Lawsuit Abuse Impact

Testimony by Gregory G. Garre on 'Evaluating the Supreme Court's Decisions in Twombly and Iqbal' before the Senate Judiciary Committee

Selling Lawsuits, Buying Trouble: The Emerging World of Third-Party Litigation Financing in the United States

This paper begins with an overview of third-party litigation financing. It next examines current third-party financing practices in the United States. It then sets forth a critique of the practice, particularly the incentives it creates to engage in frivolous and abusive litigation. In this section, the paper also presents a case study on the Commonwealth of Australia, the first jurisdiction to permit third-party litigation funding, where such funding has dramatically increased litigation and given investors pervasive — even total — control over a plaintiff’s litigation. Finally, the paper proposes that third-party litigation financing be prohibited in the United States to prevent these abuses. At the very least, the paper concludes, such funding should be banned in class actions and other forms of aggregate litigation. LEARN MORE »

Testimony by Marcia G. Madsen on H.R. 1788, the 'False Claims Act Correction Act of 2009' submitted to the House Judiciary Committee

Reforming Corporate Criminal Liability to Promote Responsible Corporate Behavior

This paper discusses the origins of our flawed system of corporate criminal liability, the growing consensus on the need for change, and the leading alternatives to our current system. This paper recommends the following:

A greater recognition of the harmful and counter-productive consequences of our current system of strict vicarious corporate criminal liability; A broader understanding of the flawed origins of the current theory of corporate criminal liability; The adoption by Congress and the courts of a liability system that imposes corporate criminal liability only when the corporation has failed to carry out a reasonable compliance program; and The pursuit of court actions seeking to require a system of corporate liability that promotes the goals of the criminal law, such as deterrence, while opposing the expansion of a system that is justified by neither Supreme Court precedent nor legislative enactment.