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$2.47 Billion of Capital Deployed Last Year Across U.S. Commercial Litigation Finance Industry, As Growing Sector Weathers Pandemic Storm

The number of litigation finance providers in the United States, their assets under management (AUM), and the dollars they committed to new financing deals, all grew over the last year, according to a new report from litigation finance advisory firm, Westfleet Advisors. According to The Westfleet Insider: 2020 Litigation Finance Market Report, between June 2019 and June 2020, 46 active funders managed a combined $11.3 billion in assets allocated to US commercial litigation investments, an 18% increase from the previous year. Despite the onset of a global pandemic and resulting disruption to the justice system, the total dollars committed to new investments by funders also grew by 6% – to $2.47 billion.

For the second year, Westfleet analyzed data collected directly from litigation funders to calculate the size of the U.S. litigation finance market. The most complete and revealing picture ever painted of the sector, The Westfleet Insider features data and commentary on the size, scope and focus of U.S. commercial litigation finance. This year’s report builds on the 2019 edition by adding historical context and new metrics that contribute additional depth to the overall market analysis.

“One of our core beliefs is that reasonable industry transparency serves to educate the public and increase comfort with, and ultimately utilization of, litigation finance,” said Charles Agee, founder of Westfleet Advisors. “Because of the aberrational nature of 2020, we are wary of drawing sweeping conclusions about the trajectory of the market, however, it is quite clear that investors continue to be drawn to the sector, attracted by equity-like, non-correlated returns.”

It remains to be seen whether the pandemic and the dramatic slowing of the U.S. economy that followed will be an intermediate-term boon to the litigation finance industry. As highlighted in this year’s report, the disruptions in global business operations likely created a lag in litigation funders’ investment processes that caused deals to extend just outside Westfleet’s data collection period. Regardless, the report’s findings make clear that those who predicted a massive growth year for the litigation finance sector may have underestimated the impact COVID-19 would have on the efficient operation of the nation’s litigation infrastructure.

“Time—and hopefully a rapidly-approaching return to normalcy—will tell what the litigation finance industry’s precise trajectory is,” Agee added. “The challenges of the last year have brought into sharp focus the myriad inefficiencies and opportunities to improve, across the sector, which should drive growth and innovation for a long time to come.”

Additional significant findings from the 2020 edition of the Westfleet Insider include:

  • The average size of the transactions Westfleet Advisors analyzed was $7.8 million. Single matter deals averaged $4.5 million, while portfolio transactions averaged $12.8 million.
  • The distribution of deals between law firms and corporations remained relatively constant from 2019 to 2020.
  • Litigation funding commitments to AmLaw200 firms remained consistent year-over-year, falling slightly from 30% to 28%.
  • Eighteen percent of all capital deployed last year was for patent litigation matters, and 80% of client-directed portfolio transactions involved patent infringement litigation.

About Westfleet Advisors

Westfleet Advisors is the leading litigation finance advisor in the United States. It was founded in 2013 to bring greater transparency and efficiency to the litigation finance market by equipping users of litigation financing with expertise and resources. Our core mission is to ensure claim holders and lawyers have all the information they need to be successful with litigation financing. Our senior leadership has been active in the litigation finance industry since 1998.

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Pegasus Legal Capital Completes $74 Million Securitization to Fuel Growth

Pegasus Legal Capital, LLC ("Pegasus") (mylawfunds.com), a prominent pre-settlement legal funding company in the United States, announced today that it has successfully completed a $74 million litigation finance securitization. This achievement marks Pegasus' second securitization transaction in the asset class and another significant milestone in its capital market journey. The proceeds from this transaction will further propel Pegasus' growth across key markets in the United States.

Pegasus Managing Director, Alexander Khanas, expressed, "With the successful completion of this transaction, Pegasus will expand its business in the personal injury market while upholding its industry-leading service standards."

GreensLedge Capital Markets LLC played the role of Placement Agent for Pegasus. GreensLedge Senior Managing Director, Douglas Lipton, added, "We are delighted to continue expanding Pegasus' investor base through their second securitization issuance and assisting them in creatively developing their platform."

Headquartered in Deerfield Beach, Florida, Pegasus was founded in 2008 as a pre-settlement litigation finance company. Since its inception, the company's management team has successfully sourced, underwritten, and serviced over half a billion dollars through more than 30,000 advances. While Pegasus has traditionally focused on the New York market, it has established a strong presence in the Southeast and Texas markets as well.

