The financial demands of pursuing justice for sexual abuse survivors have led many law firms to seek external funding sources, especially as these complex cases continue to grow in number and scope.
The Capital Reality of Abuse Litigation
“Having adequate capital is essential to properly handle these cases – from covering litigation costs to managing depositions and other expenses,” explains Jessica Pride, a San Diego attorney whose firm secured a $116 million settlement against the Bureau of Prisons for sexual abuse by corrections officers in Dublin, California.
Large institutional sexual abuse cases have attracted significant funding because they follow similar patterns to mass tort litigation with substantial settlements. Recent examples include the Catholic Archdiocese of Los Angeles agreeing to an $880 million settlement, a New York diocese reaching a $320 million resolution, and the Boy Scouts of America’s landmark $2.46 billion settlement in 2022.
Funding Models and Financial Strategies
Law firms typically finance their work through high-interest loans based on case valuations or arrangements to share settlement proceeds with funders. Pride notes, “When people realized these cases were paying out, the field became crowded – suddenly everyone claimed to be a #MeToo lawyer.”
Several prominent firms handling abuse cases have secured external capital:
- Andrews & Thornton, representing thousands in the Boy Scouts litigation, partnered with funders Corbin Capital and Catalur Capital from 2020-2023
- Slater Slater & Schulman received loans specifically for cases against religious institutions
- Jeff Anderson and Associates has been funded since 2021 by Delaware LLC Kensal Green for cases against “the church” and Boy Scouts
Credit Lines vs. Case-Specific Funding
Some attorneys, like Pride, utilize credit lines rather than case-specific funding. She maintains a line of credit with Esquire Bank, which specializes in lending to plaintiffs’ firms with interest rates around 9%. This approach provides flexibility for clients who can’t cover litigation costs upfront.
“It’s relatively inexpensive financing,” Pride explains, noting that she can draw from her credit line for individual cases and repay when cases resolve.
The Unique Challenges of Abuse Cases
Unlike product liability or personal injury suits where funding often covers medical record processing, abuse cases require extensive time gathering testimony and documentation to substantiate claims.
“These cases are primarily time-intensive,” says Elise Sanguinetti of Arias Sanguinetti, who handles approximately 30 Boy Scouts cases along with suits against school districts, police departments, and hospitals. She views her Esquire credit line as business funding rather than litigation financing.
Adapting to Changing Conditions
The mass tort landscape is evolving, with cases taking longer to resolve and creating cash flow challenges as loans come due before settlements arrive.
Kayla Onder, who leads OnderLaw’s sexual abuse practice, observes, “Firms need to diversify their practice areas or risk drowning as these cases extend beyond expected timelines.”