Trending Now
  • Joint Liability Proposals Threaten Consumer Legal Funding
Commercial Special Features

LFJ Member Leverages Informal Introductory Services to Finance ESG Claim

August 17, 2023

LFJ Member Leverages Informal Introductory Services to Finance ESG Claim

Litigation Finance Journal is well-regarded as the leading publication covering the global legal funding sector, but what is perhaps less-well known is that LFJ also serves as a digital hub for industry stakeholders to connect, via our informal introductory services. A recent example illustrates the impact that LFJs access to the global funding community can have, as Brazilian attorney and activist Daniel Cavalcante leveraged our introductory services to raise funding for a claim on behalf of Indigenous communities in the Amazon.  In a post by No Impunity on LinkedIn, the impact litigation funding platform announced that it would be collaborating with Daniel Cavalcante, a lawyer who has been fighting for the rights of indigenous communities in the Brazilian Amazon. No Impunity stated that it would be funding a lawsuit “that directly benefits indigenous communities, taking real steps towards justice”, highlighting the synergy between Cavalcante’s goals and their mission to finance litigation that fights back against climate and human rights abuses by corporations. Yanis Lunetta, Co-Founder and Co-CEO of No Impunity, praised LFJ’s global network of litigation funding stakeholders: “Through LFJ’s network, No Impunity was introduced to Daniel Cavalcante. This connection proved transformative, enabling grassroots fundraising for an ESG claim. Daniel’s commitment, backed by No Impunity and combined with the trust LFJ instilled, illustrates a dynamic synergy in financing legal action to achieve corporate accountability.” Aurelia Le Frapper, Co-Founder and Co-CEO of No Impunity, added: “Litigation Finance Journal played a key role in our mission to democratize impact litigation. They had an essential part in connecting us directly with Daniel Calvalcante, representing Brazilian communities facing substantial socio-environmental harms.This connection paved the way for No Impunity to fund the investigation phase of this legal process. As we prepare for our public launch event at UCL on 25 September to present our platform and start fundraising for this first case, we express our gratitude to LFJ for its essential contribution in advancing impactful legal initiatives.” In his own post on LinkedIn, Cavalcante expressed his excitement for the collaboration with No Impunity, saying that “the recognition of my work as a lawyer, representing different associations and tribes, is a source of inspiration to continue facing socio-environmental challenges.” As LFJ reported back in February, Cavalcante has been actively campaigning for support from funders and law firms to support lawsuits against large international corporations harming the people and the environment of the Amazon.  No Impunity stated that it would reveal the details of the case on August 25, and encouraged any interested parties to get in touch.

Commercial

View All
Commercial

Litigation Financiers Organize on Capitol Hill

By John Freund |

The litigation finance industry is mobilizing its defenses after nearly facing extinction through federal legislation last year. In response to Senator Thom Tillis's surprise attempt to impose a 41% tax on litigation finance profits, two attorneys have launched the American Civil Accountability Alliance—a lobbying group dedicated to fighting back against efforts to restrict third-party funding of lawsuits.

As reported in Bloomberg Law, co-founder Erick Robinson, a Houston patent lawyer, described the industry's collective shock when the Tillis measure came within striking distance of passing as part of a major tax and spending package. The proposal ultimately failed, but the close call exposed the $16 billion industry's vulnerability to legislative ambush tactics. Robinson noted that the measure appeared with only five weeks before the final vote, giving stakeholders little time to respond before the Senate parliamentarian ultimately removed it on procedural grounds.

The new alliance represents a shift toward grassroots advocacy, focusing on bringing forward voices of individuals and small parties whose cases would have been impossible without funding. Robinson emphasized that state-level legislation now poses the greater threat, as these bills receive less media scrutiny than federal proposals while establishing precedents that can spread rapidly across jurisdictions.

The group is still forming its board and hiring lobbyists, but its founders are clear about their mission: ensuring that litigation finance isn't quietly regulated out of existence through misleading rhetoric about foreign influence or frivolous litigation—claims Robinson dismisses as disconnected from how funders actually evaluate cases for investment.

Commercial

ISO’s ‘Litigation Funding Mutual Disclosure’ May Be Unenforceable

By John Freund |

The insurance industry has introduced a new policy condition entitled "Litigation Funding Mutual Disclosure" (ISO Form CG 99 11 01 26) that may be included in liability policies starting this month. The condition allows either party to demand mutual disclosure of third-party litigation funding agreements when disputes arise over whether a claim or suit is covered by the policy. However, the condition faces significant enforceability challenges that make it largely unworkable in practice.

As reported in Omni Bridgeway, the condition is unenforceable for several key reasons. First, when an insurer denies coverage and the policyholder commences coverage litigation, the denial likely relieves the policyholder of compliance with policy conditions. Courts typically hold that insurers must demonstrate actual and substantial prejudice from a policyholder's failure to perform a condition, which would be difficult to establish when coverage has already been denied.

Additionally, the condition's requirement for policyholders to disclose funding agreements would force them to breach confidentiality provisions in those agreements, amounting to intentional interference with contractual relations. The condition is also overly broad, extending to funding agreements between attorneys and funders where the insurer has no privity. Most problematically, the "mutual" disclosure requirement lacks true mutuality since insurers rarely use litigation funding except for subrogation claims, creating a one-sided obligation that borders on bad faith.

The condition appears designed to give insurers a litigation advantage by accessing policyholders' private financial information, despite overwhelming judicial precedent that litigation finance is rarely relevant to case claims and defenses. Policyholders should reject this provision during policy renewals whenever possible.

Commercial Regulatory Issues

Valve Faces Certified UK Class Action Despite Funding Scrutiny

By John Freund |

The UK Competition Appeal Tribunal (CAT) has delivered a closely watched judgment certifying an opt-out collective proceedings order (CPO) against Valve Corporation, clearing the way for a landmark competition claim to proceed on behalf of millions of UK consumers. The decision marks another important moment in the evolution of collective actions—and their funding—in the UK.

In its judgment, the CAT approved the application brought by Vicki Shotbolt as class representative, alleging that Valve abused a dominant position in the PC video games market through its operation of the Steam platform. The claim contends that Valve imposed restrictive pricing and distribution practices that inflated prices paid by UK consumers. Valve opposed certification on multiple grounds, including challenges to the suitability of the class representative, the methodology for assessing aggregate damages, and the adequacy of the litigation funding arrangements supporting the claim.

The Tribunal rejected Valve’s objections, finding that the proposed methodology for estimating class-wide loss met the “realistic prospect” threshold required at the certification stage. While Valve criticised the expert evidence as overly theoretical and insufficiently grounded in data, the CAT reiterated that a CPO hearing is not a mini-trial, and that disputes over economic modelling are better resolved at a later merits stage.

Of particular interest to the legal funding market, the CAT also examined the funding structure underpinning the claim. Valve argued that the arrangements raised concerns around control, proportionality, and potential conflicts. The Tribunal disagreed, concluding that the funding terms were sufficiently transparent and that appropriate safeguards were in place to ensure the independence of the class representative and legal team. In doing so, the CAT reaffirmed its now-familiar approach of scrutinising funding without treating third-party finance as inherently problematic.

With certification granted, the case will now proceed as one of the largest opt-out competition claims yet to advance in the UK. For litigation funders, the ruling underscores the CAT’s continued willingness to accommodate complex funding structures in large consumer actions—while signalling that challenges to funding are unlikely to succeed absent clear evidence of abuse or impropriety.