Measuring the Value of Litigation Finance

<p><span>Litigation finance has become a focal point of contemporary debates about civil justice yet those debates remain largely theoretical and rest on untested empirical assumptions. This Article seeks to test these assumptions by fielding the first rigorous, large-scale empirical examination of how litigation finance shapes public perceptions of the civil justice system. Drawing on experimental survey data from over 2,500 U.S. citizens and over 7,000 data points, it employs a novel mock-jury design that situates respondents within realistic adjudicative contexts to assess how the presence and disclosure of litigation finance affect judgments about specific case outcomes and the civil justice system at large.</span></p> <p><span>The results complicate prevailing narratives. Disclosure of litigation finance biases decision-making by increasing the likelihood that respondents favor funded plaintiffs, suggesting that funding operates as a heuristic signal of claim quality. Yet this effect does not extend to damages which remain largely unaffected. These findings challenge both critics and proponents of disclosures who argue one the one hand that litigation finance distorts adjudication and who assume it will have no biasing effect on the other.</span></p> <p><span>More importantly the results show that litigation finance improves perceptions of the legitimacy of the civil justice system. Across multiple measures, respondents exposed to litigation finance report greater trust in judicial outcomes and stronger beliefs that the system operates fairly and credibly. These effects are particularly pronounced when plaintiffs lose: when a losing plaintiff is backed by litigation finance, respondents are significantly more likely to view that outcome as just.</span></p> <p><span>These findings are best understood through the lens of procedural justice. Litigation finance thus operates as a form of assurance, signaling that litigants had a meaningful opportunity to pursue their claims and thereby bolstering confidence in adverse outcomes. In doing so, this Article reframes how litigation finance’s value should be measured—moving beyond simply the objective outcomes towards the perceptions that sustain the civil justice system.</span></p>