MIAMI – Law firms in Southern Florida are emphasizing third-party litigation financing as a means to gain the financial resources their clients need to win cases, according to a recent Law.com report.
Law.com reports that South Florida law firms are eyeing litigation funding to obtain substantial returns with less risk.
Eric Ostroff, a managing partner at Meland Russin & Budwick, is a proponent of the practice, which is mostly unregulated in Florida.
Eric Ostroff
| Meland Russin & Budwick
“I think litigation financing has really expanded substantially over the last couple of years and it’s something that more and more firms are considering,” Ostroff told The Florida Record. “There’s a lot of different business models that law firms can have and this works into a variety of different ways for certain types of law firms.”
While Ostroff and many others are in favor of third-party litigation financing, there are concerns that tort-reform proponents have about litigation financing, including the unregulated nature of the litigation financing industry, potentially high loan rates that hurt consumers, and potential negative effects on the civil justice system due to the involvement of third parties with no legal stakes in a case.
Several reports say that state lawmakers in this year's legislative session had talked about moving forward on bills to regulate the industry, but ultimately no bill was passed.
“I’m not aware of any legislation,” Ostroff said. “At the end of the day this has been a negotiated agreement between generally three parties: the financing company, the law firm and the client…at the end of the day the law firm still has its duty to its clients and I have not seen anything that suggests to me that this is being abused.”