Crowdfunding sites aim to make the law accessible to all

Jonathan Ford at the Financial Times: “Using the internet to harness the financial power of crowds is hardly novel. Almost since the first electronic impulse pinged its way across the world wide web, entrepreneurs have been dreaming up sites to facilitate everything from charitable donation to hard-nosed investment.

Peer-to-peer lending is now almost part of the mainstream. JustGiving, the charitable portal, has been going since 2000. But employing the web to raise money for legal actions remains a less well ploughed piece of virtual terrain.

At first glance, you might wonder why this is. There is already a booming offline trade in the commercial funding of litigation, especially in America and Britain, whether through lawyers’ no-win, no-fee arrangements or third party investment. And, indeed, a few pioneering crowdfunding vehicles have recently emerged in the US. One such is Invest4Justice, a site that boldly touts returns of “500 per cent plus in a few months”.

Whether these eye-catching figures are ultimately deliverable is — as lawyers like to say — moot. But there are risks in seeking to share the fruits of a third party’s action that can make it perilous for the crowdfunding investor. One is that when actions fail, those same backers might have to pay not only their own, but the successful party’s, costs….

But not all crowdfunding ventures seek to reward participants in the currency of cold financial return. Crowdjustice, Britain’s first legal crowdfunding website, seeks to scratch quite a different itch in the psyches of its participants….Among the causes it has taken up are a criminal appeal and a planning dispute in Lancashire involving a landfill site. The only real requirement for consideration is that the legal David confronting the corporate or governmental Goliath must have already engaged a lawyer to take on their case….This certainly means the risk of being dragged into proceedings is far lower. But it also raises a question: why would the public want to donate money to lawyers in the first place?

Ms Salasky thinks it ranges from a sense of justice to enlightened self-interest. “Donors can be people who take human rights seriously, but they could also be those who worry that something which is happening to someone else could also happen to them,” she says. It is one reason why perhaps the most potent application is seen to be in the fields of environmental and planning law. …(More)”