Pegasus is a proud member of the American Legal Finance Association (ALFA), a national organization comprising companies that provide non-recourse funds to personal injury victims. ALFA's primary objective is to establish industry standards for transparency in legal funding transactions, ensuring upfront and clear disclosure to consumers.

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New Burford Capital Research Reveals How Businesses are Preparing for Likely Rise in Global Energy Transition Disputes

By Harry Moran |

Burford Capital, the leading global finance and asset management firm focused on law, today releases new research entitled “Energy transition disputes: GCs and senior lawyers on the business impacts of legal challenges to come,” which demonstrates how businesses are preparing for a likely rise in legal disputes related to the global energy transition. This transition―or the shift to renewable sources of energy―is likely to cause an increase in expensive commercial disputes.

Businesses are investing significant sums in this transition, and corporate commitments highlight the scale of economic engagement as they invest in the new technologies, infrastructure and other resources that will be needed. But multifaceted legal and commercial pressures present businesses with a myriad of potential challenges including contractual disagreements, regulatory compliance issues and the need for intellectual property enforcement or litigation. Burford’s research report aims to offer a unique perspective on how corporations foresee the expected rise in litigation and arbitration related to this energy transition, examining the areas of business impact related to this evolving landscape.

Burford commissioned this independent research by capturing insights from 300 GCs and heads of litigation across key industries impacted by the energy transition and spanning North America, Europe, Asia and Australia.

Key findings from the study include:

Disputes relating to the energy transition are rising

·       76% of GCs report they are already encountering disputes related to the energy transition and nearly half (47%) expect a further rise in the volume of such disputes in the next decade, driven by evolving laws, new technologies and infrastructure requirements.

Disputes relating to the energy transition are expected to be costly

·       Almost two in three GCs (63%) expect legal fees and expenses to exceed $4 million per energy transition case; a notable minority (29%) expect per case costs to exceed $10 million.

·       Over half (52%) view high costs as a significant factor in deciding not to pursue disputes.

·       Half (50%) of GCs agree that the energy transition will create the need for additional capital sources for the business.

Expected disputes span all types of business conflict

·       GCs are most likely to predict (77%) that the energy transition will result in more contractual disputes and commercial arbitration.

·       Joint ventures are expected to be particularly prone to disputes over profit allocation (76%) and intellectual property rights (65%).

·       Over half of GCs (57%) also expect their businesses to face arbitrations to resolve investor-state conflicts relating to the transition.

New tools are needed to manage the rising dispute costs

·       Legal finance is increasingly used to mitigate the financial burden of these disputes; three in four (75%) GCs have used or would consider using legal finance to offset the cost of disputes relating to this transition.

·       In particular, GCs value monetization―or advancing some of the expected entitlement of a pending claim, judgment or award― to generate liquidity from claims tied up in litigation and arbitration. With legal finance, companies can also offset the cost of pursuing affirmative litigation to generate liquidity, shifting legal departments from cost centers to value drivers.

Christopher Bogart, CEO of Burford Capital, said: “Businesses face significant challenges related to the global energy transition due to cross-border projects, differing legal frameworks and rapidly evolving policies. Additionally, long-term energy contracts may not keep pace with energy markets and technologies, resulting in conflicts among stakeholders. Burford’s latest research demonstrates the value of corporate finance for law, as legal finance helps companies manage the high costs of energy transition disputes and allows them to pursue meritorious claims without depleting resources.”

Burford’s research is based on a 2024 survey conducted by GLG and is supplemented by interviews with ten global energy transition experts conducted by Ari Kaplan Advisors.

The research report can be downloaded on Burford’s website.

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Hannah Sadler Joins GLS Capital Patent Investment Team

By Harry Moran |

Hannah Sadler has joined the firm as a vice president and member of the patent investment team.

“We are very happy to welcome Hannah to GLS Capital as a vice president and member of our team focusing on patent investments,” said Adam Gill, a GLS Capital managing director, co-founder, and leader of the firm’s patent-related investing. “Attracting top-tier talent is essential for continuing to help our clients achieve success, and Hannah’s background in patent litigation will be invaluable for navigating the complexities of patent investments and helping to drive our mission forward.”

Sadler focuses on diligence around qualified underwriting opportunities and monitoring and managing the firm’s patent litigation investments.

Before joining GLS Capital, Sadler was a patent litigator at Global IP Law Group in Chicago. She has over a decade of experience with all aspects of patent portfolio management and enforcement, including prosecution, litigation, sales, licensing, and portfolio valuation.

Sadler earned her J.D. (cum laude) from DePaul University College of Law and her Bachelor of Arts from the University of San Diego.

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