Litigation and ROI

I probably should not be, but am nevertheless impressed that the ingenuity of people looking to make money knows no limits, even the courtroom. From the New York Times:

“It’s always a good time to invest in litigation,” Mr. Fields said, though he added that the weak economy helped. “When the recession started to bite, the phones started ringing off the hook. Last year, we looked at 122 cases and we made 17 investments.” A small but growing number of investors are exploring this idea, helping companies avoid some of the risks and costs of litigation in exchange for part of any money paid out when the case is settled or resolved by a court.

And in true free-market fashion, there seems to be some unintended positive benefits to investor self-interest, at least for those on the winning side:

The larger question, though, is whether the mere existence of outside investors makes possible lawsuits that might not be pursued otherwise.

If the claims are valid, then they may benefit from being litigated more effectively because the lawyers have more resources. “Having funding available for cases that are good cases, cases that from a God’s-eye point of view, so to speak, should’ve been brought, is a good thing,” Mr. Sebok said.