Legal Funding Journal is dedicated to informing and engaging the global legal funding community through daily news, insight, analysis and original content.

Whilst family law is not always an area of the legal system that is top of mind for litigation funders, the appetite for outside funding to support these disputes continues to be reinforced by specialised firms who are raising capital to grow their services.

In an announcement posted on FinTech Australia, JustFund announced a $92 million capital raise that will allow the family law funder to accelerate the growth of its services and expand operations. The capital raise includes $5.7 million in seed round financing led by Xilium Capital, a $75 million senior debt facility from Global Credit Investments (GCI), and another $11 million in mezzanine funding from family offices. The announcement also explained that the capital raise included investments from Startmate, The Legal Tech Fund (USA) and Tripple, among other startup investors.

JustFund was founded in 2022 by the trio of Andy O’Connor, Jack O’Donnell and Craig Carroll. O’Connor and O’Donnell both formerly practiced as lawyers, whilst Carroll brought his experience as a fintech entrepreneur and investor. According to the announcement, in the two years since its founding, the Sydney-based funder ‘has approved more than $95 million in legal funding to support its clients to access more than $1 billion in relationship property settlements.’

Commenting on the capital raise, Carroll explained that the additional funding “will enable JustFund to help thousands more Australians to achieve a fair and equitable distribution of relationship assets and to rebuild their lives following a divorce or separation.” Gavin Solsky, Co-founder of GCI Funds, stated that his firm is “pleased to be aligning with JustFund and supporting their mission to help Australians access legal representation during a challenging time in their lives.”

Investment treaty disputes between mining companies and nation states have continued to provide legal funders with opportunities to support valuable arbitration claims across the globe. This has once again been demonstrated by an announcement from one such company intending to pursue a dispute with Morocco, enlisting the services of a law firm with a track record of working with funders to support these claims.

An announcement from Emmerson plc reveals that the potash development company has notified the Moroccan government of its intent to pursue an investment dispute over the government’s alleged breaches of a bilateral investment treaty (BIT) between Morocco and the United Kingdom. The mining exploration and development company stated that it “has engaged Boies Schiller Flexner LLP as its litigation counsel and is examining various funding avenues for an investment dispute.” Emmerson’s announcement does not provide any significant details about the nature of the investment dispute but does refer to the development of the Khemisset Potash Project in Northern Morocco, which is likely where the dispute’s origins lie with this project. 

Emmerson stated that it had provided this notification to the Moroccan government so that the two parties could “engage in discussions regarding cash compensation for the damages incurred because of Morocco's breaches of the BIT, with a view to achieving an amicable resolution of the dispute.” However, Emmerson asserted that if these discussions cannot find a resolution, then the company “intends to submit a claim for arbitration under the BIT, seeking damages for the harm described above, plus interest, costs, and any such further relief as the Tribunal may deem appropriate in the circumstances.”

The announcement also references Boies Schiller Flexner’s involvement in two other investment treaty disputes: the GreenX Metals arbitration with Poland and the dispute between an Indiana Resources subsidiary and Tanzania. As LFJ has previously reported, both the GreenX Metals and Indiana Resources arbitration claims were funded by Litigation Capital Management (LCM).

In an announcement from the Civil Justice Council (CJC), the Litigation Funding Working Group has published the Interim Report and Consultation for its review of litigation funding. As laid out in the report’s foreword, the publication of the Interim Report represents the first phase of the working group’s efforts, and therefore does not contain any recommendations at this stage. The purpose of the Interim Report is to provide the background to the issues being examined, as well as providing the context for the questions in the Consultation.

The report itself is divided into six parts, which are as follows:

1. The Development of Third Party Litigation Funding in England and Wales
2. The Development of Self-Regulation of Third Party Litigation Funding
3. Different Approaches to Regulation
4. Approaches to Regulation in Other Jurisdictions
5. The Relationship between Costs and Funding
6. Funding Options

Each of these parts is further divided into two sections, with the first section acting as a brief overview of the topic that covers the ‘Key Points’. The second section provides an in-depth exploration of these issues, including examples of relevant case law and drawing upon existing research and studies covering third-party litigation funding.

The Consultation, which represents the second phase for the working group includes a list of 39 questions which consultees are encouraged to answer, divided into the following categories:

• Questions concerning ‘whether and how, and if required, by whom, third party funding should be regulated’ and the relationship between third party funding and litigation costs.
• Questions concerning ‘whether and, if so to what extent a funder’s return on any third party funding agreement should be subject to a cap.’
• Questions concerning how third party funding ‘should best be deployed relative to other sources of funding, including but not limited to: legal expenses insurance; and crowd funding.’
• Questions concerning the role that should be played by ‘rules of court, and the court itself . . . in controlling the conduct of litigation supported by third party funding or similar funding arrangements.’
• Questions concerning provision to protect claimants.
• Questions concerning the encouragement of litigation.
• General Issues

The consultation period is now open and will run for three months, closing on Friday 31 January 2025 at 23:59.

The publication of the Interim Report and Consultation is accompanied by the following statement from Sir Geoffrey Vos, Master of the Rolls, Head of Civil Justice and Chair of the CJC: 

“I welcome the publication of the CJC’s interim report and consultation on litigation funding. Litigation funding plays an important role in ensuring access to justice. I am grateful to co-chairs Dr John Sorabji and Mr Justice Simon Picken, and their working group for this report. I encourage all interested parties to read the report and respond to the consultation, which will run until Friday 31 January 2025. I look forward to the publication of the Working Group’s final report in summer 2025.

