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Highlights from Brown Rudnick’s 2nd Annual European Litigation Funding Conference

March 21, 2023

Highlights from Brown Rudnick’s 2nd Annual European Litigation Funding Conference

Last week, Brown Rudnick hosted its second European Litigation Funding Conference, which brought together a crowd of international thought-leaders from across the industry, and provided attendees with an agenda filled with insightful discussions on a wide array of issues. The conference proved to be a beneficial experience for all, with Augusta Ventures co-founder Robert Hanna describing it as ‘the pre-eminent litigation funding conference in Europe, if not the world’. Following a successful inaugural showing in 2022, this year’s event reinforced the maturation of the litigation funding industry, with panelists keen to dive into the opportunities and challenges that funders, law firms and other industry participants are facing. In addition to the high-level topics that continue to shape the market such as ESG and collective action litigation, the conference featured panels on areas that are still maturing within the litigation funding space, including crypto litigation and opportunities for a secondary market. After an introduction from Brown Rudnick partner Elena Rey, the conference kicked off with a keynote address delivered by Anya Neistat, Legal Director of The Docket initiative at the Clooney Foundation for Justice. Having recently returned from conducting research and investigations in Ukraine, Neistat spoke of the importance of litigation which can help provide justice for victims of atrocities and war crimes. Highlighting the fact that survivors and NGOs often lack the means to take on complex litigation, Neistat emphasised that ‘litigation funding can be absolutely critical to allow survivors to get on the offensive.’ The first panel of the day featured a unique discussion of the emergence of crypto litigation, with the panelists discussing the primary challenge of accurately valuing this bespoke practice of litigation, as well as the underlying crypto-related assets. Moderating the panel, Stephen Palley of Brown Rudnick pointed out that despite the relatively new state of crypto litigation, he has found that courts are adapting well, and has ‘yet to find a judge who just says, “I don’t get it”’. Whilst members of the panel disagreed on whether all cryptocurrency is fundamentally ‘snake oil’, all agreed that valuation was the most important hurdle to overcome, with BDO’s Simon Greaves stating that a major issue is ‘how do you value it at the point of recovery’ when the worth of these assets can vary so wildly over time. James Collins KC of Essex Court encouraged industry participants to take a broad view of what crypto litigation might entail, suggesting that the future will see ‘claims in almost every area of law’. Steven Friel, CEO of Woodsford, kicked off the discussion by defining the current environment as one where ‘opportunities vastly outweigh challenges’ and praised the CAT’s willingness to ‘have an expansive definition of what is a competition claim’. Whilst the speakers expressed some concern about the ongoing Supreme Court appeal, which, as part of the defence strategy, is attempting to call into question certain aspects of the claimant’s funding agreement in the CAT – that strategy has failed at first instance and in the Court of Appeal. There is a high level of sophistication among the judiciary in this area and significant support for funding as a part of the landscape of collective actions in the UK. Without funding, good claims simply are not viable. After a short break, the next panel looked at the investor perspective on litigation funding as an asset class, with Chad Clamage of Victory Park beginning the discussion by reinforcing the central principal that litigation funding remains ‘attractive as an uncorrelated asset class’. Robert Hanna stated that ‘there has never been a better time to be a funder’ with demand at an all-time high, and that ‘in the current economic environment, liquidity is going to be king’, as a wider investor base for funding emerges. D.E. Shaw’s Sarah Johnson cautioned that duration still remains an obstacle for many investors, highlighting that durations that start to approach 7 to 10 years can block investment ‘even if all the other factors are there’. Nick Moore of AON put the spotlight on the increasingly beneficial relationship between funders and