Lavie and Avraham, ‘Winner Pays: An Alternative Method to Public Funding’

ABSTRACT
Many meritorious claims do not reach courts due to the prohibitive costs that are associated with access to justice. While third-party funding, through non-recourse loans, is often available, the market cannot help all claims. For instance, where the claim lacks clear monetary value (eg, injunction), or has small monetary value, market-based funding seems futile. Inspired by the third-party funding industry, we suggest public, non-recourse funding. Contingent public funding could broaden access to justice; more importantly, it could bridge the gap between the social and private benefits of the use of the legal system. While private funders are profit-driven, public funding should take into account societal considerations, which should be reflected by the interest on the loan. Lawsuits that provide positive societal benefits, eg, clarifying the law and creating important precedent, deserve a lower interest rate. We demonstrate our suggestion through a simple mechanism, which could easily be integrated into the current system – a conditional waiver of court fees. Under our proposal, at the beginning of the case, judges would be able to defer the payment of court fees. In that case, and similarly to third-party funding, losing lawsuits would be exempt from fees; but successful plaintiffs would be obligated to pay those fees at the end of the case, multiplied by a certain factor that reflects the social value of the case. We discuss the desirability of such a regime, and the ways to mitigate notable concerns, such as flood of weak cases.

Lavie, Shay and Avraham, Ronen, Winner Pays: An Alternative Method to Public Funding (June 1, 2024), 25 Theoretical Inquiries in Law (forthcoming 2024).

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