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26 Rev. Litig. 707 (2007)
All That Glitters Isn't Gold: Analyzing the Costs and Benefits of Litigation Finance

handle is hein.journals/rol26 and id is 727 raw text is: All That Glitters Isn't Gold: Analyzing the Costs and Benefits of Litigation Finance Courtney R. Barksdale* I. INTRODUCTION ........................................................................ 707 II. THE LENDING PROCESS ........................................................... 710 I. THE LEGAL STATUS OF LITIGATION FUNDING ......................... 716 A. Champerty & Maintenance ............................................. 716 B . U sur , .............................................................................. 723 IV . COST-BENEFIT ANALYSIS ....................................................... 725 A. Costs Associated with PlaintiffLoans ............................. 725 B. Benefits of the Availability of Plaintiff Loans ................. 733 V. PROPOSED SOLUrTONS FOR BALANCING THE COSTS AND B EN EFITS ................................................................................. 735 V I. C ONCLUSION ........................................................................... 738 I. INTRODUCTION In December 1997, Sam DiSalvo suffered two broken vertebrae and permanent neurological damage after the car he was driving was hit by a woman who was driving while talking on a cell phone.' As a result of his injuries, DiSalvo was unable to work to support his family.2 While DiSalvo and his family awaited the outcome of the lawsuit following the collision, mortgages, bills and other financial obligations began to accrue.3 Desperate for money to cover living expenses while awaiting a verdict or settlement, DiSalvo considered getting money from a loan shark. Instead, DiSalvo contacted Plaintiff Support Services, a company that makes high interest cash advances to plaintiffs after evaluating their likelihood of recovery.4 DiSalvo was sold immediately on the prospect of * B.A. Wake Forest University, cum laude, 2000; J.D., The University of Texas School of Law, expected May 2007. The author would like to thank Professor Lynn Baker for her substantive comments and criticism, Dr. Eric King Watts for challenging her to do more than she thought possible, and her fianc6 for his unending patience and support. 1. Daniel Brook, Litigation by Loan Shark, LEGAL AFFAIRS, October 2004, at 42, available at http://www.legalaffairs.org/issues/September-October-2004/ feature brook_sepoct04.msp (last visited Feb. 3, 2007). 2. Id. 3. Id. at43. 4. Id.

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