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the parents of a baby brain-damaged at birth so that medical and other experts could be hired to testify at the trial (the suit was successful). Lawsuits brought by Ground Zero workers were financed indirectly by Citigroup Inc. Niches have developed within U.S. litigation lending. One is divorce financing. In Los Angeles, a company called Balance Point Divorce Funding helps women who have no jobs, are raising small children, and have wealthy husbands who are self-employed mak- ing financial information hard to come by. Balance Point takes a percentage of "winnings." It is unclear what happens if there aren't any winnings. Appelbaum writes that this kind of lending "is helping to ensure that cases are decided by merit rather than resources." That is not to say there is no risk of abuse. Loans for litigation carry high interest rates, and sometimes the costs exceed the benefits of winning. There may be financial pressure to resolve cases quickly. And, it is occa- sionally argued, investors may think it's in their interests to whip up lawsuits with little merit (although I don't see why investors would fund litigation unlikely to succeed). There's equity investing as well. A close relation of champerty is the buying of valid claims where recov- ery is uncertain. In the Bernie Madoff bankruptcy, traders have been buy- ing claims against the estate approved by the bankruptcy trustee. Many of Madoff 's victims are only too happy to sell their claims for 20 or 30 cents on the dollar. They get cash now, instead of hanging on for an uncertain recovery somewhere off in the future. They walk away happy (relatively speaking). There's nothing new, of course, about traders purchasing so-called "distressed securities" including bankruptcy claims at a big discount from face value. This happens in just about every large bank- ruptcy. Some hedge funds have decided not to trade in Madoff claims. The New York Times quoted one fund executive as saying, "The fraud is just so despica- ble that we felt that, from a moral per- spective, it just didn't make sense for us. Perfectbound with CD-ROM 336 pp. • 2009 • $94 P/C 0860010002 ISBN 978-0-88804-489-1 Prices subject to change without notice, to applicable taxes and shipping & handling. There are plenty of other ways to make money in this business." ("Speculators are eager to bet on Madoff claims," Dec. 14, 2010.) I don't understand why those with claims against the Madoff estate should be denied this kind of recov- ery just because they are victims of a particularly horrible fraud — quite the reverse should be the case. Over 10 years ago, professor Poonam Puri of Osgoode Hall Law School argued persuasively for abolishing the prohibition of champerty and mainte- nance (see Osgoode Hall Law Journal, vol. 36). She wrote, "the financing of lawsuits by third-party investors will increase access to the civil justice sys- tem for individuals who have meritori- ous claims but who lack the financial resources to pursue them." Another effect of investor financing, Puri point- ed out, would be to deter potential wrongdoers from violating the law because of the greater likelihood that they will be sued. These are obviously highly desirable consequences. Puri recommended abolishing the prohibition against champerty and maintenance over a decade ago, but, as so often happens with arcane and com- plex issues, politicians were not inter- ested. And so, partly in the name of a misguided and sloppy ethic (champerty is bad), we are still stuck with an archa- ic doctrine that frustrates desirable public policy. Prohibition of champerty denies access to justice to those who could otherwise have it. Would-be liti- gation financiers, with considerable difficulty, try and define what they do as something other than champerty. Third-party litigation financing is strangled at birth. The sooner all this changes, the better for everyone. Philip Slayton has been dean of a law school and senior partner of a major Canadian law firm. His latest book, Mighty Judgment: How the Supreme Court of Canada Runs Your Life, will be released in April 2011. Visit him online at philipslayton.com. SHAREHOLDERS AGREEMENTS AN ANNOTATED GUIDE, SECOND EDITION Aird & Berlis LLP Edited by Lisa E. Moreau YOUR ULTIMATE GUIDE THROUGH THE RIGOURS OF DRAFTING SOLID SHAREHOLDERS AGREEMENTS The challenge in preparing a shareholders agreement is ensuring it meets the needs and intentions of clients. Guarantee that you've addressed the complex issues and considered all the circumstances which may arise and their impact with Shareholders Agreements: An Annotated Guide, Second Edition. This edition has been updated and revised to include: • amendments to the Income Tax Act and regulations • discussion of the recent Ontario Court of Appeal judgment in Frye v. Frye Estate • amendments to the Ontario Business Corporations Act and the Canada Business Corporations Act • changes in general drafting principles Visit canadalawbook.ca or call 1.800.565.6967 for a 30-day no-risk evaluation CANADA LAW BOOK® CL0211 www.CANADIAN Lawyermag.com FEBRUA R Y 2011 17