Planning to Invest? Have I Got a Lawsuit for You!

There’s gold in them thar shills

By Ed Goldman

A somewhat arcane investment “instrument” that’s been around for years but recently cadged some publicity is litigation investing.

Sole investors and even investment groups have help finance lawsuits that portend potentially big paydays.  Experts say there’s nothing legally wrong with the practice (in most states) though I imagine it can compromise the seeming sincerity of a lawsuit if it’s being funded by a defendant’s political enemy or a compulsive gambler.

When I discovered that wagering on the outcome of a court case can be part of one’s investment portfolio, well, I simply had to get the “deets,” as the kids say. (When adults say it, they’re referring to the ingredients in mosquito repellant.) 

So I drop in on my financial advisor, Kay Syrah-Syrah, who’s worked at home for the past three-to-seven years under a court monitoring agreement that requires her to wear what I consider a very attractive anklet. “Don’t be alarmed if it beeps from time to time,” Kay says as she greets me. “It’s like wearing a more insistent Fitbit.”

It may sound odd that I’d seek advice someone who admits she hasn’t paid any taxes—federal, state, inheritance or sales—for decades. She also refuses to pay handling fees, to put stamps on letters she mails or even to tip baristas. “I always order a plain cup of black coffee,” she says. “I’m supposed to tip people for knowing how to get the coffee into the cup instead of down their shirt-fronts? I don’t think so, Buster.”

When I first started working with Kay I always felt a special tingle when she called me Buster. But over time, I realized it was also the name she assigned to her pit bull, Siamese cat, ex-husband (who was convicted of making a terrorist threat against the couple’s interior decorator) and dwarf hamster. Needless to add, the tingle evanesced.

As usual, Kay starts out by reassuring me that I have a very robust portfolio. And, also as usual, she doesn’t mean my financial package: she means the case I carry my paperwork in. “It’s what they call tooled leather, am I right?“ she asks. 

“Suede,” I correct her. 

“And so easily,” she says, “which is why I love having you as a client.” I let that pass, figuring I’ll think of a witty riposte on my way home and text it to her. As soon as I figure out what she said.

I tell Kay I’m hoping to tap into the investment instrument she touts on her website, LIOWYSs ( Litigation Investment Options While You Sleep). The list includes: car accidents; contract claims; slip-and-fall-down-and-go-boom cases; slander; libel per se, and even defamation per quod.

That last one, defamation per quod, occurs when “a person is erroneously accused of being involved in an automobile accident by an insurance company…It is NOT defamation per se because the false statement did not involve words that imputed criminal conduct or lack of chastity,” according to chicagolawfirm.com. Until I saw that had no idea you could still sue somebody for a lack of chastity. I silently wonder if punishment involves having a scarlet letter tattooed on your clavicle. 

In short, I tell her I’d like to invest in almost anything that you can sue somebody for and hope to share in the windfall when the court decides in favor of the person or entity suing. “I like that you came prepared,” Kay says. “I get sooo many idiots who go, ‘Whatever you say, Kay!’ So: which of these investments interest you?”

“Whatever you sa—Wait. What do you have in a defamation per quod? I’m probably a medium-long.”

“What?”

“Sorry, I thought I was trying things on.”

She lets that pass, whips out her iPhone, taps a few keys and says, “Okay. This one’s perfect. A guy gets diagnosed with infectious eczema even though he went to the doctor because his apnea was keeping his wife awake.”

“Snoring?”

“No, just waking her up all the time to complain, ‘I have apnea.'”

“Ah.”

“So the guys says, ‘I don’t think I have infectious eczema at all. I’d like a second opinion.’ So the doc says, ‘All right. I also think you’re tubby.’ Well, this makes the nurse in the room start giggling. So the guy is suing the doctor, the nurse, the doctor’s practice group, the group’s insurance carrier and the building’s janitor, who may have overheard the exchange. He’s asking for $17 million for defamation per quod plus damages for having been body shamed in a suite of garden offices.”

Impressed, I shake my head and sigh at the amount. “What do you think will happen, Kay?”

“They’ll settle for $50,000 plus a gift card for Starbucks,” she says. “After court costs and incidentals, for your investment of, say, $20,000, you’ll earn about $147. And that’s tax-free, Buster.”

I try to look as though I’m mulling that but I never really developed a Lost In Thought look that convinces anybody. So I ask, “That’s $147 plus my investment of $20,000, right?”

“Now, now, don’t try for a grand-slam homer your first time at bat,” she says. “Are you putting this on your credit card, debit card or crypto non-card? Don’t take too long to decide, I’m getting a message from my parole-I-mean-payroll officer.”