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Kai Ryssdal: There’s some bad news and there’s some good news for Chevron today. The bad news you may have heard already: The company’s on the hook for $9 billion in Ecuador. A judge there ruled that Texaco, since bought up by Chevron, didn’t do near enough to clean up some chemical sludge it dumped into the Amazon basin 40 years ago.
The good news is that lawyers for the plaintiffs — the Ecuadoran winners — said they won’t try to collect until Chevron’s run through all its appeals. That, of course, could take years. Which raises the question of billable hours, and how little guy plaintiffs can afford to keep up this long, legal fight. How about with a little help from a big hedge fund?
From the Marketplace Sustainability Desk, Scott Tong reports.
Scott Tong: “Need a loan? We’re here to help.” That’s the pitch British fund Burford Capital made to the plaintiffs fighting Chevron.
Law professor Robert Percival at the University of Maryland says the funders looked at the case, and placed a bet.
Robert Percival: Investors were willing to step in and help fund the litigation, because they anticipated that it would produce results.
Fidelity and Invesco are among the institutional investors with money on the line against Chevron. No word on how much. But it deepened the pockets of the plaintiffs in a case now going on 18 years.
Percival: Even if you are poor, you have a better chance of being able to litigate it, no matter how much the defendant has.
Lawsuit lending emerged in the last decade in the U.S. There are high-brow, Wall Street financiers. And guys who advertise on late-night cable, like 1-800-Lawcash.
TV commercial: The real reason that you should be using Lawcash is our people.
Critics see these outfits as modified loan sharks. They back cases. And if they win, demand a big cut.
Anna Pertoldi: Twenty to 50 percent wouldn’t be an unusual amount.
Attorney Anna Pertoldi at the firm Herbert Smith says her door gets knocked on a lot, by aspiring fund managers.
Pertoldi: Basically looking for cases with very good prospects of success.
Still, without these funders, some litigants would have to fold up on account of no more dough. By all accounts, lawsuit finance is a growing field — the fundamentals of the suing industry appear solid.
In Washington, I’m Scott Tong for Marketplace.