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Legal Innovation

Addleshaw Goddard Expands to Meet Litigation Funding Demand

The firm of Addleshaw Goddard has long been a proponent of third-party litigation finance, having used it to support clients in an array of diverse jurisdictions. Now they are launching a tailored set of solutions for clients, encompassing third-party funding, damage-based agreements, conditional fee agreements, and after the event insurance.

Addleshaw Goddard explains that this expansion promises to be of specific interests to:

  • Those seeking to share risk when filing or defending a claim
  • Parties seeking impartial advice and guidance on funding options
  • Firms new to funding that need to better understand available options
  • Funders looking to develop new ways to structure funding agreements

Consulting with funding experts should be an essential part of due diligence on both sides of a litigation conflict, as it combines expertise from finance, litigation, commercial business, and funding. Mark Molyneux, Head of Litigation, states that this fully rounded approach is exactly what’s most needed in the market.

Addleshaw joins a growing list of law firms that are expanding into the lucrative litigation funding market.

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Commercial Funder's Corner Legal Innovation

Report Highlights ‘Substantial Benefits’ of Litigation Funding for Consumer Justice

By Tom Webster |

The following was contributed by Tom Webster, Chief Commercial Officer for Sentry Funding.

Litigation funding provides ‘substantial benefits’ to claimant organisations, and robust funding mechanisms are ‘essential’ to secure justice for consumers, an authoritative report found last month.

The report, Justice Unchained, by European consumer organisation BEUC, also found many of the common criticisms of litigation funding were not backed up by evidence.

The study found that consumer organisations across Europe face significant financial challenges to starting collective redress actions. It noted that initiating a collective action is ‘complex, risky, and expensive’, often involving lengthy proceedings that need significant resources.

The report said: ‘Without sufficient funding, important cases will remain unaddressed and risk making the Representative Actions Directive (RAD)2 an empty shell’.

BEUC said that as public funding, membership fees and donations were often insufficient or unavailable, litigation funding had emerged ‘as a solution to bridge a funding gap’. Benefits for the claimant included access to necessary resources, risk transfer, and ‘a more equal playing field between consumer organisations and powerful defendants’, it said.

The report added that frequent criticisms of litigation funding, such as ‘the risk of frivolous litigation, undue influence by funders, or targeting competitors’ were ‘not well-substantiated’, and ‘insufficiently evidenced by specific cases’.

According to the report, the potential risks of litigation funding in the context of collective redress are already addressed by the Representative Actions Directive, which requires member states to establish a framework that includes procedures to prevent conflicts of interest and undue influence, with judicial oversight to ensure compliance.

The report found that additional regulation of litigation funding at EU level should therefore only be considered if it is necessary. It said: ‘Two-thirds of EU Member States have opted not to regulate [litigation funding] beyond the RAD’s requirements, finding these safeguards sufficient to govern [litigation funding] effectively for collective redress actions. Besides, [litigation funding] can be managed through judicial oversight, as is the case in several Member States with a longer history of using [it]’.

The BEUC report suggested that a set of ‘best practices’, jointly established and agreed by funders, claimant organisations and others, may provide for ‘a balanced solution, ensuring [litigation funding] remains viable while promoting fairness and transparency.’

It said such best practice could encompass transparency over the funder’s sources of capital; full decision-making autonomy for the consumer organisation and its legal counsel; clear agreements on all expenses covered by the funder; clearly defined funder’s remuneration; assurance of the funder’s financial adequacy to meet obligations; strict compliance with transparency requirements set by the law; effective detection and disclosure of any conflicts of interest; well-defined conditions for termination of the funding; and a robust dispute resolution mechanism.

Commercial Funder's Corner Legal Innovation

5 Ways to Retain Top Legal Talent: Why Employees Stay

By Richard Culberson |

The following article was contributed by Richard Culberson, CEO of Moneypenny & VoiceNation, North America.

The legal profession is evolving rapidly, and so is the workforce driving it. This makes retaining top talent critical to ensuring continuity, quality of service, and avoiding the costs and disruption of frequent recruitment.

