Source: NYT > Business (paywall)
Litigation finance firms are now securitizing personal injury cases like mortgage-backed securities, fragmenting the economic incentives around settlements and creating new pressure for larger payouts regardless of case merit. In traditional litigation, lawyers absorb risk. Under this model, Wall Street investors front capital and demand returns, changing who profits from civil disputes and how aggressively cases get pursued. The shift concentrates wealth extraction from injury settlements into financial markets while potentially inflating the cost of insurance, torts, and liability across the economy.