Thomas is the Founder of Fenaro, a modern fund management platform for litigation finance. He holds a law degree from Durham University and has spent his career designing and delivering large-scale, complex financial services platforms. Prior to founding Coremaker's Fenaro product, he spent much of his career at Accenture, PwC, and other management consulting firms, working with global banks, asset managers, and institutional investors.

Below is our LFJ Conversation with Thomas Bell:

The litigation finance industry has grown to over $16 billion, yet your blog notes that many firms still run on spreadsheets. What specific operational pain points do fund managers face with legacy systems, and how does Fenaro address them? 

Despite the industry’s rapid growth, most litigation funders continue to rely on in-house spreadsheets or fragmented systems that are not designed to handle litigation finance. From our conversations with funders across the market, three operational pain points consistently arise.

The first is calculation risk. Funders regularly tell us about issues arising from manual models and fragile data infrastructure, ranging from investor reports needing to be reissued due to errors (surprisingly common), to material budget discrepancies only being identified late in a case lifecycle (less common, but in some cases career-ending). Purpose-built fund management systems substantially reduce this risk by centralising data and automating complex calculations.

The second is friction with law firms after a deal has closed. One funder summarised their biggest challenge as “getting lawyers to think in IRR terms.” In practice, this reflects the lack of efficient processes for tracking budgets, agreeing drawdowns, reviewing invoices, and sharing case updates. Fenaro addresses this through the borrower portal, which provides law firms with a structured and transparent way to work with funders throughout the life of an investment, resulting in a much more positive relationship.

The third is operational complexity limiting scale. Many funders speak candidly about ambitious growth plans being constrained by manual reporting, bespoke processes, and operational bottlenecks. Without greater standardisation and automation, it is difficult to scale portfolios or support increased institutional participation. Fenaro is built from the ground up to reduce the overhead of operational processes, while giving funders all the key information required to focus on growing and managing the fund.

In mass tort strategies, some funders are managing regular updates across tens or even hundreds of thousands of individual claims and many different law firms. Several have told us that keeping this information accurate and up to date is a data nightmare that quickly becomes unmanageable, and worry they’re spending too much time on administrative data-wrangling efforts, and not enough time on actually mining the content for value.

Fenaro is designed to process high volumes of case data from multiple law firms in a consistent format. Updates can be submitted through borrower portals or uploaded directly, allowing funders to see the status, valuation, and history of every claim at a glance. As part of this process, the platform runs validation checks and identifies potential duplicate claimants, a serious and well-known issue in mass tort funding. The same validated data is then used to produce investor and internal reports without the need for manual reconciliation.

We frequently hear that fund visibility tends to drop sharply after capital is deployed. Monitoring budgets, drawdowns, and expenditure often relies on periodic reporting and manual review.

Fenaro provides funders with continuous visibility at both the portfolio and case level. At the same time, Fenaro gives law firms access to a free borrower portal. Contrary to the perception that firms resist new technology, many lawyers have told us directly that they are willing to adopt tools that reduce administrative burden and improve clarity. The borrower portal allows firms to track funding, compare spend against budgets, submit updates, and request additional capital, reducing friction on both sides and improving the overall relationship.

Funders often tell us that building and maintaining waterfall models in spreadsheets is one of the most time-consuming and error-prone parts of the investment process. Fenaro allows complex waterfalls to be configured in seconds, with multi-step logic based on capital return, interest, IRR, MOIC and other calculation types.

A flow view presents the waterfall logic in plain English, and scenario-modelling functionality allows users to test scenarios and explain outcomes to investment committees and LPs. Once a deal is live, waterfalls update automatically as cashflows occur, removing the need for repeated spreadsheet rework and reducing calculation risk.

Many funders we speak to see the biggest opportunities in greater standardisation, which would help unlock institutional capital and support a more liquid secondary market. There is still significant friction in how funders, law firms, investors, insurers, and brokers interact, and we’re tackling this one step at a time, focusing on the most pressing pain points first.

We are also frequently asked about AI and machine learning. Our view is that near-term value lies in decision support rather than decision replacement—particularly in reducing the time spent evaluating the majority of cases that are ultimately declined, while equipping underwriters with better information to make faster, more confident decisions. It will likely be some time before the technology is sufficient to take underwriting decisions on behalf of the funder, given the complexity and variation of the underlying legal cases, but things are moving quickly in the AI space so we continue to test and review various models as they evolve.

The following was contributed by Eric K. Schuller, President, The Alliance for Responsible Consumer Legal Funding (ARC).

