Third Party Funding of Litigation: Hulk Hogan Edition

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“I love my grudges. I tend to them like little pets.” – Big Little Lies 

Funding your lawsuit just got easier. People can now start online campaigns to raise money. Including signing up for Kickstarter, Gofundme, IndieGoGo, and so on.

However, the most interesting source of funding is Peter Thiel. The co-founder of PayPal. In the case of Hulk Hogan versus Gawker, Peter Thiel allegedly funded Hogan’s lawsuit against the media company Gawker. This lawsuit dealt with the publication of Hogan’s sex tape.

Peter Thiel allegedly funded the lawsuit as part of a personal vendetta against the media company Gawker. A vendetta that allegedly started almost ten years earlier, when the company outed him as gay.

As a result of this vendetta, Hogan’s lawyers were allegedly instructed to draft the pleadings in a particular way. Particularly to avoid triggering Gawker’s insurance. Forcing Gawker to fund their own defence and to pay for any judgment against it out of its own pockets.

This tactical manoeuvre was only possible because of Peter Thiel. Had Hogan been required to pay for the lawsuit himself, he probably would have intentionally triggered the insurance coverage for Gawker. And he would have settled the case with the insurer. In order to avoid incurring more legal fees and to guarantee that he would recover some money.

However, by cutting out the insurer,  Thiel could ensure that any judgment against Gawker would be paid personally by the company. Allowing him to bankrupt Gawker. Which he ultimately did when Hogan was awarded around $140 million in court.

As they say, “revenge is a dish best served cold”.

(Views are my own and do NOT represent the views of any organization.)

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