How Wall Street Money is Impacting the Mass Torts Sector
Day one of this year’s LF Dealmakers event featured an entire day focused on one of the most prominent legal sectors within the litigation funding sphere: Mass Torts.
In the keynote session, titled “Mass Torts at a Crossroads: Is Wall Street Money a Catalyst or Complication?”, Seth Meyer, Managing Partner at Meyer Law Firm moderated a discussion between Steven Weisbrot, CEO of Angeion, and Harris Pogust, Founding Partner of Pogust Goodhead.
The conversation focused on Wall Street money’s impact on the litigation funding sector. The key question being if the influx of capital is a catalyst or complication.
Harris Pogust began the conversation by stating that there is no clear answer to that question. Many lives have been changed for the better thanks to the emergence of mass torts funding. That said, there are simply too many plaintiffs, and those plaintiffs that do get money aren’t seeing enough of it. “When I have to call some family whose family member died of cancer, and they’re supposed to get $100,000, but after attorney fees and all the other fees, they’re only getting $30,000, that makes me puke. That’s not what I got into this industry.”
While Steven Weisbrot does agree that the quantity of damages often isn’t reflected in what is deserved, he places the blame on access to capital, and the lack of optimization around bringing these types of cases in a more efficient manner. “I think capital really helps where you have a hard-to-reach target audience, whether they’re incarcerated or in geographically disparate locations. But we can’t just have attorneys settling saying ‘give me $1.2 billion and I’ll carve it up as I see fit.’”
Ultimately, there are four groups here: investors, funders, law firms and clients. Unfortunately, the people getting hurt the most are the clients. All other parties seem to be doing well. “There are firms that take $10 million and aggregate cases, and they make millions of dollars and they are happy,” explains Pogust, “but I’m a trial lawyer, not a businessman. I want to try good cases, not just make money.”
Pogust wants to see Wall Street be more careful with whom they give money to, so they don’t bring garbage cases and give the sector a black eye.
Wiesbrot agrees that vetting the firm and understanding their communication strategy is key. Also understanding if their strategy is about litigating vs. just aggregating. “Nurturing those relationships means less client attrition, and it’s also good because I can’t tell you how many random pieces of evidence have come out of those conversations. It’s good to hear from your clients directly about their experiences.”
In the end, Pogust was proven correct, in that no clear answer to the question of whether Wall Street money is a net positive or negative emerged. One can make a case either way, and as mass torts funding continues to accelerate in the coming years, it is doubtless this debate will continue on.