According to data from the U.S. Bureau of Labor Statistics, over 47 million Americans left their jobs in 2021 alone, with millions continuing to do so each month. For businesses , this turnover presents both a challenge and an opportunity to understand what employees truly value and how to build a workplace they won’t want to leave.

Here are five steps to guide you in creating a workplace where professionals feel supported, motivated, and committed to growing with your firm.

1. Hire for Culture and Potential

The stakes are high in legal recruitment, and hiring the wrong person can have a ripple effect on morale, productivity, and client relationships. So, let’s slow down and hire right.

Instead of focusing solely on technical skills and qualifications, look beyond the resume for candidates whose values align with your firm's culture and long-term goals. Diversity of thought and perspective is an asset in all business and adaptability is increasingly important. The first step is to revisit your hiring process to ensure you’re asking the right questions and seeking individuals who can not only excel in the role today but also grow with your firm in the future.

2. Invest in Their Professional Journey

Your people are your greatest assets, and just like your clients, they require attention and investment. You’ve spent time hiring right, now, it is time to invest in your choices, ensuring that they are set up to succeed from day one.

Make their onboarding experience seamless and engaging but also show them the culture and career path you promised during recruitment. Then, continue this thinking beyond the onboarding and provide opportunities for professional development through training, mentoring, and clear advancement pathways.

In the competitive legal sector, demonstrating a proactive commitment to employee growth and well-being is key to retaining top talent, ensuring your team feels valued and supported in reaching their full potential.

3. Foster Engagement Through Purpose

We all know that engaged employees are productive employees, but often it is forgotten that engagement starts with clarity. Do your team members understand how their daily work contributes to the firm's overall success?

Lawyers are often driven by purpose—whether it’s delivering justice, protecting client interests, or achieving innovative outcomes. So, make it a priority to connect their individual roles to the bigger picture and, in doing so, celebrate their contributions, involve them in decision-making, and foster an environment of trust and open communication.

By aligning their goals with the firm's mission, you create a workplace where everyone feels invested in the outcomes.

4. Lead with Empathy and Kindness

The legal world is often synonymous with high pressure and long hours, but that doesn’t mean kindness should take a backseat. Empathy and understanding go a long way in fostering loyalty and trust. It is important, therefore, to recognize achievements, whether big or small, and make time to connect with your team on a human level. From writing a personal thank-you note for a job well done to ensuring flexible working arrangements during challenging times, it’s often the little things that make the biggest difference.

Kindness isn’t a sign of weakness—it’s a powerful tool for building a resilient and loyal team.

5. Make Retention a Continuous Process

Retention isn’t a one-time initiative—it’s an ongoing commitment. Law is a people-centered business so embed employee well-being, recognition, and development into the core of your firm’s culture.

Create an environment where your people feel genuinely appreciated, understood, and aligned with the firm’s vision. By doing this, you’ll cultivate a culture of loyalty and stability, where your team thrives—and your clients benefit as a result.

Why Employees Stay

In a profession where your people are your greatest asset, putting them first is essential. A happy, engaged team isn’t just good for employee retention; it directly impacts client satisfaction and the firm’s reputation.

By investing in your employees, fostering connection, and leading with empathy, you can ensure your firm remains competitive, resilient, and ready to face the future with the best team by your side.

Commercial Legal Innovation

A Radical Idea: What if We Restructured the Insurance Industry for the Public Good?

By Reid Zeising |

The following was contributed by Reid Zeising, CEO & founder of Gain.

Health insurance and third-party liability insurance are public goods, yet the insurance industry is structured on a for-profit model, which focuses on increased profits and shareholder returns, often over the needs and welfare of policyholders and claimants. Today’s largest insurers, especially third-party liability carriers, reap over $100 billion in annual profits, [1] while premiums and costs are on the rise for those depending on the policies that they issue for their financial protection. The insurance industry has a moral responsibility and a duty as a corporate citizen to prioritize its policyholders and claimants. By transitioning to a public utility model, the industry can refocus its priorities without jeopardizing liability carrier’s needs to cover operating costs and pay shareholder returns. By thinking like – and actually being – a public utility, insurers can fulfill their duties as a provider of an essential public good without imperiling their own financial health.

