Recently in Indiana, insurance company State Farm was found liable for a $14.5 million judgment in a defamation lawsuit. The case stemmed from State Farm’s handling of hail damage claims in Indiana, which led to it being fined by the Indiana Department of Insurance. Moreover, State Farm failed to provide complete information to the government about one of its contractors, which caused the contractor to be arrested and charged with 14 felonies for insurance fraud. The contractor was able to show that State Farm erred and that, by virtue of its actions, State Farm defamed the contractor.
What is interesting about this case is the fact that the contractor’s claim against State Farm was funded by Bentham IMF, an international commercial litigation finance company. Bentham makes money by investing in lawsuits in hopes that a sizable judgment will be returned. While some argue that it is a way of leveling the playing field, others see it as a way of tilting the playing field against middle market companies.