Imagine three plaintiffs. The first incurred serious back injuries as a passenger in an automobile collision.' The second suffered permanent head injuries as a day laborer in a construction accident. The third experienced a debilitating asthma attack, caused by exposure to floor-cleaning chemicals at her workplace. You now have the chance to advance money to the plaintiff that you believe has the lawsuit with the highest expected value. If the selected plaintiff settles or wins at trial, then you receive the money you gave the plaintiff plus interest that approaches 200% a year. Here is the catch: if the plaintiff neither settles nor wins at trial, then you get nothing. Ready to place your bet? Traditionally, a variety of sources-plaintiffs, defendants, the parties' attorneys, and defendants' insurers-have financed litigation. "Alternative litigation finance" ("ALF") refers to financing from other sources. In the past decade, ALF has garnered significant attention from news reporters, practicing attorneys, legal scholars, policymakers, and state bar ethics committees. The rising ALF industry currently consists of three segments: (1) financiers that provide funding directly to individual plaintiffs in noncommercial litigation, a practice known as "consumer litigation funding" ("CLF"), (2) financiers that provide funding to plaintiffs' law firms, and (3) financiers that provide funding to the corporate plaintiffs in commercial litigation. This Note focuses on the CLF segment of the ALF industry.
Heuristics, Biases, and Consumer Litigation Funding at the Bargaining Table,
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