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Bloomberg Law [New York NY]
March 14, 2025
By Emily R Siegel
- ‘All of a sudden everybody became a #MeToo lawyer,’ leading litigator says
- Lawyers use financing to pay for time-consuming prep in sex abuse suits
Law firms pursuing sexual abuse suits against large institutions like the Boy Scouts, the Catholic Church, and a federal prison have turned to outside funders amid increasing competition to land cases.
Moves by states to enlarge the window for filing older sex abuse claims prompted a flood of litigation accusing organizations of turning a blind eye to exploitation. Plaintiffs’ firms are using specialized banks, hedge funds, and litigation funders to sustain the cases.https://www.youtube.com/embed/D9nqJXMXzRI
WATCH: Billion Dollar Lawsuits: When Litigation Finance Met Mass Torts
“You’ve got the cost of litigation as well as depositions and all those other things, so you have to have the capital in order to do your job,” said Jessica Pride, a San Diego attorney who represents victims of sexual abuse. Pride’s firm led litigation against the Bureau of Prisons alleging sexual abuse by corrections officers in Dublin, California, which resulted in a $116 million to settlement deal in December.
Funders gravitate toward mass tort cases with large settlements and institutional sex abuse suits fit the mold. The Catholic Archdiocese of Los Angeles last year agreed to pay $880 million, while a New York diocese reached a $320 million settlement to resolve separate claims of abuse by clergy members. The Boy Scouts of America agreed in 2022 to pay $2.46 billion to settle suits alleging widespread abuse.
Mass tort firms often use high-interest loans, dependent on the value of the firm’s cases, to finance their work. Some also strike deals with funders to share a piece of any winnings on the back end.
“People kind of started pouring into this space,” said Pride. “There weren’t as many mass torts to go after and all of a sudden everybody became a #MeToo lawyer when they realized that those kinds of cases were paying out.”
Firms that represented a large number of abuse victims and played prominent roles in settlement negotiations received outside capital for cases.
California’s Andrews & Thornton represents thousands of plaintiffs in the Boy Scouts litigation, according to its website. The firm had deals with funders Corbin Capital and Catalur Capital from 2020 to 2023, public filings show.
Andrews & Thornton and Catalur Capital did not respond to a request for comment. Corbin Capital declined to comment.
Slater Slater & Schulman, a national platintiffs’ firm, received loans beginning in 2021 with some of the proceeds directly going to sexual abuse cases against religious institutions. The funding came from entities with the same address as Catalur Capital up until 2022. The firm then had loans from a Delaware LLC until 2024 for cases against the same religious institutions. The loan documents cited sexual abuse allegations brought against religious entities in Arkansas, Louisiana, New Mexico, and California as collateral.
The firm declined to comment.
Jeff Anderson and Associates, a New York-based firm specializing in sexual abuse claims, has received funding since 2021 from Delaware LLC Kensal Green. The collateral listed was lawsuits against “the church” and the Boy Scouts of America, according to public records..
The firm did not respond to a request for comment.
Anderson fought with an insurer for a Catholic diocese in Rochester, New York, over its push for more information on the firm’s outside funding. The dispute later went to mediation.
Esquire Bank
Pride is also among the lawyers who use outside funding to offset upfront litigation costs, which firms usually take on a contingency basis in return for a piece of settlements or verdicts. She opted for a line of credit with Esquire Bank, which lends exclusively to plaintiffs’ firms. The bank typically lends up to $30 million at interest rates around 9%, but also does deals with funders. It has shifted away from prolonged mass tort cases, favoring single-event cases.
Esquire Bank declined to comment.
Many of Pride’s clients don’t have the resources to cover litigation costs. She can withdraw from her credit line for individual cases and pay the money back when the case is resolved. She can also pay other attorneys at the firm or retain help from outside.
“It’s relatively cheap money,” she said.
Esquire also lends to firms that aren’t primarily handling sexual abuse cases. Texas lawyer Tony Buzbee who mainly practices personal injury and civil litigation, also represents more than 150 victims alleging sexual abuse by rapper Sean “Diddy” Combs, according to his website.
Esquire has had a loan with Buzbee’s firm since 2021, according to public filings. Buzbee says he doesn’t use it for sexual abuse cases.
“Sexual abuse cases are not the type that I would ever seek financing on,” he wrote in an email to Bloomberg Law.
Case Work Up
Lawyers build abuse cases differently than product liability and personal injury suits, in which financing is often used to process medical records. Instead, lawyers dedicate long hours to gathering testimony and documentation to corroborate abuse claims.
“It’s mostly time-consuming,” said Elise Sanguinetti, founding partner at Arias Sanguinetti, who also has a line of credit with Esquire. “Every time we have to spend more time on one case, we can’t be spending time on another.”
Sanguinetti’s firm handles a variety of matters, including around 30 cases against the Boy Scouts and other suits against school districts, police departments, and hospitals. She doesn’t view the credit line as litigation funding since it’s not directly related to specific cases.
“That’s just funding a business the same way that any other business is funded,” she said.
Firms whose model is focused largely on mass torts may be experiencing some cash flow issues. Those cases are taking longer to resolve, meaning loans are coming due before there are any payouts.
“I don’t want to say we’re seeing some grimmer days in mass torts, but you are seeing them taking a lot longer to kind of find some type of resolution if they ever do,” said Kayla Onder, who leads the sexual abuse practice at OnderLaw in St Louis. “It’s kind of the natural progression of firms to diversify because if you don’t, you’ll drown.”
To contact the reporter on this story: Emily R. Siegel at esiegel@bloombergindustry.com
To contact the editors responsible for this story: Chris Opfer at copfer@bloombergindustry.com; Alessandra Rafferty at arafferty@bloombergindustry.com