The Real-World Consequences of Over-Regulation and Misclassification

State lawmakers across the country are increasingly focused on how to regulate third-party financial activity connected to litigation. That attention is appropriate and necessary. However, when Consumer Legal Funding (CLF) is misclassified as a loan, conflicted with commercial litigation finance, or subjected to regulatory structures designed for fundamentally different financial products, the consequences fall not on providers, but on consumers who need it the most.

Consumer Legal Funding, Funding Lives, Not Litigation, exists to help individuals with pending legal claims meet basic household needs while their cases move through the legal system. These consumers are often recovering from serious injuries, unable to work, and facing mounting financial pressure. When CLF disappears due to over-regulation or misclassification, those consumers do not suddenly become financially secure. Instead, they are pushed into worse, more dangerous alternatives, or forced into decisions that undermine both their legal rights and their long-term financial stability.

Who Uses Consumer Legal Funding and Why

Consumers who turn to CLF are not seeking to finance their litigation. They are seeking financial stability. On average, CLF transactions range between $3,000 and $5,000. These monies are used for rent, mortgage payments, utilities, groceries, childcare, transportation, and medical co-pay. In many cases, it is differences between maintaining housing or facing eviction, between keeping a car or losing the ability to get to medical appointments or work.

CLF is non-recourse. If the consumer does not recover in their legal claim, they owe nothing. That structure places all financial risk on the provider, not the consumer. It is precisely this risk allocation that distinguishes CLF from loans and traditional credit products, and it is why courts and legislatures in numerous states have recognized that CLF is not a loan.

When lawmakers impose loan-based frameworks on CLF, including usury caps, amortization requirements, or repayment obligations disconnected from case outcomes, the product becomes economically impossible to offer. The result is not a cheaper product. The result is no product at all.

The Immediate Impact of CLF Disappearing

When CLF exits a state market, the effects are immediate and measurable.

First, consumer access disappears. Providers cannot operate under regulatory structures that ignore the non-recourse nature of the product. Capital exits the market, and consumers lose an option that previously helped them remain financially afloat during litigation.

Second, consumers are forced into inferior alternatives. Without CLF, injured individuals frequently turn to credit cards, payday lenders, installment loans, or borrowing from friends and family. These options often carry guaranteed repayment obligations, compounding interest, collection risk, and damage to credit. Unlike CLF, these products do not adjust based on whether the consumer recovers anything in their legal claim.

Third, financial pressure forces premature settlements. When consumers cannot meet basic living expenses, they are more likely to accept early, undervalued settlements simply to survive. This undermines the fairness of the civil justice system and benefits defendants and insurers, not injured parties or the courts.

Misclassification Harms the Most Vulnerable Consumers

The consumers most harmed by the elimination of CLF are those with the fewest alternatives. These are individuals with limited savings, limited access to traditional credit, and limited ability to absorb income disruption following an injury.

Ironically, regulations intended to protect consumers often end up harming precisely the consumers they sought to help. When CLF is treated as a loan, the regulatory burden drives responsible providers out of the market while doing nothing to improve consumer outcomes. Consumers do not gain safer options. They lose transparent, regulated, non-recourse funding and are pushed toward products with higher risk and fewer protections.

This is not hypothetical. States that have enacted overly restrictive frameworks or applied inappropriate rate caps have seen providers exit, access shrink, and consumer choice vanish. The lesson is clear. When regulation ignores economic reality, consumers pay the price.

CLF Does Not Drive Litigation or Verdict Inflation

A common concern raised in policy debates is whether CLF encourages litigation, prolongs cases, or contributes to so-called nuclear verdicts. The evidence does not support these claims.

CLF is accessed after a legal claim already exists. It does not finance attorneys’ fees, court costs, or litigation strategy. Providers have no control over legal decisions, settlement timing, or trial outcomes. Their only interest is whether a consumer recovers at all.

Moreover, the small size of typical CLF transactions makes it implausible that they influence case strategy or verdict size. A $3,000 to $5,000 transaction used to pay rent or utilities does not drive multi-million-dollar litigation outcomes. Conflating CLF with commercial litigation finance obscures these realities and leads to policy mistakes.

A Better Path Forward for Policymakers

Legislators can protect consumers without eliminating CLF. States that have enacted thoughtful CLF statutes have focused on disclosure, transparency, contract clarity, and consumer choice, rather than imposing loan-based rate structures that do not fit a non-recourse product.

