Per the NYT of May 23, 2016: “There is an entire industry that exists to provide lines of credit to lawyers working on contingency. There is also a small netherworld of investors who back certain lawsuits.” This may be acceptable in U.S. courts (as it may be in other jurisdictions’ courts like Australia). Financing is not consistently and uniformly transparent within and across jurisdictions (e.g., the Panama Papers scandal). The risk of undisclosed side-agreements, undisclosed principals and beneficiaries, etc. makes informed and intelligent judgment especially difficult for the outsider that needs to rely on searching and researching the public domain for indications of undisclosed and improperly assessed bias.
The definitions of insider and outsider are comparative. There are core insiders (e.g., beneficial owners and board chairpersons), and there are others that are more inside than other groups. For instance, many members of senior management would likely be more inside than lower level managers, who in turn would be more inside than rank-and-file employees (this is a general and not absolute rule, especially where operating divisions control information reported upstream). These concentric circles depicting comparative status and possession of key information are dizzying.
Auditors and other external assessors may be more or less dependent on core insiders (e.g., Marine Corps audit). This raises the question of the usefulness of the attribute of “independence” that is often ascribed to one organization or another (e.g., credit rating agencies) in support of the credibility of its expert opinion. Legal independence (i.e., so-called independent contractors, including management consultants) is dwarfed by real impartiality (i.e., so-called objectivity). Frankly, money talks, as well as the potential for increased (revenue) opportunity from meeting expectations of core insiders, which makes identification of the core insiders so important.
Until transparency gets deeper than identification of corporate bodies and shell companies, information cannot be fully assessed. Contrary to those believing that we live in the age of information, we more frequently live in the fog of data and scarcity of evidence.