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Key Takeaways from LFJ’s Virtual Town Hall: Spotlight on Insurance

By John Freund |
October 1, 2024

Key Takeaways from LFJ’s Virtual Town Hall: Spotlight on Insurance

On September 26th, LFJ hosted a virtual town hall titled “Spotlight on Insurance.” The panel discussion featured David Kerstein (DK), Founder and Managing Director at Arcadia Finance, Michael Perich (MP), Director, Head of Litigation Insurance at Lockton Companies, Steve Jones (SJ), Managing Director, M&A, Litigation and Tax Practice at Gallagher, and Jeremy Marshall, Chief Investment Officer and Managing Director, Winward U.K. Limited. The panel was moderated by Jim Batson (JB), Chief Operating Officer at Westfleet Advisors.

Below are some key takeaways from the event:

JB: As Arcadia is a relatively new player in the litigation finance space, how has Arcadia incorporated insurance products into your underwriting and claims selection processes?

DK: As we were raising capital earlier this year, we explored using insurance to wrap a future portfolio, to potentially help drive fundraising and lower cost of capital. We weren’t able to do that as a first-time manager, but it’s something we’d like to explore in the future. We’re currently exploring traditional insurance products like JPI, and wrapping portfolios that may be on the edge of our mandate, and wrapping them in insurance would help us get to ‘yes.’

JB: So wrapping portfolios will help you look at some deals you might not otherwise consider?

DK: Exactly.

JB: Steve, can you give us an overview of the current Legal Insurance market? Especially focusing on recent developments in Capital Protection Insurance.

SJ: At the moment, I’m seeing a lot of innovation, so it seems like no two deals are the same, as there is a lot of creativity to get deals done. Very high submission rates, which probably suggests that knowledge of the products is increasing. And I see insurers and funders collaborating. It’s very seldom we see funders approach portfolio deals without thinking of insurance, and capital protection insurance (CPI) is the most obvious example of that. The net result of all of that is increased choice for clients, which I think we can all agree is a good thing.

JB: Jeremy, how do you view the relationship between funders and insurers? Some have thought of insurers as competitors to litigation funders – an example is in the appeal context, where the client has the option of taking funding and de-risking immediately, or taking insurance and de-risking at conclusion of the matter. How do you see the relationship between insurers and funders evolving?

JM: I view it very much as a collaborative venture, for at least two specific reasons: One is the competition appeal tribunal (CAT) in the UK. You couldn’t go into the CAT without the support of the insurers. And that morphs into the concept of co-funding, which is growing. And you wouldn’t be able to do this without insurers, particularly when you’ve got a policy with an insurer and you’re invited to participate with somebody else, it might be syndicated with more than one funder– all the insurers are going to have positions in relation to that and you’re not going to get it off the ground without the insurers involved. It really is a team effort, as cases have lots of ups and downs.

Without a good relationship with an insurer, you’re not going to get off the ground. And particularly in a client-facing situation, you want insurers and funders to be speaking with the same voice, and often you’ll see in points of tension where clients and law firms sometimes, will try to play the ‘divide and rule game’ with insurers and funders. And we need to speak with a unified voice if we can. And I think that will grow in time, where insurers will play a bigger role in both the front and back end of a transaction.

JB: Michael, from your perspective, what are you seeing as the most interesting trends in terms of the intersection of insurance and litigation funding?

MP: Litigation insurance has been in the transaction space for quite a long time. What we’ve been seeing lately is a substantial uptick in deal flow based on increased awareness and knowledge of the product base. Some of that deal flow are things that are not insurable (in the US market) – things like portfolios of personal injury or mass tort cases. Those won’t be insurable in the US. But we’re seeing more IP and antitrust cases, and more interest around building a sustainable market that involves portfolio risks and complex pieces of commercial litigation that helps make a more efficient transaction for everybody. And that’s where all of the parties are getting more aligned. So over the past six months, we’ve been noticing a lot more collaboration and innovation lately, which is a good thing.

For the full panel discussion, please click here.

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John Freund

John Freund

Commercial

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Commercial Regulatory Issues

Rep. Issa’s Litigation Funding Transparency Effort Falters in House Judiciary Committee

By John Freund |

The latest attempt to legislate transparency in U.S. litigation funding stalled in the House Judiciary Committee this week when the committee considered the Protecting Third Party Litigation Funding From Abuse Act but recessed without ever voting on the measure and did not reconvene to advance it. The bill, introduced by Representative Darrell Issa of California, has now effectively been pulled from further consideration at this stage.

