Friday, December 28, 2007

Word of the day: champerty...

One thing we know how to do here in the US of A is litigation. Populated with lawyers over (over 4 times as many as industrial farmers) these hard-working citizens need stuff to do, but the economics of long delays in the courts often cause litigants to do the wrong thing and settle.

Meanwhile, venture capitalists need places to invest billions and earn juicy returns now that the CDO market seems to have vaporized. Enter good ol' American/English entrepreneurship.
Profiting from other people's lawsuits, a practice known as champerty, is illegal in some jurisdictions and risks accusations of ambulance-chasing, but Juridica is concentrating on backing business plaintiffs, where the practice is better established and more accepted.

Some well-known investors, including Invesco Perpetual and Jupiter, are backing the company and Cenkos is the nominated adviser.

Pursuing legal claims can be frighteningly expensive. Plaintiffs have to commit management time and cash years into the future with no certainty of success. Getting an outside investor to share some of the financial pain can be very attractive. So can tapping their litigation experience. While most large companies are well resourced with in-house lawyers, few have litigation experience. [More]
While this could be just a curious legal footnote, it could also seep into lawsuits farmers have more investment in - such as environmental litigation against large targets like agribusinesses or government. Or anti-development suits. Cost has always been significant deterrent to plaintiffs as cases drag on regardless of outcome probabilities.

[via h&r; MR]

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