insurers, describing it as a situation where ‘two industries with a history of mutual cynical disregard, are now coming together’. The morning’s final session touched on the in-house perspective on litigation funding, with Suber Akther of Siemes Energy describing the difficulties faced by legal departments where they are ‘always under pressure’ to reduce costs and increase efficiency. Rocco Pirozzolo from Harbour Underwriting advised that whilst it may not always be viable for in-house teams, the best approach is for them to ‘look at the options out there, be open to it’. However, he also noted that work still needs to be done to counter the narrative that funders will control litigation, stating that ‘this myth has to be dispelled’. Andrew Jones of Fortress Investment Group reframed the issue at stake for in-house counsel, arguing that ‘a general counsel is an investor in litigation just like a funder, the only question is whose money you are going to use’. The hot topic of portfolio and law firm financing kicked off the afternoon’s agenda, with Burford Capital’s Leeor Cohen emphasising that one of the core fundamentals for this approach is that a ‘portfolio is not worth more than what is actually in the portfolio’. Looking at the factors that funders must consider in portfolio deals, Tom Steindler from Exton Advisers highlighted four key considerations: open versus closed portfolios, the identity of the borrower, what the capital will be used for, and the method of repayment of proceeds. The panel closed its discussion by looking at future trends with Cohen and North Wall Capital’s Alex Garnier agreeing that we may see the less-specialised and opportunistic financiers exit the market, whilst Chris Neill of Pogust Goodhead predicted more collaborative efforts in the industry. The penultimate panel for the day saw a fascinating discussion around collective redress in Europe, with panelists representing firms in France, Germany, the Netherlands and Spain. Emily Woolcott from Woodsford stated that ‘the Netherlands is the most attractive EU jurisdiction,’ which was widely echoed by the other panelists. Paul de Servigny from IVO Capital contrasted the French market’s unwelcoming environment for class actions with Spain, which stands out as a market ‘becoming an attractive location’. Discussion around the EU’s new collective redress directive featured interesting insights into the differing routes toward implementation in each country, with Tobias Glienke of Greenfort arguing that its introduction ‘could be a real gamechanger in Germany’, where the draft law looks to go beyond the directive by allowing small business participation and also include civil claims. The panel also discussed the crossover between the directive and the prominence of ESG litigation in Europe, with Frank Peters from Bureau Brandeis highlighting that environmental cases will be a major feature in the Netherlands, particularly around ‘polluter pays’ and greenwashing claims. To close out the day, the much-awaited panel on secondary market opportunities provided attendees with an overview of the state of that market, as well as the potential routes for growth in the future. Patrick Rode from Deminor differentiated between jurisdictions, and stated that where countries have a more mature primary litigation funding market, we are also seeing the development of a more ‘advanced secondary market’. Therium Capital Management’s Ben Smyth highlighted that the very concept of secondary deals still faces challenges, as there is ‘a lot of cynicism why the seller wants to get rid of the asset’. The issue of transparency was also one of the main challenges raised, as Ben Moss from Orchard Global asserted that for trust in sellers to exist, ‘the reasoning needs to be visible’. In looking to further develop the market, David Vanaskey from Wilmington Trust Company suggested that lessons can be learned from outside the industry and that there is a ‘need to use technology solutions that are utilised in other secondary markets’. Overall, Brown Rudnick’s second European Litigation Funding Conference once again demonstrated the breadth of experience in the industry and managed to deliver a full day of engaging content with speakers bringing current and relevant insights to each discussion. Attendees across the event remarked on the quality of panelists, which was facilitated by Brown Rudnick’s team of moderators who skillfully guided each discussion across interesting and impactful topics.