An article in IPWatchdog states that the Protecting Third Party Litigation Funding From Abuse Act was debated alongside other measures during a lengthy markup that focused primarily on immigration enforcement issues. The measure closely tracked a previous effort, the Litigation Transparency Act of 2025, also spearheaded by Issa, which sought to require parties in civil actions to disclose third party funding sources and related agreements. Like its predecessor, the current bill faced procedural challenges and competing priorities in committee, and did not reach the floor for a vote before lawmakers recessed.

Issa and his co-sponsors have framed the effort as necessary to illuminate so-called abuses in the U.S. litigation system by requiring the identity of third party funders to be disclosed to courts and opposing parties. But the repeated failure of similar bills to gain traction reflects deep partisan and practical concerns. Opponents argue that broad disclosure mandates could chill legitimate funding arrangements and impede access to justice, while supporters insist that transparency is essential to protect defendants and the legal system from hidden financial interests.

The stall of this latest proposal comes amid other congressional efforts on litigation finance, including separate proposals to address foreign funding in U.S. courts, but underscores the political and policy challenges in regulating private capital in civil litigation. With the bill pulled, stakeholders will watch for whether future iterations emerge in committee or form the basis of negotiations in upcoming sessions.

Commercial Regulatory Issues

Malaysian Bar Backs Arbitration Funding Reform

By John Freund |

The Malaysian Bar has publicly endorsed Malaysia’s newly implemented legislative framework governing third party funding in arbitration, while cautioning that all stakeholders must remain vigilant as the regime is put into practice. The comments come as Malaysia formally joins a growing group of jurisdictions that have moved to regulate litigation and arbitration funding rather than prohibit it outright.

An article in Business Today Malaysia reports that the Malaysian Bar welcomed the coming into force of the Arbitration Amendment Act 2024 on 1 January 2026, which abolishes the long standing common law doctrines of maintenance and champerty in the context of arbitration. The new law expressly permits third party funding for arbitral proceedings and introduces a regulatory structure aimed at balancing access to justice with procedural fairness and independence. According to the Bar, the reforms are a positive and necessary step to ensure Malaysia remains competitive as an international arbitration seat.

The legislation includes requirements for funded parties to disclose the existence and identity of any third party funder, addressing concerns around conflicts of interest and transparency. It also introduces a code of practice for funders, designed to ensure that funding arrangements do not undermine counsel independence, tribunal authority, or the integrity of the arbitral process. The Malaysian Bar emphasised that funders should not exert control over strategic decisions, evidence, or settlement, and that tribunals retain discretion to manage funding related issues, including costs and security for costs applications.

While acknowledging ongoing concerns that third party funding could encourage speculative or unmeritorious claims, the Bar took the position that ethical and well regulated funding should not be viewed as a threat to arbitration. Instead, it framed funding as a legitimate tool that can enhance access to justice for parties who might otherwise be unable to pursue valid claims due to cost constraints. The Bar called on lawyers, arbitrators, institutions, and funders to uphold both the letter and the spirit of the new law as it is implemented.

Commercial People Moves

Omni Bridgeway Appoints Nathan Krapivensky as Investment Advisor

By John Freund |

Global litigation funder Omni Bridgewayhas announced the appointment of Nathan Krapivensky as an Investment Advisor, reinforcing the firm’s ongoing focus on deepening its investment expertise and strengthening origination capabilities across complex disputes.

Omni Bridgeway states that Krapivensky joins the business with extensive experience spanning litigation finance, complex commercial disputes, and investment analysis. In his new role, he will advise on the assessment and structuring of potential investments, working closely with Omni Bridgeway’s global investment teams to evaluate risk, quantum, and strategic considerations across funded matters. The appointment reflects the firm’s continued emphasis on disciplined underwriting and the development of sophisticated funding solutions for corporate clients, law firms, and claimants.

According to the announcement, Krapivensky brings a background that combines legal insight with commercial and financial acumen, positioning him to contribute meaningfully to Omni Bridgeway’s case selection and portfolio construction processes. His experience in analysing disputes at various stages of the litigation lifecycle is expected to support the firm’s efforts to deploy capital efficiently while maintaining rigorous investment standards. Omni Bridgeway highlighted that the role is advisory in nature, underscoring the importance of independent, high-quality judgment in evaluating opportunities across jurisdictions and asset classes.

The hire also aligns with Omni Bridgeway’s broader strategy of investing in talent as competition within the litigation funding market intensifies. As funders increasingly differentiate themselves through expertise rather than capital alone, senior advisory appointments have become a key lever for firms seeking to enhance credibility with sophisticated counterparties. By adding an experienced investment advisor, Omni Bridgeway signals its intention to remain at the forefront of the market for complex, high-value disputes.