The Whac-A-Mole Game: An Empirical Analysis of the Regulation of Litigant Third Party Financing

Ronen Avraham of Tel Aviv University Buchmann Law Faculty and the University of Texas School of Law, Anthony Sebok of Benjamin N. Cardozo School of Law, and Joanna Shepherd of the Emory University School of Law explore the impact of states’ regulatory activity on funders’ behavior and consumers’ welfare, concluding that, unsurprisingly, laws or court decisions that loosen restrictions on litigation funding are generally associated with greater funding activity, while restrictions on the interest rate funders can charge are associated with an almost 15% reduction in funding activity.