It used to be that only lawyers could get their hands on what can often be obscenely lucrative rewards for putting their dukes up for plaintiffs fighting giant corporations. Litigation investors were born when it became obvious that Plaintiffs lawyers could not stick it out for years on end alone, with no guarantee of reward. These mega investors were known for taking a sizable chunk of the award for their risk, leaving little for Plaintiffs. But hedge funds have now discovered a much better way to keep their hands in the pot, while risking nothing at all.  By tapping into the brand new world of crowd funding, a new breed of vultures is born. Hedge funds can do what they do best – speculate, and if it doesn’t work out? No problem. Someone else takes the fall. Meanwhile, with each new layer of takers, Plaintiffs’ share has gotten even smaller:

Today litigation finance moved in a new direction with the launch of LexShares, a crowdsourcing website backed by Atlas Ventures.

Marketed as a populist courtroom ally, LexShares will “provide plaintiffs with equal access to justice and investors with access to a new asset class that is not correlated with broader capital markets,” according to Jay Greenberg, co-founder and chief executive. Note, however, that what sounds like a splendid win-win proposition, sweetened by social-media pixie dust, will not deliver happy news for everyone. Litigation finance inevitably encourages more lawsuits, presumably with deep-pocketed corporations as the targets. And turning litigation into a vehicle for third-party speculation—er, I mean, investment—raises potentially sticky questions about potential conflicts between clients’ interests and those of outside funders looking to maximize returns.

To illustrate that last cautionary point, consider one well-documented episode of litigation finance: the funding of a multibillion-dollar lawsuit against Chevron(CVX) over oil pollution in Ecuador. The plaintiffs’ lawyer in that case, Steven Donziger, sustained a two-decade legal campaign, in part, by accepting investments totaling close to $30 million from hedge funds and individuals. In 2011, Donziger and his clients—thousands of rain forest residents—won a $19 billion judgment against Chevron in a provincial court in Ecuador. The verdict was upheld on appeal, although the damages amount was halved.

Refusing to pay in Ecuador, where it lacks assets, Chevron countersued Donziger in New York. In March, a federal judge ruled that Donziger’s lawsuit had evolved into an extortion plot featuring bribery, coercion, and fabricated evidence. Donziger denies wrongdoing, is appealing the verdict against him, and, meanwhile, is trying to enforce the multibillion-dollar Ecuadorian judgment in Canada, Argentina, and Brazil.

If Donziger one day forces Chevron to pay full value—something the company vows he’ll never do—he and his funders will all be rewarded richly, with billions left over to clean up the jungle. If, in contrast, Donziger’s financiers push for a return on their investment via an out-of-court settlement, the results could be deeply troubling. If Chevron settled for $100 million, for example, Donziger’s financiers would get paid $69 million off the top—a healthy profit exceeding 100 percent, according to a forensic analysis done at the oil company’s behest by the accounting firm KPMG. Attorneys and other advisers, including Donziger, would share $22 million. Administrative expenses would consume $8 million. That would leave $1.5 million for rain forest reparations.

Wow, $1.5 million out of a $19 BILLION dollar reward. That’s pretty amazing – for middlemen with money – and pretty disastrous for the rule of law.