We Aren’t Vultures, Says Litigation Funder

The narrative of litigation funders as villains got a boost when Florida attorney Jaeson Birnbaum, who worked a variation of the ponzi scheme based on litigation funding, recently pleaded guilty to a criminal count of securities fraud, and still faces a parallel civil lawsuit by the SEC. Birnbaum defrauded investors by pledging the same lawsuit returns to multiple investors as sureties, then stealing more than $3 million. Nevertheless, Martin Kenney, writing in FCPA Blog, says lawyers like him have a valuable and significant role to play when there is a significant fraud claim, and decries the fact that in some jurisdictions, lawyers and clients are excluded from working with litigation funders. He references companies dragged to the threshold of bankruptcy by crooks, but can’t afford to embark upon costly civil litigation intended to recover their losses. “We need to dispel the perception that litigation funders are some kind of ‘vultures,’ ” he says. “Without funders, these victims could potentially lose everything and have little or no access to justice.”