The CAFA Law Blog is delighted to bring to you today  a post authored by Earl G. Boyle, a chief legal analyst for Counsel Financial, regarding litigation funding.


In an effort to reduce forum shopping and to curb class action lawsuit abuse, in 2005 Congress enacted The Class Action Fairness Act ("the Act"). The Act expanded federal diversity jurisdiction for certain class actions in excess of $5M where there is not complete diversity. The Act also required federal courts to review class action settlements with greater scrutiny.

Prior to the Act, plaintiffs’ attorneys could "forum shop," by seeking out friendly courts with track records of favorable rulings and settle cases inconsistently from one state to another. Since its inception, the Act has helped move major class action lawsuits from state to federal courts.

According to researchers at the Federal Judicial Center, since the enactment of the Act in 2005, there has been an  increase in original class action lawsuit filings in federal court. Consumer class action lawsuits based on diversity have increased in federal courts, but adequate litigation funding continues to remain a paramount concern for the attorneys involved.

Class action lawsuits are often complex and time-intensive. It is common for class action lawsuits to take years before they reach settlement or are resolved in the courtroom. Although the journey can be long and expensive, plaintiffs’ attorneys must be prepared for the cost of fighting for their clients.

As the legal landscape continues to evolve, many attorneys are finding traditional methods of litigation funding may not be enough. Self-funded attorneys often lack the resources to survive lengthy litigation that can span years before any funds are recouped. Even after settlement, administrative costs can be extremely expensive. Attorneys who finance through banks are learning that traditional lending may no longer be the best choice for their profession, or in the best interest of their clients.

When a client is depending on an attorney to fight for their interest, inadequate funding for the representing law firm is something that cannot be risked. For many of these attorneys, a line of credit is the smartest alternative. As consumer class actions continue to be filed with increasing numbers in the federal forum, attorneys representing harmed plaintiffs who are wise to the challenges of litigating class action lawsuits are better preparing themselves for the costs that lie ahead.

Earl G. Boyle, Esq., General Counsel — has over 20 years experience as an attorney. Mr. Boyle currently serves as a chief legal analyst for Counsel Financial, conducting legal due diligence on the case portfolios of existing clients and applicants. Mr. Boyle was admitted to the New York State Bar in 1992 and received his Juris Doctor degree from Syracuse University College of Law. He is currently a member of the New York State Bar Association.