Billionaire PayPal co-founder Peter Thiel has backed a start-up that uses Big Data to fund lawsuits.

The start-up, called Legalist, has developed an algorithm it says will allow a would-be litigant to learn if they are likely to win their case.

Legal records database

Founded by a pair of Harvard undergraduates, the start-up uses a vast database of local legal records to determine the likelihood of the case succeeding: and if the algorithm says the case can win, Legalist funds the suit in exchange for up to 50 per cent of the judgment.

Eva Shang co-founded the start-up with a $100,000 Thiel Foundation grant. She told the Silicon Valley Business Journal that Legalist was not interested in the kind of suit Thiel funded against Gawker through Hulk Hogan.

Small businesses

Ms Shang said the start-up focuses on small businesses tied up in costly litigation; the firm has accepted a single case so far.

Ms Shang said the start-up was funding “limited cases” at the moment and stressed what she said were the business’s philanthropic aims.

“I used to work for a public defender in DC,” she said. “We’re not funding criminal cases, nor would I be funding any suits against the media.”

“Litigation financing as a field is growing so fast,” Shang said, “but the one area it’s not actually getting to is small businesses.” – (Guardian)