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More about litigation investment and financing

An article in Fortune, May 11, 2009 at 20, adds some details to what I wrote about previously on funding of litigation by third parties (See my post of April 11, 2009: litigation financing; Jan. 6, 2009: law suit financing offshore; March 20, 2009: a firm in hedge-fund financed litigation; and March 27, 2009: hedge funds and the secondary market for patents.).

Juridica was launched in December 2007 by two lawyers, Richard Fields and Timothy Scramtom. It has raised money by selling shares on the London Stock Exchange’s small-companies market. According to the Fortune article, “insurance companies like Allianz in Germany and several independent investors have launched funds to invest in suits.” Credit Suisse likewise has a litigation finance unit. The business model of these groups doesn’t sound complicated: “Like Juridica, these funds invest amounts typically between $1 million and $5 million in cases where companies sue each other for anticompetitive behavior, contract breaches, and so on.”

Other people also invest in lawsuits, most notoriously so-called patent trolls (See my post of Jan. 20, 2006: trolls and litigation costs; Oct. 29, 2006: Qualcomm’s business model; May 13, 2007: Microsoft’s litigation against trolls; and June 25, 2008: advice against troll litigation.).