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  3. Contingent fees, in which clients pay lawyers only if a case is won, have long been a feature of America’s legal system. Many ot

Contingent fees, in which clients pay lawyers only if a case is won, have long been a feature of America’s legal system. Many ot

admin2022-03-27  49
问题     Contingent fees, in which clients pay lawyers only if a case is won, have long been a feature of America’s legal system. Many other countries used to bar them, wary of importing America’s ambulance-chasing culture. But a belated acceptance of their benefits means they are now widely allowed. "No-win, no-fee" arrangements help shift risks from parties to a suit to their lawyers, and make it less likely that a would-be plaintiff decides not to press a strong case for fear of a big financial loss.
    Around a decade ago, some lawyers took the principle of risk-shifting further. They accepted money from third parties to fund cases in exchange for some of the winnings. Lawsuit finance has since taken off. Fortune 500 companies and New York’s elite law firms increasingly tap outside capital when pursuing multi-million-dollar suits.
    Funds that invest in lawsuits are on the rise. In the past 18 months some 30 have launched; over $2bn has been raised. Last year Burford Capital, an industry heavyweight, put $1. 3bn into cases—more than triple the amount it deployed in 2016. Lee Drucker of Lake Whillans, a firm that funds lawsuits, says he gets calls weekly from institutional investors seeking an asset uncorrelated with the rest of the market—payouts from lawsuits bear no relation to interest-rate rises or stockmarket swings.
    Such outside funding does not just enable plaintiffs to pursue potentially lucrative cases. It also allows law firms to hedge risk. Some clients, worried about the misaligned incentives caused by law firms’ sky-high hourly rates, insist on partial or full contingency-payment schemes. Outside funding lets firms recoup some revenue even if they do not win a case.
    Returns are usually a multiple of the investment or a percentage of the settlement, or some combination of the two. Funders of a winning suit can expect to double, triple or quadruple their money. Cases that are up for appeal, where the timespan is short—usually 18-24 months—and the chance of a loss slimmer, offer lower returns. New cases that are expected to take years offer higher potential payouts.
    A maturing market means more sophisticated offerings. To spread risk, funders are bundling cases into portfolios and taking a share of the proceeds. Last year Burford ploughed $726m into portfolio deals, compared with $72m into stand-alone suits.
    As funders compete for high-quality investments, opportunities in new markets arise. Bentham IMF, a lawsuit funder based in New York, has joined Kobre & Kim, a law firm, to set up a $30m fund for Israeli startups to pursue claims against multinationals—for example, over trade-secret violations. A burgeoning secondary market is likely to develop further, allowing investors to cash out before long-running suits are closed. Burford recently sold its stake in an arbitration case concerning two Argentine airlines for a return of 736％. Such mouth-watering profits should keep luring capital into the courtroom.
Which of the following would be the best title for the text?
选项 A、Clients and lawyers
B、Risk-hedging strategies of lawyers
C、The increasing investment in lawsuits
D、Appealing returns from lawsuits
答案D
解析 主旨题。本文讲述的是，有利可图的诉讼市场的风险对冲以及其对律师和第三方投资者的吸引力，故D项符合。A项“客户与律师”，过于片面，故排除；B项“律师的风险对冲策略”，本文作者并未对此进行展开，不足以概括全文，故排除。C项是原文中的一个细节，不足以概括全文，故排除。
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