The Malpractice and Divorce Bubble

[marmar]

from HuffPost:



Binyamin Appelbaum is a reporter with The New York Times; Ben Hallman is a reporter for the Center. This article is a collaboration between the Center for Public Integrity and The Times.

The loans are propelling large and prominent cases. Lenders including Counsel Financial, a Buffalo company financed by Citigroup, provided $35 million for the lawsuits brought by ground zero workers that were settled tentatively in June for $712.5 million. The lenders earned about $11 million.

Most investments are in the smaller cases that fill court dockets. Ardec Funding, a New York lender backed by a hedge fund, lent $45,000 in June to a Manhattan lawyer hired by the parents of a baby brain-damaged at birth. The lawyer hired two doctors, a physical therapist and an economist to testify at a July trial. The jury awarded the baby $510,000. Ardec is collecting interest at an annual rate of 24 percent, or $900 a month, until the award is paid.

Total investments in lawsuits at any given time now exceed $1 billion, several industry participants estimated. Although no figures are available on lawsuits supported by lenders, public records from one state, New York, show that over the last decade, more than 250 law firms borrowed on pending cases, often repeatedly. .........(more)

The complete piece is at: http://www.huffingtonpost.com/2010/11/15/investors-funding-medical-malpractice-divorce-lawsuits-_n_783477.html