He prefers the German system, under which lawyers are paid a fixed litigation fee.

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The number of legal actions against doctors has soared since the law was changed to allow no-win no-fee and the medical litigation industry has boomed.

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Thus, tax litigation can be handled for a contingent fee.

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The bottom line is that the contingency fee system already solves the one problem litigation financing addresses, and does so in a manner that avoids the worst excesses.

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The trick is lining up lead plaintiffs who lost enough in the crash to seize control of the litigation, at which point a settlement and lucrative fee is all but certain.

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But sophisticated corporate clients usually negotiate a sliding fee based on the risks of the litigation as it progresses, and often include features such as mechanisms for the client and the firm to share any savings from projected costs.

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Trolls capture economies of scale in litigation, and lower their committed capital by using contingent fee lawyers.

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It would be based on a 1995 decision by the ever-loopy Ninth Circuit in California that reversed a Tax Court decision and found that lawyers could write off the costs of litigation in the year they were incurred, instead of when they actually get a fee.

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The American Bar Association considers these contingency-fee arrangements loans, since it prohibits lawyers from extending financial aid to clients (that might encourage frivolous litigation, apparently).

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