“It is a busy and exciting time for the CJC, which is also conducting a review of the Solicitors Act 1974, through a working group chaired by Mr Justice Adam Johnson. The CJC understands that there will be areas of overlap between the work of that group and the Litigation Funding Group. It will create valuable consistency and coherence for the Solicitors Act Working Group to be able to take account of the responses to this Consultation by the Litigation Funding Group as they take forward their work in the new year.” 

Following the conclusion of the consultation period, the third and final phase will begin, during which the Working Group will prepare and then submit its Final Report and Recommendations to the CJC. The Interim Report confirms that the current timeline still expects for the Final Report to be delivered and published by the summer of 2025.

The Interim Report’s appendices also include a full list of the members for both the Working Party and the wider Consultation Group, listed below.

Working Party

Mr Justice Simon Picken (CJC member) – Co-Chair, Dr John Sorabji (CJC member) – Co-Chair, Mrs Justice Sara Cockerill, Professor Christopher Hodges OBE (Regulatory Horizons Council), Lucy Castledine (Financial Conduct Authority), and Nicholas Bacon KC.

Wider Consultation Group

Alistair Kinley (Director of Policy & Government Affairs, Clyde & Co), Professor Andrew Higgins (CJC member; Professor of Civil Justice Systems, University of Oxford), Dr Mark Friston (Barrister, Hailsham Chambers; Bar Council Representative), Jackie Griffiths (Head of Regulatory Policy, Solicitors Regulation Authority), Jamie Molloy (Head of ATE, Ignite Speciality Risk), Jennifer Morrissey (Partner, Harcus Parker; Law Society Representative), Julian Chamberlayne (Partner, Stewarts) Kenny Henderson, (Legal Adviser, Fair Civil Justice; Partner, CMS Cameron McKenna Nabarro), Lucy Anderson (Senior Lawyer, The Consumers’ Association (Which?)), Neil Purslow (Chair of the Executive Committee, International Legal Finance Association; UK CIO, Therium Litigation Funding), Professor Neil Rickman (Professor of Economics, University of Surrey), Nicola Critchley (CJC member; Partner, DWF), Professor Rachael Mulheron KC (Hon) (Professor of Tort Law and Civil Justice, Queen Mary University of London), Rhea Gupta (Legal and Policy Research Consultant, Class Representatives Network), Stephen Wisking (Partner, Herbert Smith Freehills), Suganya Suriyakumaran (Legal Services Board), Susan Dunn (Director, Association of Litigation Funders; Head of Litigation Funding, Harbour Litigation Funding), Tajinder Bhamra (Interim Head of Civil Litigation Funding and Costs Policy, Ministry of Justice), and Tom Steindler (Managing Director, Exton Advisors).

The full Interim Report can be read here. 

Following the publication and adoption of the Voss Report by the European Parliament, industry participants and observers have been waiting to see how the European Union would potentially proceed towards a new legislative framework for regulating third-party funding.

An insights article from Deminor, authored by Patrick Rode and Joeri Kline, looks at the mapping study conducted by the European Commission on the state of third-party litigation funding across the EU. The article first provides an overview of the Commission’s study, in terms of the issues the study explored and its aims, before going on to offer some additional insights into Deminor’s contributions to the study and the funder’s view on the future of European funding regulations.

As Rode and Kline explain, the Commission’s study has a broad scope, exploring everything from the volume and types of cases that are being funded, to the nuances of funding arrangements and the returns on investments for funders. They also note that the study is taking into consideration the existing regulations covering funding within each EU member state, analysing the effectiveness of these rules and the parallel impact of funding. On this last point, it is clear the study wishes to explore both the perceived positive benefits of funding, such as widening access to justice, as well as the alleged negative impact of litigation costs.

Rode and Kline share that Deminor “has actively contributed to this debate by submitting its responses to the Commission”, providing information on its own funding engagements whilst also emphasising that its clients “are capable of negotiating and securing transparent and equitable funding agreements.” They go on to say that the funding agreements agreed between Deminor and its clients “ensure fair and market-aligned compensation for Deminor while addressing potential conflicts of interest in a manner that protects the interests of all parties involved.”

Deminor’s article concludes by stressing “the importance of maintaining a balanced approach to regulation – one that preserves the flexibility needed for sophisticated institutional investors while ensuring fairness and transparency for all parties engaged in litigation funding agreements.”

As the debate over disclosure and transparency requirements for litigation funding continue in different jurisdictions across the globe, one US advocacy organization has started a new campaign to act as a focal point for those in favour of introducing a federal disclosure rule.

An announcement from Lawyers for Civil Justice (LCJ) revealed that it has launched a new campaign focused on third-party litigation funding (TPLF) disclosure, called ‘Ask About TPLF’. The initiative calls on courts and parties involved in civil litigation to ask about the presence of any third-party funding in their cases, arguing that it is essential for everyone involved to be aware of potential conflicts of interest and to establish who is controlling the decision-making process in these lawsuits.

LCJ stated that the Ask About TPLF campaign has three objectives:

• Advocate for a clear, uniform rule requiring disclosure of TPLF.
• Encourage courts and parties to ask about TPLF in their civil cases.
• Build the case for a uniform rule by spotlighting the inconsistent – and in some cases inappropriate – responses by courts to motions seeking TPLF disclosure.

According to LCJ, the launch of the Ask About TPLF initiative follows the news that earlier this month, the U.S. Judicial Conference's Advisory Committee on Civil Rules agreed to begin a study into litigation finance, to ascertain whether a federal rule governing disclosure of third-party funding was necessary. LCJ also referenced the letter signed by over 100 companies that called for such a disclosure rule to be introduced in the Federal Rules of Civil Procedure (FRCP).

More information on Ask About TPLF can be found on the campaign’s website, as well as on X/Twitter and LinkedIn.