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Key Takeaways from LFJ’s Virtual Town Hall: 2024 Recap & 2025 Outlook

By John Freund |

Last week, LFJ hosted its final virtual town hall of the year which covered an array of key developments and trends in the legal fundng sector. Panelists included Tets Ishikawa (TI), Managing Director of LionFish, Boris Ziser (BZ), Co-Head of the Finance Group at Schulte Roth and Zabel, William Marra (WM), Director at Certum Group, and Sarah Johnson (SJ), Head of the Litigation Investing Team at The D.E. Shaw Group. The panel was moderated by Rebecca Berrebi (RB), Founder and CEO of Avenue 33, LLC.

Below are the key takeaways from the event.

RB: What are the key changes that have effected the regulatory landscape of litigation finance in 2024, and how do you think those changes have affected deals in the industry this year?

TI: There’s been quite a few symbolic moments over the past two years. There was a proposal [The Voss Report] saying that litigation funding should be regulated and there should be a cap on fees. In the UK, there as a Supreme Court decision in the case of PACCAR that considered litigation funding agreements to be damages-based agreements, basically making a lot of litigation funding agreements unenforceable. And that has triggered an industry-wide review of the litigation funding industry in the UK by the Civil Justice Council. And that is ongoing, with a report expected next year, and the government may act on those recommendations and enact legislation.

In addition to all of that, there was a report written by the European Law Institute, which is probably the most interesting thing to focus on. Rather than the usual high level narratives of what’s good and bad about litigation funding, it actually proposed principles on the back of research and feedback that it got on all sides of the argument. And it was written by some really highly regarded judges and academics. And the report was quite balanced. But what was really interesting about the report was that it set a tone for the direction of how the UK should really be thinking about litigation funding. The key themes coming out of it are that 1) there is no one size fits all solution-litigation funding has many different parts to it, and 2) that regulation is not just something one does, but there needs to be a real identifiable problem that regulation resolves, otherwise there could be a lot of adverse consequences, and that recognition is key. There is also the recognition that funders do run commercial businesses, so there has to be an economically viable solution.

RB: Deal structures evolve as time goes on, and certainly have evolved in our industry. Boris, can you speak to any particular deal structures that have become less popular this year than they were before, or have started to fall by the wayside?

BZ: I wouldn’t say any have fallen by the wayside, I think that there has been a little bit of a shift – if you go back a number of years, you would see there were more debt deals than equity deals, and that was for various reasons, some of it was preference, some was tax-driven, some was based on an analysis of whether you would be splitting legal fees and things like that – and I think over the last couple of years, you have seen more of a shift where more parties are comfortable with equity deals, particularly with the introduction of alternative business structures in Arizona and Utah. So I don’t think that anything has gone by the wayside, but there has been more comfort and more development on the equity side of the business.

RB: Will, do you see that too? What do you think about that?

WM: Yeah I think that’s right. What’s interesting is, there hasn’t been that much development on the question of which provisions in litigation funding contracts may or may not be enforceable, or the big question of tax clarity. I think Boris makes a very good point about Rule 5.4, the debate around that has largely settled. So you do see an increase around law firm deals. I think this question is also tied up with the increasing diversification of products available, and if you start too think about insurance, and insurance-backed debt, and debt plus equity in these deals, we’re seeing a lot of that. We’re also seeing an increase in acquisitions to the extent that claims are alienable and can be acquired. I think that a lot of claim holders are seeing a lot of benefits entering into those sorts of arrangements.

RB: Sarah, what deal structures do you think are growing in popularity, and why do you think that is happening?

SJ: We’ve seen something similar in the shift from debt to equity. I might characterize it though as a move away from debt to law firms, where your collateral is a lot of cases. I think we’ve seen those deals – especially the ones that happened before Covid – there were a lot of different risks that were introduced rather than just the underlying litigation. The amount of OpEx that the law firm needed to survive, and when you’re debt financing for the whole firm, it gets very complicated. So we’ve seen a shift away more to – I won’t say single cases – but perhaps smaller portfolios with a law firm, so you can target your exposure and share more of the risk and OpEx with the law firms themselves.

We’ve also seen a bifurcation in terms of the size of deals. We’re seeing some more very large deals, like $100MM+ deals, and also small single cases, than perhaps we saw in previous years. We’re just seeing a lot of one-off single case deals where funders can share the risk, vs. entire portfolio monetizations.

To view the entire discussion, join the event page on LinkedIn (you must register for the event to view).

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John Freund

John Freund

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Commercial Regulatory Issues

AALF Chairman: UK Should Avoid Repeating “Australia’s Flirtation with Overbearing Regulation”

By Harry Moran |

With the UK funding industry awaiting the outcome of the Civil Justice Council’s review of third-party litigation funding, most of the commentary about what direction the government should take has come from those professionals practicing inside the UK. However, in an example of transnational solidarity between funding markets, the head of Australia’s industry association has spoken out to encourage the UK government to act to protect its legal funding sector.

