Hedge funds investing heavily on funding lawsuits

Hedge funds and others speculating on litigation are making greater levels of investments each year. Burford Capital supported a class action oil pollution lawsuit against Chevron in Ecuador, but also finances litigation initiated by major corporations.

Australian- based litigation funder Bentham IMF reported funding 10 deals in 2014, including contract disputes, a patent- infringement trial, partnership disputes, and five law firm case portfolios. Bentham says that for the year it had gross returns of $31 million in the U.S., with net profit of $17 million.

Burford invested $4 million in a lengthy pollution suit in 2010. Ecuadorians won a judgment of $19 billion. Ecuador’s top court later halved the amount to $9.5 billion and upheld Chevron’s liability.

Jeffrey Newman represents whistleblowers.