Litigation Funding and the Problem of Agency Cost

[Samuel Issacharoff]

Litigation Funding and the Problem of Agency Cost in Representative Actions

Samuel Issacharoff

New York University School of Law

July 11, 2013

DePaul Law Review, Forthcoming
NYU School of Law, Public Law Research Paper No. 13-41
NYU Law and Economics Research Paper No. 13-25

papers.ssrn.com/sol3/papers.cfm?abstract_id=2292625

Abstract:
Alternative sources of litigation funding are complicating the already difficult world of complex litigation. While still in its infancy in the United States, the role of equity financing of contingent litigation is now well rooted in Australia, and establishing itself in Canada and the United Kingdom as well. This Article examines the market gaps filled by litigation funders in Australia and then the potential role to be played in the United States. In particular, the Article looks to litigation funding as a way to potentially protect absent class members in class actions and other representative proceedings.