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The Inauthentic Claim

Posted by on Sunday, January 30, 2011 in Articles, Volume 64, Number 1, Volumes.

This Article argues that third parties should be able to invest in lawsuits to a much greater degree than is currently permitted in most jurisdictions in the United States. The laws of assignment and maintenance limit the freedom of litigants to sell all or part of their lawsuits to strangers. I argue in the Article that the foundation of both doctrines is based on something I call the theory of “the inauthentic claim.”

The theory of the inauthentic claim asserts that there is a quality, separate and in addition to legal validity, which confers “authenticity” to a lawsuit. The theory does not presuppose that “inauthentic” lawsuits are more likely to be spurious, fraudulent, or frivolous than “authentic” lawsuits. It holds, instead, that the mere fact that a third party involved him- or herself in the suit for the wrong reasons (either by taking an assignment in the suit or supporting the suit), is proof that the suit is against public policy.

The theory of the inauthentic claim is important because it plays an important role in restraining transactions between litigants and third parties today. The law of assignment, while much more liberal than it was at the time of Blackstone, still forbids the assignment of numerous causes of action, including suits for personal injury and fraud. The law of maintenance has not been liberalized nearly as much as the law of assignment, and there is an active debate occurring within the courts and among policymakers today about whether to allow increased investment in litigation.

This Article examines two arguments that might be used to defend the theory of the inauthentic claim, one from history and one from jurisprudence. In my opinion, neither argument is persuasive. I conclude the Article by sketching a research agenda based on empirical evidence that would help policymakers and judges choose the socially optimal set of rules for third-party investment in litigation.