Abstract
Portfolio-level third-party litigation funding in medical malpractice creates conflicts of interest that existing professional responsibility doctrine under Model Rule 1.7 was not designed to address. Unlike single-case consumer funding, which may improve access to justice, portfolio funding aggregates dozens or hundreds of malpractice claims into diversified investment vehicles, optimizing for internal rates of return on the portfolio instead of outcomes for individual plaintiffs. What follows, is the first sustained analysis of this gap.
Drawing on clinical and legal perspectives, the analysis distinguishes a single-case from portfolio funding and identifies four portfolio-specific conflicts under MRPC 1.7: the swing-for-the-fences problem, cross-subsidization, information asymmetry, and dualagency conflicts. The last of these arises from private equity’s simultaneous ownership of healthcare providers and investment in litigation funds. The analysis then traces a nuclear verdict feedback loop linking portfolio-funded trial strategies to premium escalation and constricted patient access, and proposes a graduated regulatory framework incorporating mandatory disclosure, bright-line prohibitions on funder settlement vetoes, and crossregulatory coordination.
Without targeted reform, the financialization of patient recovery will produce systemic costs borne most heavily by the patients the system exists to protect.
Recommended Citation
Barry J. Cohen,
Betting on the Body: Private Equity Portfolio Funding of Medical Malpractice Litigation and the Financialization of Patient Justice,
39 J.L. & Health
167
(2026)
available at https://engagedscholarship.csuohio.edu/jlh/vol39/iss3/5