In recent years, Big Law has grown more comfortable with litigation finance, which is the practice of using investments from third parties to pay the cost of lawsuits. The practices listed among the most popular areas for litigation finance have been antitrust and international arbitration.
Martin Gusy, co-chair of Bracewell’s international arbitration practice, told Bloomberg Tax that the funding is useful in expensive, long-duration international arbitrations.
“It’s client driven,” Gusy explained. The customers sometimes lack the capital to pursue matters or in other cases simply want to avoid the high costs of arbitration, he said.
Larger firms’ recent comfort level has stemmed from a better understanding of the industry and a desire to take on more contingency cases without assuming the risk if the lawsuits are losers.
