Reevaluating Proposals for Tort Claims Markets in a World of Mass Tort Litigation

By Guerrero, Ryan | The Review of Litigation, Spring 2013 | Go to article overview

Reevaluating Proposals for Tort Claims Markets in a World of Mass Tort Litigation


Guerrero, Ryan, The Review of Litigation


I. Permitting the Sale of Tort Claims as an Alternative Form of Litigation Financing.............301

A. The History of Prohibitions Against the Sale of Tort Claims...................301

B. Evaluating Proposals to Establish Tort Claims Markets....................303

C. Common Arguments for the Sale of Tort Claims................305

1. Increased Victim Compensation.................305

2. Equalizing the Power Disparity Between Plaintiffs and Defendants...................307

3. Existing Forms of Claim Transfer...........................308

D. Common Arguments Against Tort Claims Markets.........................310

1. Tort Claims Markets Would Spur Frivolous Litigation............310 2. Tort Claims Markets Raise Legal Ethics Problems.311

3. Alienability of Tort Claims and Individual Justice..312

II. Reevaluating the Debate over Tort Claims Markets in Light of the Rise of Mass Tort Litigation............314

A. An Overview of Mass Torts..............314

B. Reevaluating the Debate over Selling Tort Claims in Light of Features of Mass Tort Litigation...............316

1. The Trend Towards Aggregation and Settlement in Mass Torts..................316

2. How a Market for Tort Claims Comports with Mass Tort Litigation..................317

a. Economies of Scale and Reducing Transaction Costs..............318

b. Reducing Organizational and Ethical Difficulties.................318

3. Individual Justice in Mass Tort Litigation...............320

4. Systemic Effects of Tort Claims Markets on Mass Tort Litigation................321

III. Conclusion.............322

Third-party financing of litigation has, in recent years, emerged as a heated area of debate. 1 Proposals to relax state champerty restrictions and legal ethics rules in order to allow investors to purchase and then pursue tort claims have not traditionally found receptive audiences for a variety of reasons.2 The concept of selling one's tort claim is discomforting; it conflicts with our traditional notion of a lawsuit.3 Furthermore, there are concerns that such reform would spur frivolous litigation, an objection often applied to third-party financing as a whole.

With the rise of mass tort litigation, however, proposals that would open up a market for tort claims deserve réévaluation. Mass tort litigation is different than the traditional single-party dispute, especially with regard to aggregation and settlement, and it implicates different public policy concerns.5 In this Note, I argue that permitting the sale of mass tort claims comports with the framework of mass tort litigation, and that such proposals deserve serious consideration as possible solutions to some of the problems posed by mass torts.

In Part I, I give an overview of the restrictions on the assignment of tort claims and examine both sides of the debate over whether these restrictions should be repealed to allow a market for tort claims to develop. In Part II, I describe the unique features of mass tort litigation and, in light of them, reevaluate the debate over tort claims markets. I conclude that, with the rise of a streamlined litigation model that emphasizes efficiency, aggregation, and settlement, at the expense of individualized litigation, the objections to the sale of tort claims lose traction. Moreover, creating a market for tort claims aligns with the concerns posed by mass tort litigation, and, therefore, such proposals warrant consideration as attempts to address the issues facing mass tort litigation.

I. Permitting the Sale of Tort Claims as an Alternative Form of Litigation Financing

A. The History of Prohibitions Against the Sale of Tort Claims

Modern prohibitions against the acquisition of part or all of a tort claim have their roots in the ancient English common law prohibitions of maintenance and champerty. Maintenance is an "officious intermeddling in a suit that no way belongs to one, by maintaining or assisting either party with money or otherwise, to prosecute or defend it. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • A full archive of books and articles related to this one
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Reevaluating Proposals for Tort Claims Markets in a World of Mass Tort Litigation
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

    Already a member? Log in now.