Crowdfunding Civil Justice

Abstract

The Article provides a systematic law and economics analysis of civil litigation crowdfunding. It first distinguishes between investment-based and non-investment-based crowdfunding models. Investment-based litigation crowdfunding is generally a welcome phenomenon, because it enables parties to pursue meritorious claims and defenses without generating a significant risk of frivolous litigation. Thus, it should be minimally regulated by securing disclosure of relevant information to potential investors. Non-investment-based crowdfunding of process costs should be subject to professional vetting, which will inhibit frivolous claims and defenses that waste scarce administrative resources and do not further the underlying goals of civil law. Non-investment-based crowdfunding of outcome costs should be prohibited when it undermines the primary objectives of substantive law.