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Current Media Releases
Academic: Allowing sale of legal claims would improve access to courts 13 August 2008
New research has concluded that accessing the justice system could be easier and more affordable if it operated more like the insurance system, whereby claim holders are able to sell their claims to third parties better positioned to prosecute them. Dr Vicki Waye, author of the study and Professor of Law at the University of South Australia, argues that allowing personal injury claims to be traded and sold would ease the burden for individuals dealing with an expensive and difficult to access legal system. At a time when governments around the world are searching for alternative sources for funding litigation, legal experts have applauded the research, published in a book entitled Trading in Legal Claims, for the insights it offers into both resolving access to justice issues and the potential for a new multi-billion dollar industry. Waye’s research and conclusions are based on comparisons between systems in Australia, the UK and the US. “Many people are in a position to claim for personal injury but due to difficulties accessing the system, they don’t have the capacity to recover their losses,” Waye says. “Excluding claims for physical and mental injury, personal injury claims are mainly about financial injury, ranging from bad financial advice to credit contracts. “Currently, access to the legal system is limited to the very rich, the most persistent, or those who have a large stake in the outcome, so for the everyday person it’s just too expensive and time consuming to pursue these types of claims. It’s just not an easy system.” Waye proposes it would be far easier and more cost effective for a claim holder to sell their claim to a centralised litigation broker who would operate on their behalf, in the same way insurers do. “A litigation broker or entrepreneur would pay the individual for the claim and then assume all the responsibility and risk for its success. “Like insurers, such entrepreneurs would be better in a much better position to deal more effectively, efficiently and cheaply with the claim, and bear the litigation risk, because they can evaluate the associated risk and spread it across a wider pool of clients.” Waye concedes that the while the concept does have its opposition and is certainly controversial among the legal community, to some extent it is already happening. “Courts and lawyers don’t like it because it means the claim is redressed outside their forum and the idea of ‘commodifying’ justice is also contentious,” says Waye. “That you can put a price on suffering for a third party to make money is offensive to some. “However, we’ve already allowed large litigation funders to loan large amounts of money to underwrite claims in exchange for a proportion of the proceeds or settlement. “You can also already sell certain claims, and we’ve even come far enough to sell portions of personal injury claims. If you’re prepared to go that far, why not sell the whole claim? “The road has already been travelled a certain way, we’re just not quite there yet,” Waye says. Waye's conclusions were also drawn having taken into account issues regarding regulation, costs, abuse of process and conflicts of interest likely to arise should the sale of legal claims be permitted.
Media contact: Professor Vicki Waye (author of the research) is available for
interview:
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