Maya Steinitz, Professor and Bouma Family Fellow in Law at the University of Iowa College of Law, authored the lead article in the latest issue of The Practice, a publication of Harvard Law School’s Center on the Legal Profession. Professor Steinitz is one of the nation’s leading experts on litigation finance and her article, “Follow the Money? A Proposed Approach for Disclosure of Litigation Finance Agreements,” leads off a series of articles on litigation finance in the issue.
From the article:
Both critics and proponents agree that the newly emergent phenomenon of litigation finance is likely the most important development in civil justice of our times. Litigation finance is the practice by which a nonparty funds a plaintiff’s litigation either for profit or for some other motivation. Last year, some estimates placed the size of the litigation finance market between $50 billion and $100 billion. This market in legal claims has attracted specialist firms, private equity, hedge funds, wealthy individuals, the public (through crowdfunding platforms), and sovereign wealth funds, among others who are looking for high-risk, high-reward investments or for a cause célèbre. The high-profile funding of Hulk Hogan’s lawsuit against Gawker has created a firestorm of public and regulatory interest. The funding of the concussion litigation, the #MeToo cases, and Stormy Daniels’s lawsuit—to name but a few more recent examples—have dominated headlines and conferences.
While these cases grab headlines, they also reflect a more fundamental shift. Litigation finance is transforming civil litigation at the case level as well as, incrementally, at the level of the civil justice system as a whole. It is beginning to transform the way law firms are doing business and will increasingly shape the careers of civil litigators at firms small and large. It is unsurprising, therefore, that litigation finance is of interest to legislatures and the courts. With so much at play and the stakes so high—at the state and federal level, in the judiciary, in the legislatures, and at bar associations—the question of the day is whether and how to regulate litigation finance. That debate focuses specifically on regulation around the disclosure of financing.
This article argues that the quest for a bright-line rule to regulate disclosure of litigation funding is fundamentally misguided because it fails to account for the near-infinite variability of funding scenarios that implicate widely different interests, pose different risks, and affect different constituencies in varying degrees. In other words, rules are a legal technology that simply cannot capture or address the nuance, versatility, and context specificity inherent in litigation finance. Instead of a bright-line rule, this article proposes that legislatures and courts shift to a standard-based approach and adopt a balancing test. Balancing tests, including the one offered herein, allow judges broad discretion to weigh competing factors and interests in a context-specific manner. It is therefore the appropriate approach to litigation funding, which is characterized by a high variability of funding schemes and implicates a long list of factors and interests.
Read the entire article here. An extended version of the article is forthcoming in the U.C. Davis Law Review. A draft version of the extended article is available here.
Other works by Professor Steinitz on litigation finance include:
- Maya Steinitz, “Incorporating Legal Claims,” 90 Notre Dame Law Review 1155 (2015).
- Maya Steinitz, “A Model Litigation Finance Contract,” with Abigail C. Field, 99 Iowa Law Review 711 (2014).
- Maya Steinitz, “How Much Is That Lawsuit in the Window? Pricing Legal Claims,” 66 Vanderbilt Law Review 1889 (2013).
- Maya Steinitz, “The Litigation Finance Contract,” 54 William & Mary Law Review 455 (2012).
- Maya Steinitz, “Whose Claim Is This Anyway? Third-Party Litigation Funding,” 95 Minnesota Law Review 1268 (2011).
Professor Steinitz has also testified before the New York Senate Standing Committee on Consumer Protection regarding litigation finance legislation. She recently appeared on NPR's Planet Money "Capitalism in the Courtroom" episode, discussing the history of litigation finance and the role money plays in civil litigation.
In addition to her work on litigation finance, Professor Steinitz’s research focuses on a wide range of topics including the intersection of civil litigation and corporate law, public and business international law, transnational dispute resolution, and the global legal profession. She recently published a book with Cambridge University Press, The Case for an International Court of Civil Justice.
A complete list of Professor Steinitz’s publications is available on her faculty bibliography page. Many of her articles are available on SSRN.