A new investment vehicle: the outcomes of other people's law suits

Read Benyamin's Appelbaum's New York Times story here. The lede follows:

Large banks, hedge funds and private investors hungry for new and lucrative opportunities are bankrolling other people’s lawsuits, pumping hundreds of millions of dollars into medical malpractice claims, divorce battles and class actions against corporations — all in the hope of sharing in the potential winnings.

Appelbaum reports that the amount invested in lawsuits at any given time now exceeds $1 billion. He provides this example of how the investment works--which is primarily through the lawyer, for example, permitting the attorney to hire necessary experts to take a case forward.

Ardec Funding, a New York lender backed by a hedge fund, lent $45,000 in June to a Manhattan lawyer hired by the parents of a baby brain-damaged at birth. The lawyer hired two doctors, a physical therapist and an economist to testify at a July trial. The jury ordered the delivering doctor and hospital to pay the baby $510,000. Ardec is collecting interest at an annual rate of 24 percent, or $900 a month, until the award is paid.

Now there's an interest rate!