Law & Economics student, Jean Y. Xiao, has been admitted to candidacy for the Ph.D. Her dissertation is titled, “An Empirical Examination of Consumer Litigation Funding.” Ms. Xiao’s committee chair is Professor Paige Marta Skiba. Professors Andrew Daughety, Rosa Ferrer, Brian Fitzpatrick and Jennifer Reinganum comprise the rest of Xiao’s dissertation committee.
Summary of the dissertation topic
This dissertation will study a growing type of credit for cash-constrained personal injury plaintiffs called consumer litigation funding, which takes the form of a nonrecourse loan. There has not been a uniform approach to regulating funding because it is unique among financial services: funding affects not only consumer welfare but also litigation. Further, governing entities lack empirical evidence on the nature and impact of these nonrecourse loans. This dissertation attempts to inform regulation by being the first to empirically examine consumer litigation funding. This work studies the effects of nonrecourse loans on medical malpractice claim payments and duration (Chapter 1) and formal and informal bankruptcy (Chapter 2). Finally, Chapter 3 explores the effects of the funder-law firm relationship and competition on interest rates and profitability.