For the past few decades, state and local governments throughout the U.S. have paid out a total of $2.9 billion to Americans who were wrongly convicted of crimes.
Media attention on these big payouts and improvements in DNA technology have attracted investors and companies offering cash advances to exonerees with the hope of substantial payback — that is, if they win their case.
“It’s a pain that no one would want to go through in advance and say, hey, I’ll give you $10 million if you go do 20 years in prison. No one would take that bet,” said Marvin Cotton, who was exonerated from his 20-year sentence in October 2020. He is currently in litigation hoping to ‘right the wrong’ of his wrongful conviction.
Since 1989, The National Registry of Exoneration has found that there have been 2,795 exonerations in the U.S. Collectively, over 25,000 years have been lost behind bars to the wrongfully convicted, according to recent estimates.
Thirty-eight states, the federal government and the District of Columbia all offer exonerees some form of wrongful-conviction compensation. These amounts are typically capped per year served. To get a higher payout usually requires a lawsuit against the government, which can be lengthy and costly.
There’s also a costly risk to firms who offer advances for these cases. “There’s no credit checks, there’s no collaterals, there’s no guarantees, there’s no assets,” said Abraham Arouesty, of Tribeca Capital Group, a litigation firm that offers funding for wrongful-conviction cases. “The only way that we can collect our investment is if the claim actually succeeds.”
Proving one’s innocence in civil court isn’t a simple or fast process. Private firms can be an attractive lifeline for many exonerees, especially due to the heightened financial burden a legal battle with the government can amount to.
“What we’ve seen in the connection with litigation loans are a number of problems,” said Jon Eldan, founder of After Innocence, an organization that helps those wrongfully convicted with post-release assistance. “There are companies that are a little too aggressive with clients. There are companies that don’t offer what is the market rate for this kind of loan”.
Watch the video above to find out more about why investors are betting on wrongful-conviction lawsuits
