Over the years, much has been written about the emergence of whistleblowers as a force in bringing to light and redressing public and private wrongdoing, both through resort to the courts and administrative tribunals and processes of various stripes, as well as through the various avenues afforded by conventional and social media. Indeed, a number of commentators from different realms have described ours as the ‘Age of the Whistleblower.’ Perhaps so.
At the same time, much has been written about the growing phenomena of alternative or third party litigation finance ( often referred to as “ALF” for short), the practice of providing litigants with funds in exchange for an investment interest in litigation claims (often portrayed as nonrecourse loans the repayment of which is strictly limited to the litigation recovery).
Both have had their zealous proponents and vociferous critics over the years, and each has been discussed, at times, with hyperbole and, at times, with measured thought. But neither has really been discussed together meaningfully, if at all. Until now. …
This blog aims to change that. Its focus will be trained, in substantial part, on the nature of a marketplace that undertakes to put whistleblowers who need and desire funds — either in order to underwrite the costs of developing their information about fraud or defending their conduct from those whom they target, or because of financial need owing to changing life circumstances — together with Alternative Litigation Financiers — such as hedge funds or syndicated crowd sourced investors — motivated always by the prospect of above normal, uncorrelated returns on their capital and sometimes the chance as well to do what they perceive to be Social Good.
And it looks at how that marketplace is evolving, and what problems and pitfalls — legal, ethical and otherwise — are being encountered along the way. Not to mention, whether this embryonic marketplace will develop into a Social Good … Or Social Evil … And whether and how extensive that marketplace should even be:
- Will it be (and should it) be confined, for example, to supporting individual whistleblowers who bring qui tam false claims suits on behalf of governmental entities or vindication for themselves for retaliation by employers against their whistleblowing activities? Or will this marketplace extend beyond whistleblower-litigants to those whistleblowers who provide governmental agencies, such as the SEC or the IRS, with information of wrongdoing -- and then await (mostly passively) while these agencies hopefully acted upon the information -- all in hopes of ultimately being awarded a bounty pursuant to agency-run whistleblower award programs?
- Will the whistleblowers who present information of wrongdoing to the courts and government agencies in the coming years continue, for the most part, to remain individuals or, with the prospect of litigation funding, will they become aggregations of individuals (each with their own special skills and functions) who may come together to develop and monetize information as a collective entity -- either on an ad hoc, case-by-case basis -- or as part of an ongoing business enterprise?
- Should there even be markets in the first place where private capital arguably underwrites and shapes (and maybe even instigates), in some fashion or another, law enforcement on behalf of governmental entities?
These are ultimate issues to ponder. However, this site will also explore the more practical, day-to-day aspects of litigation financing for whistleblowers and the issues and problems likely to be regularly encountered, such as how the parties to whistleblower litigation financing go about evaluating the worth of whistleblower information and claims generally and how confidential information about whistleblower matters can be appropriately shared with putative funders so that they can undertake appropriate due diligence. …
… Come along for the ride!
