By Tadhg Walker
There is one thing lawyers need to invest time in a case: money. Money is usually the principal cause for a lot of people, even if they have a valid case, to be denied representation. The rule of law is meant to secure justice for all but many are denied this right due to a lack of capital. This funding gap has led to a growing number of crowdfunding sites dedicated to legal services, allowing the underrepresented to have their day in court.
Hiraa Khan, co-founder of CrowdDefend, came to this realisation during his three year term working at the American Civil Liberties Union. Khan discovered the “prohibitive costs of legal representation, court fees, associated trial costs can exclude most lower and middle income Americans from participating in the justice system, resulting in an astonishingly high number of legitimate legal matters that never make it to the courtroom.” According to Khan, 67% of poor Californians’ legal needs are not met by legal aid services, a fundamental violation of the rule of law. CrowdDefend is taking on “impactful, socially motivated cases,” like helping Adan to post bail in the USA where he is seeking asylum, after escaping gang members who were trying kill him in his home country of Guatemala.
Michael Helfand, founder of FundedJustice, also identified the need to bridge this funding gap. Having created an online referral service to aid people finding a lawyer, Helfand found he was often explaining to those using his website they required money to hire the right attorney, noting “if you are short on money… you have very limited realistic good options.” While still in its infant stages, with only two successful campaigns thus far, it is filling a valuable niche by allowing an alternative path to achieve justice.
High costs to accessing justice also prompted Australian Andrew Montesi to set up CaseFunder. The site works in a similar way to mainstream crowdfunding websites like Kickstarter: users upload a campaign with their story to attract donors, providing a funding target and deadline with CaseFunder taking a 5% commission on all funds raised.
Also in Australia lawyer Sean Roche is helping community law centers with their current funding crisis. LawFunder, a fee free service, aims to help those who are currently missing out on legal help from their local law centers. LawFunder also provides individuals an alternative to commercial litigation financing, where commission can be over 40%.
Litigation Financing has been around for years. Now this estimated US$200 billion market is slowly being opened up to the public. Returns are typically between 30% -60%, provided the case is successful. Unsurprisingly it has attracted a lot of criticism: Robert Weber, IBM’s general counsel says “this is the latest gimmick in a headlong rush to degrade legal professionalism.” America’s Chamber of Commerce, a business lobby, fears a rise in junk lawsuits.
Despite criticism there has been a rise in specific litigation financing crowdfunding platforms seeking to capitalise on a multi-billion dollar market. Invest4Justice offers any investor the opportunity to donate towards litigation cases, on the promise of returns of up to 500%. Other platforms are more selective about who they let invest: LexShares only allows accredited investors the opportunity to invest, with a minimum investment of $2500 required. Both sites work by betting on a case’s outcome.
On the other side of the coin is CrowdJustice, a UK based platform set up by ex-United Nations lawyer Julia Salasky, targeted at public interest litigation. She established CrowdJustice to try and stem the government’s continued erosion of access to justice. Salasky says she is “hacking the legal system [using the crowd] to enable communities to invest in their future.”
It is in public interest litigation where crowdfunding in the legal sector will likely see success. Public interest cases often affect thousands, if not hundreds of thousands of people. Previously to bring such a case public it would require relying on a few individuals to front a large amount of money for the benefit of others. With crowdfunding the community can all pitch in, raising funds and mobilising support to achieve justice.
Dr Chris Gallivan, Dean of Law at University of Canterbury, New Zealand, echoes the thought that crowdfunding public interest litigation is most likely to be successful due to its wide appeal. This is not without its problems. Dr Gallivan identified accounting for fees, charging of a defendable rate and use of excess funds would need careful consideration. Further, as crowdfunding campaigns are conducted in a public forum issues of client confidentiality, accusations of prejudice and inhibiting of a fair trial may arise. These problems are likely surmountable, but must be handled with care.
Crowdfunding in the legal sector will help break down barriers to help the underrepresented achieve justice, as well as providing a valuable balance against governments and corporate power through public interest litigation. The crowd can use its power to help ensure equitable outcomes for all.