Third-party litigation funding is facing fresh criticism after it came to light last week that PayPal billionaire and former Sullivan & Cromwell lawyer Peter Thiel has been underwriting the ongoing legal smackdown between wrestling icon Hulk Hogan and Gawker Media, potentially because of a personal vendetta against Gawker. However, the litigation finance industry has been quick to separate itself and its business models from the headline-heavy case, which recently resulted in a $140m jury verdict against Gawker for posting online a video of Hogan having sex with a friend’s wife.

Funders 'don't have an agenda' 

‘It’s really nothing like what we do,’ Bentham IMF chief Ralph Sutton told The American Lawyer, adding that wealthy individuals can insert themselves into litigation for political reasons but that funders like Bentham ‘don’t have an agenda.’ His sentiment was echoed by Gerchen Keller Capital managing director Travis Lenkner: ‘This is litigation funding, but it’s not litigation finance. That’s the critical difference,’ he said.

Calls for greater transparency 

The case against Gawker has sparked calls for greater transparency in litigation funding amid speculation that Thiel may have decided to back the litigation in part to seek revenge against Gawker for outing him as gay in 2007 and for publishing critical reports of his business dealings.

Additional Source: Bloomberg BigLaw Business