Investment Firms Financing Divorce Cases

The New York Times ran a fascinating story on December 4, 2010 about investment firms financing legal fees in divorce cases.  The idea is that  parties that can’t afford legal fees get funding to be able to pursue more aggressive positions in their case vs. settling because they ran out of funds to fight.  The Times identified divorce funding as part of a larger trend in third parties investing in lawsuits.  The ability to pay legal fees during a divorce can affect both choice of counsel and what positions are taken, and divorce financing in high asset cases is an interesting development.  I would recommend anyone involved in a high asset dispute who is unable to pay fees as the case proceeds to have a thorough discussion with their lawyer about this option and and conduct a cost benefit analysis.  A link to the full article is here.

About Sean Stephens

By Sean Stephens Google + Sean Stephens is divorce and family law lawyer, and a founding member of Stephens & Margolin LLP He was born in Eugene, Oregon and is a fourth generation Oregonian. Sean Stephens attended the University of Oregon, and graduated in with a Bachelor of Science in Psychology, with a minor in English Literature. His psychology studies emphasized early childhood development. You can find more about Sean Stephens at Stephens & Margolin LLP Follow him
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2 Responses to Investment Firms Financing Divorce Cases

  1. Divorce cases are handled by the family court system in each state. Usually, divorces are settled out of court and there is no need to do more than reach a marital settlement agreement and file the appropriate paperwork with the court clerk. Divorce attorneys are often involved in this process to represent and advise each spouse during negotiations. Jury trials for divorce cases are extremely rare. When they do occur, they sometimes make the news due to the spectacle they present. Divorce cases may take less than a month or several years depending on the jurisdiction. Uncontested divorces are the quickest. The process takes longer in states that require a lengthy waiting period after legal separation before a divorce can be finalized. Some couples choose to expedite their divorce by temporarily moving to another state with more lenient regulations.

  2. As a divorce attorney, I would consent to such a measure but only so long as it is made perfectly clear at the outset of the case that the investment firm is not the client.

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