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Commercial Regulatory Issues

Congress Debates Litigation Funding Bill

By John Freund |

Republican lawmakers have renewed their push to rein in third-party litigation funding, with a House Judiciary Committee debate highlighting how politically charged the issue has become.

An article in The Daily Signal reports that members of the House Judiciary Committee clashed this week over legislation that would require disclosure of third-party litigation funding arrangements in federal courts. Supporters of the bill framed it as a transparency measure aimed at exposing the financial interests behind major lawsuits, while opponents warned that the proposal risks limiting access to justice and unfairly targeting a growing segment of the legal finance market.

During the committee debate, Republican lawmakers argued that outside investors are increasingly influencing litigation in ways that can distort outcomes and inflate settlement values. Several speakers characterized litigation funders as profit-driven actors operating in the shadows, asserting that judges and defendants deserve to know who stands to benefit financially from a case. Proponents also linked litigation funding to broader concerns about rising legal costs and what they describe as abusive litigation practices.

Democratic members pushed back, questioning whether the bill was designed to solve an actual problem or simply to deter plaintiffs from bringing legitimate claims. Critics of the proposal argued that disclosure requirements could chill funding for complex and expensive cases, particularly those involving individual plaintiffs or smaller businesses facing well-capitalized defendants. They also raised concerns about confidentiality and whether revealing funding arrangements could give defendants a tactical advantage.

The debate reflects a broader national conversation about the role of litigation finance in the civil justice system. While disclosure requirements have already been adopted in certain courts and jurisdictions, the proposed legislation would impose a uniform federal standard. Supporters say this consistency is overdue, while opponents argue it could undermine carefully negotiated funding structures that allow cases to proceed at all.

Commercial

APCIA Supports Federal Litigation Funding Disclosure Bill

By John Freund |

The insurance industry has intensified its campaign for greater scrutiny of third-party litigation funding, with one of its most influential trade groups backing new federal legislation aimed squarely at disclosure.

An article in Insurance Journal reports that the American Property Casualty Insurance Association has thrown its support behind a proposed federal bill that would require parties in civil litigation to disclose the existence of litigation funding agreements. The legislation, which is currently being considered by the House Judiciary Committee, would mandate that courts be informed when a third party has a financial stake in the outcome of a lawsuit. Proponents argue that this information is essential for judges to understand who stands behind a claim and whether outside financial interests may be influencing litigation strategy.

APCIA framed its endorsement around long-standing concerns about rising litigation costs and what insurers describe as “social inflation.” According to the group, undisclosed litigation funding arrangements can drive up claim severity, prolong disputes, and ultimately increase costs for insurers and policyholders alike. By requiring transparency, APCIA believes courts would be better positioned to manage conflicts of interest, assess discovery disputes, and evaluate settlement dynamics.

The association has been an active voice in the national debate over litigation finance for several years, often aligning with other insurance and business groups calling for disclosure regimes at both the state and federal level. APCIA leadership emphasized that the proposed legislation is not intended to ban or restrict litigation funding outright, but rather to ensure that judges and opposing parties have visibility into financial relationships that could bear on a case.

The bill would apply broadly in federal courts and could have significant implications for how funded cases are litigated, particularly in complex commercial disputes and class actions where third-party capital is more common. Insurers view federal action as a way to establish consistency across jurisdictions, rather than relying on a patchwork of state rules and local practices.

Commercial Regulatory Issues

Why Big Law Is Walking Away From Suits Against Governments

Elite global law firms are increasingly declining to pursue massive claims against sovereign states, even when potential recoveries run into the billions. The trend reflects a reassessment inside Big Law of the risk, cost, and strategic value of investor state and public law disputes that can take years to resolve and often carry significant political and reputational complications.

An article in Law.com International reports that top-tier firms which once dominated investor state arbitration and other government facing disputes are now far more selective about taking on such matters. Lawyers interviewed for the piece point to a combination of commercial pressure, client demands, and internal firm dynamics that make these cases less attractive than they once were. Although headline damages can be enormous, the cases typically require years of work, large multidisciplinary teams, and significant upfront investment with no guarantee of recovery.

Another key factor is reputational risk. Firms are increasingly cautious about being seen as adversaries of governments, particularly in sensitive jurisdictions or disputes involving public policy, natural resources, or infrastructure. Partners noted that political backlash, enforcement uncertainty, and the potential impact on other client relationships all weigh heavily when firms decide whether to proceed.

The article also highlights that many corporate clients are less willing to bankroll these disputes directly. Budget scrutiny has intensified, and companies facing disputes with states are often reluctant to commit tens of millions in legal fees over a long time horizon. This dynamic has contributed to a rise in alternative fee arrangements and third party litigation funding, though even those tools do not fully offset the burden for law firms carrying significant work in progress.

As a result, specialist boutiques and arbitration focused firms are increasingly stepping into the space once dominated by global giants. These smaller players often have lower overhead, deeper niche expertise, and a greater tolerance for the long timelines associated with sovereign disputes.