Effective regulation acknowledges three core principles. First, CLF is not a loan and should not be regulated as one. Second, consumers benefit from access to a regulated, transparent product rather than being pushed into worse alternatives. Third, clear rules provide stability for both consumers and providers.

When policymakers get this balance right, consumers retain access to a product that helps them weather one of the most difficult periods of their lives without distorting the justice system or creating unintended harm.

Conclusion

The issue confronting lawmakers is not whether Consumer Legal Funding should be subject to oversight, but whether existing and future frameworks accurately reflect how the product operates and whom it serves. When CLF is swept into regulatory regimes designed for loans or commercial litigation finance, the result is not improved consumer protection. It is the quiet elimination of a non-recourse option that many injured consumers rely on to remain financially stable while their legal claims are resolved.

Careful, informed policymaking requires recognizing that Consumer Legal Funding is distinct, limited in size, non-recourse, and consumer-facing. Regulation that acknowledges those characteristics preserves transparency and accountability without stripping consumers of choice or forcing them into riskier financial alternatives. When rules are tailored to economic reality rather than broad assumptions, consumers are better protected, markets remain stable, and the civil justice system functions as intended.

Pogust Goodhead welcomes the decision of Mrs Justice O’Farrell DBE refusing BHP’s application for permission to appeal the High Court’s judgment on liability in the Mariana disaster litigation. The ruling marks a major step forward in the pursuit of justice for over 620,000 Brazilian claimants affected by the worst environmental disaster in the country’s history. 

The refusal leaves the High Court’s findings undisturbed at first instance: that BHP is liable under Brazilian law for its role in the catastrophic collapse of the Fundão dam in 2015. In a landmark ruling handed down last November, the Court found the collapse was caused by BHP’s negligence, imprudence and/or lack of skill, confirmed that all claimants are in time and stated that municipalities can pursue their claims in England. 

In today’s ruling, following the consequentials hearing held last December, the court concluded that BHP’s proposed grounds of appeal have “no real prospect of success”. 

In her judgment, Mrs Justice O’Farrell stated:  “In summary, despite the clear and careful submissions of Ms Fatima KC, leading counsel for the defendants, the appeal has no real prospect of success. There is no other compelling reason for the appeal to be heard. Although the Judgment may be of interest to other parties in other jurisdictions, it is a decision on issues of Brazilian law established as fact in this jurisdiction, together with factual and expert evidence. For the above reasons, permission to appeal is refused”. 

At the December hearing, the claimants - represented by Pogust Goodhead - argued that BHP’s application was an attempt to overturn detailed findings of fact reached after an extensive five-month trial, by recasting its disagreement with the outcome as alleged procedural flaws. The claimants submitted that appellate courts do not re-try factual findings and that BHP’s approach was, in substance, an attempt to secure a retrial. 

Today’s judgment confirmed that the liability judgment involved findings of Brazilian law as fact, based on extensive expert and factual evidence, and rejected the defendants’ arguments, who now have 28 days to apply to the Court of Appeal.  

Jonathan Wheeler, Partner at Pogust Goodhead and lead of the Mariana litigation, said:  “This is a major step forward. Today’s decision reinforces the strength and robustness of the High Court’s findings and brings hundreds of thousands of claimants a step closer to redress for the immense harm they have suffered.” 

“BHP’s application for permission to appeal shows it continues to treat this as a case to be managed, not a humanitarian and environmental disaster that demands a just outcome. Every further procedural manoeuvre brings more delay, more cost and more harm for people who have already waited more than a decade for proper compensation.” 

Mônica dos Santos, a resident of Bento Rodrigues (a district in Mariana) whose house was buried by the avalanche of tailings, commented:  "This is an important victory. Ten years have passed since the crime, and more than 80 residents of Bento Rodrigues have died without receiving their new homes. Hundreds of us have not received fair compensation for what we have been through. It is unacceptable that, after so much suffering and so many lives interrupted, the company is still trying to delay the process to escape its responsibility." 

Legal costs 

The Court confirmed that the claimants were the successful party and ordered the defendants to pay 90% of the claimants’ Stage 1 Trial costs, subject to detailed assessment, and to make a £43 million payment on account. The Court also made clear that the order relates to Stage 1 Trial costs only; broader case costs will depend on the ultimate outcome of the proceedings. 

The costs award reflects the scale and complexity of the Mariana case and the way PG has conducted this litigation for more than seven years on a no-win, no-fee basis - funding an unprecedented claimant cohort and extensive client-facing infrastructure in Brazil without charging clients. This recovery is separate from any damages award and does not reduce, replace or affect the compensation clients may ultimately receive.