Exoneration Finance
Kay L. Levine, Russell M. Gold
The path to financial compensation for the wrongfully convicted can be complex and time-consuming. Exonerees often struggle to make ends meet and function in free society, let alone navigate serpentine processes while waiting years for the recovery they deserve. Securing the assistance of an attorney is often a critical step, but too few lawyers are willing to risk accepting these complicated cases on a contingency-fee basis—the only way that exoneree-clients can likely pay their lawyers without outside help.
Litigation finance—an important tool for increasing access to justice in tort cases—could help close this access to justice gap for exonerees. In a practice called client-directed financing, litigation funders have provided a relative handful of exonerees with cash advances, often leading to greater recoveries in the long run. After considering the benefits and burdens of client-directed financing, we argue that litigation funders ought to consider lawyer-directed financing as well. Through lawyer-directed financing, financiers provide funds directly to private lawyers (instead of to their clients), which mitigates the lawyers’ contingency-fee risk and thereby encourages more lawyers to represent exonerees. If more lawyers were to handle more exoneration compensation matters, the secondary benefits could be significant: securing more money for more exonerees, enhancing public safety, developing a more experienced bar, and increasing the likelihood that some police and prosecutors will alter their behavior towards future suspects and defendants.
For lawyer-directed financing to emerge, many states would have to make two changes to their laws: First, state supreme courts would need to interpret their attorney-client privilege laws to allow for necessary information to be shared with the financier without constituting waiver. Second, laws prohibiting champerty and sharing fees with non- lawyers would need to be removed. Even with those changes, we believe that ethics rules should properly constrain the financier’s ability to control the legal matter and that the risks presented by outside financing are outweighed by the gains in access to justice for the many exonerees who don’t presently have lawyers. For these reasons, we believe the expansion of litigation finance for exonerees merits serious consideration.
Recent Case: Donziger v. United States, 143 S. Ct. 868, 215 L. Ed. 2d 288 (2023)