February 14, 2006

Professors Larry Ribstein and Christine Hurt comment on the litigation financing discussed in yesterday's post. Ribstein expands on the principal-agent problems discussed yesterday, while Hurt tries to explain why she approves of some forms of subprime lending but not others. Hurt marvels that "We could all become plaintiff's lawyers just by being investors!", but that opportunity has been available for decades through derivative investments on litigation-sensitive stocks.