The business ethics of litigation finance
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Suneal Bedi
Abstract
Most of the scholarship that seeks to elucidate the ethical implications of litigation finance focuses on legal ethics. That is, most research has focused on how lawyers, judges, and litigants are influenced by the presence of litigation finance. This Article seeks to elucidate the business ethics implications of litigation finance. It argues that litigation finance can be seen as a mechanism to promote business ethics, making companies behave more in line with both legal and ethical norms. It does this because it creates a large incentive for companies to follow private and regulatory laws. As the probability of being sued and facing damages increases, companies rationally seek to invest in actions that are going to decrease the likelihood of litigation occurring. To do this, companies must invest in legal compliance and other workplace programs to decrease the potential of a lawsuit that ultimately have the effect of aligning a company’s behavior with ethical norms prescribed by business ethicists and management scholars. As an upshot, this Article seeks to bring litigation finance into business scholarship with the hope that nonlegal scholars will also begin to engage with this market phenomenon. Ultimately, it provides a novel reason why litigation finance should be encouraged and promoted by regulators, businesses, and the marketplace at large.
© 2025 by Theoretical Inquiries in Law
Articles in the same Issue
- Frontmatter
- Third-Party Litigation Funding: Past, Present, and Future
- Introduction
- Agency costs in third-party litigation finance reconsidered
- What litigation funders can learn about settlement rights from the law of liability insurance
- Third-Party litigation funding: Panacea or more problems?
- Controlling the delegation of control
- Asking the right questions about legal finance in united states aggregate dispute resolution
- The WHAC-A-Mole game: An empirical analysis of the regulation of litigant third-party financing
- Consumer litigant finance and legal ethics: Empirical observations from texas
- Through a glass darkly: TPLF viewed through a procedural lens
- Third-Party litigation funding in the european union: Regulatory challenges
- Imagining how U.S. federalism would affect third-party funding regulation
- Winner pays: An alternative method of public funding
- The business ethics of litigation finance
- Concealed third-party litigation funding
Articles in the same Issue
- Frontmatter
- Third-Party Litigation Funding: Past, Present, and Future
- Introduction
- Agency costs in third-party litigation finance reconsidered
- What litigation funders can learn about settlement rights from the law of liability insurance
- Third-Party litigation funding: Panacea or more problems?
- Controlling the delegation of control
- Asking the right questions about legal finance in united states aggregate dispute resolution
- The WHAC-A-Mole game: An empirical analysis of the regulation of litigant third-party financing
- Consumer litigant finance and legal ethics: Empirical observations from texas
- Through a glass darkly: TPLF viewed through a procedural lens
- Third-Party litigation funding in the european union: Regulatory challenges
- Imagining how U.S. federalism would affect third-party funding regulation
- Winner pays: An alternative method of public funding
- The business ethics of litigation finance
- Concealed third-party litigation funding
