Trending Now
Commercial

Litigation Finance Journal’s Quarterly Industry Roundup

Litigation Finance News
July 29, 2020

Litigation Finance Journal’s Quarterly Industry Roundup

Litigation Finance News
It’s clear by now that 2020 has been a year like no other. Industry growth and the impact of COVID make this an ideal time to catch up on all of the relevant issues impacting the commercial Litigation Finance industry. With that in mind, LFJ is hosting a panel discussion that will cover a wide range of topics, including the Burford/Muddy Waters saga, the IMF/Omni merger, the rise in IP litigation, hedge fund interest in the funding sector, and much more.  The panel will be moderated by Slingshot Capital founder Ed Truant. Truant is an investor with a unique perspective on commercial litigation finance, backed up by years of experience in the field. The panel will feature a collection of industry experts:  Molly Pease is the managing director of Curiam Capital, and a former litigator whose expertise includes insurance, antitrust, and securities. She has also been an Executive Director and has worked as General Counsel—providing her a varied and nuanced perspective on a vast array of legal subjects. Mick Smith is the founder of Almatura, and co-founded Calunius Capital in 2006. He has studied Mathematics and Law at Cambridge, and is pursuing a Masters in Data Science. Robert Hannah, co-founder of Augusta Ventures, spent 20 years managing hedge funds before becoming acting Chief Investment Officer for Mako Investment Managers—an organization he co-founded. Hannah has an LLB and an MBA from Cranfield School of Management. He is currently the Managing Director of the London office. William Farrell Jr. is the managing director and co-founder of private investment company Longford Capital. His current duties include underwriting, sourcing, and monitoring investments. He has decades of litigation experience and as a government prosecutor. Farrell has also served as a partner in the commercial litigation departments of two different firms. The panel is audio-only and will be held Thursday, July 30th at 1 pm EST. It will feature a 45-minute panel discussion that will be followed by a question and answer period with attendees.  For more information and to purchase tickets, please visit this link.
Secure Your Funding Below
Secure Your Funding Sidebar

Commercial

View All
Case Developments Commercial

Woolworths Faces Shareholder Class Action Over Underpayments

By John Freund |

Woolworths Group is facing a new shareholder class action that alleges the company misled investors about the scale and financial impact of underpaying salaried employees. The action, backed by Litigation Lending Services, adds a fresh legal front to the long-running fallout from Woolworths’ wage compliance failures.

According to AFR, at the heart of the claim is the allegation that Woolworths did not adequately inform the market about the risks posed by its reliance on annualised salary structures and set-off clauses. These payment methods averaged compensation over longer periods instead of ensuring employees received correct pay entitlements for each pay period. This included overtime, penalty rates, and other award entitlements.

Recent decisions by the Federal Court of Australia have clarified that such set-off practices are non-compliant under modern awards. Employers must now ensure all entitlements are met for each pay period and maintain detailed records of employee hours. These rulings significantly raise the compliance bar and have increased financial exposure for large employers like Woolworths, which has tens of thousands of salaried employees.

As a result, Woolworths could face hundreds of millions of dollars in remediation costs. The shareholder class action argues that Woolworths failed to disclose the magnitude of these potential liabilities in a timely or accurate way. Investors claim that this omission amounts to misleading conduct, and that they were not fully informed of the risks when making investment decisions.

Case Developments Commercial

Parabellum Capital Named in Goldstein Criminal Disclosure

By John Freund |

Tom Goldstein, the former SCOTUSblog co-founder and prominent appellate advocate, has named Parabellum Capital as the litigation funder at the center of a federal indictment accusing him of misappropriating legal financing to pay off personal debts.

Bloomberg Law reports that in a court filing made last week, Goldstein disclosed that he used advances from Parabellum to cover non-litigation-related expenses, including the purchase of a multimillion-dollar home. The revelation comes amid federal charges alleging that Goldstein misused firm funds to settle gambling losses and personal obligations, then mischaracterized those payments as business expenses. Prosecutors previously referred to an unnamed funder involved in these transactions; Parabellum is now confirmed to be that firm.

Goldstein’s disclosure appears to be part of a strategic legal response to mounting charges of tax evasion and financial misrepresentation. Once a high-profile figure in Supreme Court litigation, Goldstein now faces scrutiny not only for alleged personal financial misconduct but also for the implications his actions may have on the litigation finance ecosystem.

While Parabellum has not been accused of any wrongdoing, the situation highlights a key risk in the litigation funding model: the potential for funds advanced against anticipated case proceeds to be diverted toward unrelated personal uses. Funders traditionally require that capital be deployed for case expenses, legal fees, and expert costs—not real estate acquisitions or debt payments.

This case underscores a growing concern in the legal funding industry: the need for tighter controls, enhanced due diligence, and possibly more explicit regulatory frameworks to ensure that funding agreements are not exploited. As the industry continues to mature, episodes like this could shape how funders vet borrowers and monitor the use of their capital.

Commercial

Litigation Finance Hits Wall as Bets on Blockbuster Returns Flounder

By John Freund |

At a Fall conference hosted by law firm Brown Rudnick, attendees from across the litigation finance industry voiced growing concern about the sector’s prospects, signaling what may be a turning point for a business long hyped for outsized returns.

According to Yahoo Finance, many in attendance described a drain in new investment and increasing skepticism that big wins, once seen as routine, will materialize. In recent years, funders have aggressively financed high-stakes lawsuits with the expectation that a handful of big verdicts or settlements would deliver significant payouts. But now, as legal outcomes remain unpredictable and returns disappoint, investors appear to be pulling back. Some funders are reportedly limiting new deals, tightening criteria for which cases to support, or reevaluating their business models altogether.

For smaller plaintiffs and everyday plaintiffs’ firms, the contraction in funding availability could prove especially painful. The ripple effects may leave many without access to third-party capital needed to bridge the lengthy wait until verdict. And for funders, the shrinking appetite for risk could mean narrower portfolios and potentially lower returns overall.

The industry’s recalibration may also carry broader implications. Fewer fundings could slow litigation overall. Plaintiffs may see reduced leverage while funders may prioritize lower-risk, smaller-return cases. The shift could further concentrate power among a shrinking number of large, well-capitalized funders.

As the post-conference murmur becomes a chorus, the once-booming litigation finance sector may be entering a more sober phase — where hope for home-run returns gives way to caution, discipline, and perhaps a redefinition of what success looks like.