In an opinion piece for The Law Society Gazette, John Walker, chairman of the Association of Litigation Funders of Australia (AALF), presents a strong argument that the UK government must avoid following Australia’s past mistake of overregulating the legal funding industry. With the prospect of the CJC’s review soon reaching its conclusion, Walker argues that the government’s “priority must be addressing the uncertainty created by the PACCAR decision”, rather than acceding to the demands of “the powerful, well-resourced and disingenuous minority perspective of the US Chamber of Commerce.”

Walker points to the recent history of legal funding in Australia, where the strength of these critics’ views led to the previous governments introducing strict regulations that created an environment where “access to justice for claimants was denied, corporate wrongdoers were protected, and claims started to dry up.” As Walker explains, the true lesson from Australia was the reversal of these regulations by the new government in 2022, which has seen funding rebound and drive a wave of class actions representing Australians seeking justice once more.

Taking aim at the opponents of the litigation funding industry, Walker highlighted the “myths pedalled” by groups like Civil Fair Justice as being “built on falsehoods that risk clouding reality and choking off access to justice.” Putting the often-repeated claim of funders supporting frivolous claims in the crosshairs, Walker notes “in reality, funders in the UK fund as few as 3% of the cases they're approached about.”

Commercial Legal Innovation

Qanlex Rebrands as Loopa Finance

By Harry Moran |

Litigation funding startups are a common occurrence, especially in recent years. However, the rebranding of an established funder is less common, yet worth keeping an eye on.

In a new blog post, the litigation funder formerly known as Qanlex announced that it is rebranding and will now operate under the name: Loopa Finance. The funder emphasised that it is still “the same team, the same values, and the same focus”, but with a new name that represents  the adoption of a “a clearer, more modern, and more memorable identity.”

The blog post goes on to provide a fuller explanation of the new name: “Loopa refers to our way of working: examining each opportunity with a magnifying glass and creating virtuous loops of funding, access to justice, and efficient conflict resolution.” The announcement also clarifies that the rebranding “does not imply any structural, corporate, or operational modifications.”

Loopa was founded as Qanlex in 2020, offering litigation finance services for cases in Latin America before expanding its funding solutions to commercial claims and arbitrations in continental Europe. As LFJ reported in January of this year, the funder revealed that it was refining its Latin America strategy using new technologies and focusing on specific sectors within individual jurisdictions in the region. Examples of this sector focus include energy cases in Ecuador, real estate development matters in Costa Rica, and oil and energy cases in Colombia. 

More information about Loopa Finance can be found on its website. 

Case Developments Commercial

Echo Law and LLS File Class Action Against Toyota Finance in Australia

By Harry Moran |

Class actions in Australia continue to be viewed as desirable opportunities for litigation funders, with the first half of 2025 already seeing a number of funded claims brought on behalf of consumers wronged by the state or large corporations. 

A joint media release from Echo Law and Litigation Lending Services (LLS) announced that they are pursuing a new class action against Toyota Finance in Australia, this time over the sale of “junk” add-on insurance to consumers. The claim, which has been brought before the Supreme Court of Victoria, alleges that Toyota Finance and insurer Aioi Nissay Dowa Insurance Company Australia (ADICA), engaged in “unjust, unfair, misleading and unconscionable” conduct that breached the Corporations ACT, ASIC Act, and National Consumer Credit Protection Act 2009.

The class action has been filed on behalf of any consumers who took out a car loan with Toyota Finance and were sold a Toyota branded add-on insurance policy between 1 January 2010 and 5 October 2021. The allegedly “junk” insurance policies covered by the class action include Toyota Payment Protection Insurance, Toyota Finance Gap Insurance, and Toyota Extended Warranty Insurance.

Alex Blennerhassett, Principal Lawyer at Echo Law, said that “this class action is about holding Toyota Finance and ADICA to account for knowingly selling junk insurance to everyday Australians, even though these policies offered no value.” In a separate post on LinkedIn, Emma Colantonio, Chief Investment Officer at LLS, said that the class action is “a strong example of litigation funding enabling access to justice and supporting consumers in holding major financial players to account.”

This class action is separate to the Flex Commissions claim which was filed by Echo Law against Toyota Finance in February 2024. That class focuses on allegations that car dealers secretly inflated the interest rate on consumers’ car loans, resulting in additional interest fees. The Supreme Court has ruled that these separate class actions can be managed together, and Ms Blennerhassett said that they expected “there to be a significant number of persons who are group members in both proceedings”. 

LLS is providing funding for both class actions brought against Toyota Finance. More information on both class actions can be found on Echo Law’s website.