Crowdfunding: Leveling the Playing Field - LawNow Magazine

Crowdfunding: Leveling the Playing Field

Crowdfunding-630x496Over the past three years, nearly 12 million Canadians will have experienced at least one legal problem. However, few Canadians have the resources to navigate the legal system to address their legal problems. Court and legal fees are major obstacles in the pursuit of justice.

JusticeFundr is the first crowdfunding platform designed to help Canadians get their day in court. The platform was established to help ameliorate the financial burden facing Canadian public interest litigants. The costs of bringing a lawsuit in the public interest can be even more daunting. Often, litigants face off against the vast resources of a government agency, multilateral organization or multinational corporation. Moreover, the nature of public interest lawsuits requires specialized investigations, research or evidence gathering techniques that cause public interest litigants to incur greater costs than would be the case in a typical lawsuit. The more novel the claim, the more expensive it will be.

Crowdfunding could be one part of the solution. Crowdfunding is the practice of funding a project or venture by raising numerous small amounts of money from a large number of people online. The practice is increasingly popular around the world and has led to the explosive growth of crowdfunding sites for various uses over the past few years.  These include GoFundMe and Fundrazr, both industry-leading crowdfunding platforms in the United States and Canada, respectively, and Mighty, LexShares and Invest4Justice, crowdfunding sites that offer investors a promising return in exchange for an investment in a legal claim.  Donation-based crowdfunding platforms have also emerged, including CrowdDefend in the United States, CrowdJustice in England and LawFunder in Australia, each of which facilitate the donation of funds towards public interest cases.

JusticeFundr is the first crowdfunding platform designed to help Canadians get their day in court. The platform was established to help ameliorate the financial burden facing Canadian public interest litigants.  Established as a non-profit, JusticeFundr provides a fundraising hub for litigants to build a donor community  to provide financial support for their legal matter by engaging Canadians from across the country.  This allows individuals and organizations to launch and sustain legal challenges.  Specialized crowdfunding platforms like JusticeFundr provide donors a recognizable space to fund the causes they are looking to support.

Potential users should also make sure that some steps are taken to verify that campaigns posted on each crowdfunding site are for legitimate legal disputes.Before diving into crowdfunding, potential litigants and donors should carefully review the fee structure of each crowdfunding site to ensure that the platform and processing fees are nominal: the vast majority of funds donated should go towards the supported cause.  Potential users should also make sure that some steps are taken to verify that campaigns posted on each crowdfunding site are for legitimate legal disputes.  For example, before JusticeFundr approves a campaign, we require that the campaign submit proof that the action has begun, a lawyer or law firm has been retained or that other major steps have been taken to further the claim.  Prospective users should also consider the legal claim itself; crowdfunding generally works best where a matter has an existing base of support to draw from or is sufficiently newsworthy to generate outside interest.

Crowdfunding is not the only, nor necessarily a major solution to the access to justice crisis confronting public interest litigants in Canada. However, it is a technique that can be used to overcome costs associated with litigation; the most significant barrier in most cases. However, public interest litigants must do their research before engaging in any sort of crowdfunding campaigning, as there are options out there and they are not equal.

Authors:

Avnish Nanda
Avnish Nanda is a lawyer with Nanda and Company in Edmonton, Alberta.
 


A Publication of CPLEA