NEW YORK (February 2, 2022) – In what may be the first social justice initiative of its kind, Validity Finance has launched a new, non-profit litigation finance program for individuals exonerated of serious crimes while they pursue civil claims for wrongful convictions. Validity has agreed to provide funding to two exonerees to date, and hopes to assist more wrongfully convicted individuals in coming years. The exonerees that receive Validity’s funding – which provides much-needed financial support – have no obligation to repay the financing if they fail to recover on their claims.
Validity’s Exoneree Program will provide up to $100,000 to individuals with proven innocence claims who have served at least five years in prison and are currently in civil litigation seeking compensation from the city, county or state that wrongfully prosecuted and incarcerated them. The funding – which Validity expects to average around $75,000 – provides vital assistance to exonerees with living expenses while they await a judgment or settlement of their civil proceedings.
In addition to being non-recourse, the funding is non-profit: if the exonerees’ claims are successful, they need only pay the funding back to Validity at its cost of capital. In this way, the program provides a more just alternative than traditional sources of lending or litigation funding that typically seek multiples (2x, 3x) on investments. As people of color are disproportionately impacted by miscarriages of criminal justice, Validity believes its program represents a new form of ESG investing in the litigation finance sector.
The program was first tested by Validity through its funding of Chicago resident Charles Johnson, who was convicted with three other men in 1995 for participating in a double-murder and robbery at a used-car dealership. Mr. Johnson served 20 years of a mandatory life sentence. He was exonerated with the help of Northwestern University’s Center on Wrongful Conviction and litigation powerhouse law firm Kirkland & Ellis, which provided immense resources on a pro bono basis.
Mr. Johnson’s legal team recognized early on that his conviction was based on a troubling lack of physical or forensic evidence linking him to the murders. Through their persistent work – Kirkland alone devoted more than 3,300 pro bono hours to his case over nearly a decade – the team uncovered forensic evidence and new witnesses pointing to different suspects who had motives for the killings. Following several post-conviction petitions and a new trial, Cook County vacated the convictions of Mr. Johnson and his co-defendants. Mr. Johnson was released from prison in September 2016 with a certificate of innocence, and is now working in an administrative role at Kirkland.
Mr. Johnson is pursuing claims for wrongful imprisonment against several police officers, Illinois state prosecutors and the City of Chicago. He is represented by the MacArthur Justice Center and law firm Loevy & Loevy. Validity’s Exoneree Program is assisting with his expenses during the pendency of his civil case.
“I lost two decades of my life from a baseless prosecution that led to my wrongful imprisonment. I am hugely grateful to those who worked tirelessly to vacate my conviction, and now to Validity Finance for helping me support my family while my claims are pending,” Mr. Johnson said. “I am honored to be the first recipient of Validity’s new program, and hope it can help many others find their way back from a justice system that failed them.”
Mr. Johnson’s counsel, Locke E. Bowman at the MacArthur Justice Center, agrees: “The process of redress for wrongfully incarcerated individuals exists but is protracted. Validity’s funding provides a much-needed lifeline for Mr. Johnson and others like him without taking further advantage of them in the form of onerous litigation funding terms.”
In addition to Mr. Johnson, Validity has funded a second exoneree who spent decades in prison for a robbery and murder conviction based upon a co-defendant’s coerced confession.
Validity has a short list of conditions for its Exoneree Program, including:
- Individuals have been incarcerated longer than five years
- Lawyers representing claimants have a proven track record of success
- A financial advisor creates an expense budget for the duration of the litigation
- The relevant city, state or county indemnifies employees for at least $5 million
Validity’s Exoneree Program is advised by former US District Judge John Gleeson, who also sits on Validity’s investment committee.
Judge Gleeson, now a litigation partner at Debevoise & Plimpton, co-chairs the firm’s pro bono committee. He also founded the firm’s Holloway Project, a successful firm-wide pro bono effort to reduce excessively long prison sentences. To date, the Holloway Project has obtained sentence reductions for 32 clients. The average reduction is more than 34 years; the project has reduced the sentences of its clients by a total of more than 1,100 years.
“The time for litigation finance companies to give back is now. At Validity, we took our usual non-recourse investment tools and created a new mechanism to avoid predatory investing for exonerees. We believe this is an innovative way to help level the playing field in the area of criminal justice, rather than in our usual commercial sphere,” said Validity Finance CEO, Ralph Sutton.
“There is a large population of men and women — especially of color — who’ve been victims of wrongful prosecution. Many have been exonerated through the work of dedicated advocacy groups and major law firms devoting substantial pro bono resources to secure their clients’ release,” Mr. Sutton added. “As these individuals pursue just compensation for decades of lost lives, our Exoneree Program can help them restart their financial lives, even if they’re able to find employment.”
Ronit Cohen, Portfolio Counsel at Validity who has overseen the Program’s first fundings, explains: “One of commercial litigation funding’s goals has always been to help deserving plaintiffs survive a lengthy legal process – empowering them to use the justice system as it was intended. The Exoneree Program does the same for those the criminal justice system has failed, but on a non-profit basis.”
With its Exoneree Program, Validity adds to its own ESG credentials. In 2019, the firm introduced an Equal Access Fellowship, providing paid summer intern positions for first-year law students of diverse backgrounds. The fellows split their summer between Validity and a pro bono/social advocacy organization of their choice.
Validity is a leading commercial legal finance company that provides non-recourse investments for a wide variety of commercial disputes. Validity’s mission is to make a meaningful difference in our clients’ experience of the legal system. We focus on fairness, innovation and clarity. For more, visit www.validityfinance.com.