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The number of attorneys supporting civil jury trials should significantly expand because of an unexpected player — litigation financing companies. Litigation funders have created more opportunities for more attorneys to generate business litigating cases in front of a jury or through settlement with a jury’s potential valuation in mind. Additionally, Burford Capital and other competing funders eliminated former barriers for large institutional clients to pursue litigation utilizing their ‘big law’ counsel. Young attorneys and law students recognize these opportunities, and it is fostering a new wave of advocacy for civil jury trials.
As an incoming law student, few headlines pique my interest more than reading about high-stakes settlements or “nuclear verdicts,” a jury awarding an unfathomable sum of damages to a plaintiff and trial team. After presumably years of intense preparation, the final negotiations or trying a case in front of a jury positively changes the clients’ lives. The all-in team environment required to prepare for high-impact litigation exhilarates me thinking about my future career pursuits, and so advocating for the protection of civil jury trials naturally follows.
Many of us Civil Jury Project supporters choose to advocate for a similar reason: our careers positively intersect with jury trials as an institution. Even back to the project’s founding, this same spirit is clear. Steve Susman, the Civil Jury Project’s generous founder, rose to prominence as a contingency-fee trial litigator. He pioneered the use of success-based fee structures beyond personal injury cases and was tremendously successful. After winning multiple “nuclear verdicts” on a contingency-fee agreement, Steve invested significant resources and time into protecting civil jury trials.
Steve Susman’s trial firm continues to model his innovative vision, creating an incentive to protect jury trials. Susman Godfrey’s current co-managing partner, Kalpana Srinivasan, spoke on a podcast, Khurram’s Quorum, about how, “there’s a lot of financial incentive for partners to be thoughtful and creative.” While discussing how other firms can learn from Susman’s successes, she advises that, “more firms should be putting skin in the game,” referencing taking on risk with the client through contingency-fee agreements, bonuses, hybrid-fee arrangements, and other creative ways of aligning the client’s interests with those of the firm.
Over the last couple decades, elite litigation or trial firms (e.g., Bartlit Beck, McKool Smith, Gibbs & Bruns, etc.) and elite plaintiff’s firms (e.g., Reid Collins, Edelson, Robbins Geller Rudman & Dowd, Dovel & Luner, Cohen Milstein, etc.) have followed suit, sharing risk with clients and amassing countless profitable verdicts and settlements.
In my eyes, pockets of these world-class civil litigators like Steve Susman were the primary, influential advocates for civil jury protection, aside from judges, partly due to the natural incentives.
Now, the tide is changing, favoring civil jury protection from a wider net of future advocates. And it stems from the growth of litigation financing companies including Burford Capital, the market’s largest player. Because of litigation funding, which always operates on some form of contingency-fee structure, there will be more cases available, more resources to support taking a case as far as necessary to extract its full value, and a wider range of firms involved.
At its simplest, litigation funding provides third-party capital to law firm clients to pay for attorneys’ fees in exchange for a percentage of the case’s potential winnings. From a plaintiff’s perspective, a case can be litigated all the way through trial without ever having to pay the high hourly fees associated with hiring a big law firm, even if the case loses. This means a plaintiff can extract the full value of a case rather than prematurely settling due to depleting funds or worrying about the risk of going to trial and being stuck with a crippling bill after an unfavorable result. From a law firm’s perspective, the traditional and often preferred hourly-fee structure can be maintained for some cases. Last, for litigation funders, cases can now be passively invested in as assets by assuming the risk of an unfavorable result after negotiations or a loss at trial.
While conversations surrounding litigation financing (e.g., controversies, concerns, potential regulation, impact on the caseload of the U.S. court system, etc.) create interesting debates, how will its existence translate to increased reliance on civil juries?
On a podcast episode of Original Jurisdiction with David Lat, Burford Capital CEO, Chris Bogart, explains that litigation financing has advanced beyond the simple model above, particularly for large institutional clients. Speaking about his experience as a Fortune 50 General Counsel at Time Warner, he explains that while acting as GC, he frequently had claims he could have pursued for the company. However, convincing his CFO to deploy capital towards litigation instead of operational expenses or creating new films was an uphill battle often lost.
With litigation financing, institutional clients can now pursue their claims as far as they wish without depriving the business from capital that could have been used elsewhere, eliminating the barrier Bogart faced. Additionally, companies can go a step further and put up the future value of their claims as collateral to receive cash now to fund operations.
Potential litigation claims for large corporations previously were a fairly risky process of taking cash away from the overall business and waiting months or years to see it again. Now, funders like Burford Capital present an opportunity for a company to receive cash now to fund the core business without having to deploy capital at all until recovery. This eliminates old barriers to pursuing potential claims and presents new avenues to fund the business.
Because of the new environment litigation financing has created, the valuation of a case by a reasonable civil jury will have a higher influence on litigating claims. Utilizing litigation funding, all parties are incentivized to extract the full value of their claims rather than deciding to settle early to quickly receive cash or avoiding pursuing claims altogether due to capital needing to support the core business.
Claims from institutional clients will now be pursued closer to finality. They will be decided by settlement or verdict according to the valuation of the court system, not the standard of how to settle within 3 or 6 months. Given a civil jury determines that valuation, ‘big law’ attorneys representing large corporations should now engage more with civil juries as an institution.
It sounds nice that more firms and clients will have to think about how civil juries may value a case, but will this environment supported by contingency deals really lead to increased advocacy? The answer should be yes. Law students are recognizing the incentives behind creative fee structures, and for some it has catalyzed an appreciation for civil jury trials.
Throughout top law schools including Chicago, Harvard, Michigan, NYU, Penn, Stanford, UT Austin, UVA, Yale, and more, students have created organizations dedicated to supporting plaintiff-side careers, which has led to increased support for civil juries. Take it from one of these students, not from me.
I recently spoke with Ben Keller, a rising 3L at UVA Law. After working on a historic civil rights death case before law school and as a 1L that went to trial, he founded the Plaintiffs' Law Association at the University of Virginia to help students learn about and connect with plaintiff-side firms, which largely operate on some type of success-based fee agreement.
I asked Ben how working on a historic jury trial at a contingency-based firm affected his opinion about civil jury trials, and his thoughts are below:
“Civil juries are the lifeblood of our justice system. When you get twelve completely impartial people, who presumably do not have a legal background, to hear a case, that is the best judge of a case in both the merits and damages. If you look at the Young case and talk to lawyers or judges, you’d get varying degrees of opinions about the merits and damages, but if you give the case to 12 impartial jurors, you can see how much the community values a case, which in this case was life and how people are treated in jail.”
Ben’s comments about civil jury trials embody the Civil Jury Project’s mission and exemplify the type of advocacy I hope litigation financing and creative fee structures spark. But this new wave of advocacy is not limited to just students entering plaintiff-side careers. If the trend of large corporations utilizing litigation financing to bring claims via their ‘big law’ representation, my prediction is that in the future, the industry will see a growth in ‘big law’ attorneys who increasingly share Ben’s support for civil jury trials.
Steve Susman found incredible rewards operating on a success-fee structure and consequently chose to support the protection of civil jury trials. Young plaintiff-side attorneys and law students recognize the opportunities that contingency-fee cases present, which in turn leads to budding civil jury advocates like Ben Keller. If litigation financing continues to grow and ‘big law’ firms generate more business by litigating institutional claims based increasingly on the valuations of a reasonable civil jury, should it not follow that we can expect a new wave of advocacy from the world’s most profitable firms in the near future?
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