjuncts working within them. Testing their effects with a multivariate analysis, we found that proceedings with special masters lasted 66% longer than those without, and appointing any kind of adjunct meant that the proceeding was 47% less likely to end. Not only did justice take longer, it cost more: 74% of the adjuncts were not magistrate judges, meaning that the parties paid them. And plaintiffs alone bore all costs in 54% of those appointments.

Digging deeper, we then interviewed some of the lawyers, judges, and adjuncts who participated in these proceedings. Attorneys’ experiences moved scholars’ longstanding concerns from law-review pages to real life: rather than improving justice, some adjuncts cajole parties through off-the-record discussions; repeat players on all sides thrive through symbiotic sponsorship; and plaintiffs are left playing the lawyer lottery, for their outcomes may depend more on whether they picked an attorney with the inside track than their suit’s merits. Collectively, our findings support existing reservations about allocating judicial power to those in the private sector.

August 21, 2020 in Scholarship | Permalink | Comments (0)

Thursday, August 20, 2020

Avraham, Baker & Sebok on the Anatomy of Consumer Legal Funding

Ronen Avraham, Lynn Baker & Tony Sebok have posted to SSRN The Anatomy of Consumer Legal Funding.  The abstract provides:

Litigant Third-Party Funding (LTPF), where financial companies advance money on a non-recourse basis to individual plaintiffs, is a growing and increasingly controversial industry in the U.S. This funding made headlines during the NFL concussion litigation with more than 1,000 players reported to have received such advances and with class counsel raising concerns of “predatory lending” with the Court. Policymakers and scholars echo these concerns as they call for regulation of the industry to protect vulnerable consumers. Any regulations, however, should be based on systematic data rather than good intentions or isolated anecdotes. But to date there has been almost no empirical research on the actual practices of the industry. This Article begins to fill that void.

Using a unique data set from one of the largest consumer litigation financing firms in the U.S. (“Funder”), we are the first to explore the anatomy of pre-settlement litigant finance in mass tort cases, such as the NFL class action. We are also the first to examine general post-settlement litigant finance in the U.S., which is the type of funding many NFL players were reported to have obtained. Our comprehensive data set includes approximately 225,593 requests for funding from 2001 throughout 2016.

With respect to pre-settlement funding, we find that the Funder makes an annual median gross profit of 55% from Mass Tort claims (compared with 60% from Motor Vehicle claims, our control group). We also find that the Funder includes complicated terms in their contracts that make it extremely difficult for clients to understand the actual interest rate they will be eventually be charged. We believe lawmakers should regulate these contracts, banning any unnecessarily complicated provisions and requiring that the effective annual interest rate and total amount due be straightforwardly disclosed.

With respect to post-settlement funding, we find that the effective annual interest rate charged and the profit to the Funder are even greater than for post-settlement fundings – 68% compared to 60% for Motor Vehicle claims. This is striking given that post-settlement fundings present virtually no risk to the Funder. Indeed we find that the rate of default in post-settlement cases is close to zero, which means that this category of advance is “non-recourse” on paper but not on the ground. We therefore recommend that funding in post-settlement cases should be subject to consumer protections similar to those usury laws provide for ordinary loans.

August 20, 2020 in Scholarship | Permalink | Comments (0)