More
He started writing a blog and got over 700,000 people to follow it in a very short time. That led to a knowledge of SEO. The lawyers were asking, hey, what are you doing? We can help all these victims. They ended up getting about 12,000 claims from the blog. That led to other mass torts, and then a deep knowledge of Facebook. The company was started in October 2015, and by 2016 it had $2 million in revenue, just doing Facebook advertising for law firms. The way he puts it is that you build the machine right one time, it just works — and the machine hasn’t changed since 2015.
How did you get into this space?
Chou: Early in my career I was immersed in the world of commercial conferences. It’s a very focused business, building an event from scratch from start to finish. You’re basically working against the clock churning out as many conferences as you can as quickly as you can.
What I learned over time is that you don’t have to take that approach. It’s short-sighted and doesn’t deliver true value to participants or the industry as a whole. That’s why our focus at Dealmakers, first and foremost, is on quality and meaningful experiences, to bring people together. We’re invested in the spaces where we operate. We develop partnerships with leading industry players, which ultimately helps us to learn about the industry and optimize the discussions and dealmaking that happens at our events.
One of the things we’ve been hearing about in our conversations with the market is the growing interest and convergence between litigation funding and mass torts. Since X Social sits at the intersection, can you share more about what you’re seeing in the mass tort landscape and how funding is impacting it?
Table 2
| Jurisdiction | Type | Category | Status |
| AL | Commercial, Consumer | Case law | · Court held that funding was void on public policy grounds and described agreement as “gambling” and “speculative.” See Wilson v. Harris |
| AR | Consumer | Regulation | · Funders can’t charge interest rates over 17% and must disclose lending terms. |
| AZ | Commercial, Consumer | Regulation, case law | · Litigation finance protected by the work product doctrine. See Continental Circuits LLC v. Intel Corp. |
| · In 2020 Arizona Supreme Court eliminated ethics rule barring nonlawyer ownership of law firms and other legal services. | |||
| · In 2021, Arizona allowed ABS. | |||
| · Champerty not recognized. See Landi v. Arkules | |||
| CA | Commercial, Consumer | Regulation, case law, legislation | · Litigation finance allowed under state law as of 2020. |
| · Formal opinion confirms responsible use of funding does not present ethical barriers to the practice of law. | |||
| · Champerty doctrines not adopted. | |||
| · Litigation finance legislation on hold until 2024. | |||
| · Communications with a litigation funder are usually shielded from disclosure. | |||
| · California Supreme Court issued an opinion in June that the deadline for seeking vacatur of an arbitral award is subject to equitable tolling and equitable estoppel. See Law Finance Group, LLC v. Key | |||
| DE | Commercial | Regulation | · Litigation finance is permitted. |
| · Champerty and maintenance doctrines usually do not apply to legal finance. | |||
| · There are no general rules on disclosure, however Chief Judge Connolly has issued a standing order requiring disclosure of funding in any case before him in which a funder is not a party to the suit. | |||
| FL | Commercial | Regulation | · State bar association discourages use of nonrecourse funding companies. |
| · State bankruptcy court requires only that the third party and the privilege holder are engaged in common enterprise, and that legal advice conveyed in their communications relates to the goals of the enterprise. | |||
| IL | Commercial, Consumer | Regulation | · Litigation finance is permitted. |
| KY | Commercial, consumer | Regulation | · Litigation finance is generally not permitted. |
| · Federal courts have ruled that litigation finance is contrary to public policy and that such contracts are void. | |||
| MD | Commercial, consumer | Regulation | · Litigation finance is treated as loans by state regulators. |
| ME | Consumer | Regulation | · Funders must register with the state. |
| · Funders can’t assess fees for more than 42 months from the date of the contract. | |||
| MN | Commercial, consumer | Regulation | · Litigation finance is permitted. |
| · Champerty doctrine abolished in 2020. | |||
| NC | Commercial, consumer | Regulation, case law | · Champerty and maintenance common law remains in effect. |
| · North Carolina most often treats litigation finance agreements as void and against public policy. See Charlotte-Mecklenburg Hospital Authority v. First of Georgia Insurance Company | |||
| NE | Consumer | Regulation | · Funders must register with the state. |
| · Contracts must include all costs, fees, and rates at 6-month intervals for 36 months. | |||
| NJ | Commercial, consumer | Regulation, case law | · Litigation finance is permitted. |
| · Courts reject prohibitions on champerty and maintenance. | |||
| · Disclosure required under state rule. | |||
| NV | Consumer | Regulation | · Consumer funders must be licensed. |
| · Funding contract must include the maximum amount to be assigned by the consumer and a payment schedule. | |||
| NY | Commercial | Regulation | · Litigation finance is permitted. |
| · Champerty doctrine applies, with some exemptions for transactions over $500,000. | |||
| · Lawyers must provide candid advice about benefits and risks, avoid conflicts of interest, and maintain client control of the proceeding, per the New York Rules of Professional Conduct. | |||
| OH | Commercial, consumer | Regulation | · Litigation finance is permitted. |
| · State statutes require specific contract wording and disclaimers. | |||
| · Funding must be disclosed to the court in camera. | |||
| · Nonrecourse contracts must include total amount to be repaid by the consumer in 6-month intervals for 36 months, including fees, and the annual rate of return. | |||
| OK | Consumer | Regulation | · Funders must obtain a state license. |
| · Contracts must include payment schedule and maximum amount due. | |||
| PA | Commercial, consumer | Regulation, case law | · Litigation finance generally permitted, with some exceptions. WFIC, LLC vs. LaBarre |
| TN | Consumer | Regulation | · Funders must be registered with the state. |
| · Funders can’t charge annual fees of more than 10% of original funding. | |||
| · Funding term limited to 3 years. | |||
| TX | Commercial, consumer | Regulation, case law | · Litigation finance is permitted. |
| · Champerty does not apply. | |||
| · Funding information protected as work product. See United States v Ocwen Loan Servicing | |||
| UT | Commercial, consumer | Legislation | · Funders must register with the state. |
| · Effective this year, most commercial litigation funders are required to file loan details with the state for amounts less than $1M. | |||
| · Consumer funding cannot exceed $500,000. | |||
| VT | Consumer | Regulation | · Funders must register with the state. |
| · Funders must file annual reports on number of contracts, dollar amounts, and outcomes. | |||
| · Funding reports must include total amounts, itemization of charges, and annual rate of return. | |||
| WV | Consumer | Regulation | · Funders must register with the state. |
| · Contracts must disclose total amounts and payment information at 6-month intervals for 42 months, including fees and charges. | |||
| · Funders can’t charge annual fees of more than 18% of original funding. | |||
| · Parties to a civil action must disclose agreements with other funded parties to the action. | |||
| WI | Commercial, Consumer | Regulation | · Parties to a civil action must disclose most agreements with other funded parties to the action. |