Transitioning to a Public Utility Model

The insurance industry predominantly operates on a for-profit model, emphasizing profit maximization[2] and shareholder returns.[3] This model, however, often neglects the welfare of policyholders and claimants.[4] It also does not reflect the reality that health insurance and third-party liability insurance are public goods. A public good is a benefit or service that should be available to all citizens and that ultimately contributes to the wellbeing of society as a whole.[5] One proven and effective model for delivering public goods is the public utility company, which is privately owned by investors, but committed to the provision of public good. A public utility company oversees essential services, ensuring their accessibility, reliability, and affordability.[6] By restructuring third-party liability carriers along these lines, we can elevate the role of insurance carriers from profit-centric entities to institutions focused on consumer welfare.[7] Similar to utilities, carriers could receive a fixed, reasonable return,[8] enabling investments in increased technology and efficiencies and sustainability while preventing the accumulation of excessive profits at the expense of policyholders.

Benefits of the Public Utility Model

Enhanced Payouts: Transforming the current model would necessitate that carriers pay out all remaining premiums to claimants, after covering operational costs, guaranteed returns and dividends. This fundamental change would translate to increased payouts for claimants, alleviating their financial burden and ensuring adequate compensation. This contrasts with the present situation, where substantial portions of premiums are often reserved for investments and increased profit margins, limiting the resources allocated to claimants. The Affordable Care Act sought to cap profits by mandating that health insurance companies could spend no more than 20 percent of revenue from premiums on administrative costs, marketing, and profits. However, insurers have skirted these rules by increasing overall costs and raising premiums, boosting revenues.[9] Therefore, further reform, along the lines proposed here, is needed.

Industry Shift to Public Good: By orienting the industry towards the welfare of policyholders and the larger community, we can establish a new standard of corporate responsibility within insurance carriers. This alteration fosters a climate where the pursuit of public good[10] becomes inherent, eclipsing the erstwhile emphasis on profit maximization. Under this paradigm, carriers become stewards of societal welfare and financial responsibility, ensuring equitable distribution of resources and safeguarding policyholder interests.[11]

Policyholder Centric: In this reimagined model, policyholders would be the primary beneficiaries, receiving enhanced protections and services. This framework mandates a focus on policyholder needs and aspirations, catalyzing the development of consumer-centric policies and practices. Additionally, the compulsory dividend payouts would ensure that policyholders receive tangible, financial benefits, contributing to economic stability and welfare.

A More Equitable Economy: The proposed transition has profound economic implications, marking a departure from purely capitalistic orientations to a more balanced, equitable economic structure. The substantial increase in payouts would stimulate consumer spending and economic activity, while the emphasis on public good would promote social cohesion and mutual responsibility. Moreover, this shift would mitigate the socioeconomic disparities[12] emanating from the current profit-driven model, fostering a more inclusive and equitable economic environment.

Redefining the Insurance Industry

The transformation of the insurance industry -- particularly third-party liability carriers – into a public utility model is a radical yet necessary step towards creating an equitable and consumer-oriented industry. By guaranteeing returns and mandating the allocation of remaining premiums to claimants, we can ensure the industry serves the public good and prioritizes policyholder welfare. This transition is not merely a structural adjustment; it symbolizes a philosophical shift, redefining the purpose and responsibilities of insurance carriers in a way that recognizes that third-party liability insurance carriers are essential public goods. This revolutionary approach promises increased payouts, enhanced policyholder benefits, and a collective pursuit of societal well-being. The pivot from a profit-centric paradigm to a model centered on public welfare, where the interests of consumers are placed above unchecked profit accrual. In the long term, this alteration can be a catalyst for more claims being paid and funds being utilized for the purposes they were intended.  Insurance is in place to reimburse those who have suffered through no fault of their own, and a utility model can assure that more monies are paid to consumers and less goes into the coffers of companies beyond what is needed to service these portfolios.

[1] “Visualizing the 50 Most Profitable Insurance Companies in the U.S.,” HowMuch.net, https://howmuch.net/articles/top-50-most-profitable-us-insurance-companies-2020. Data is based on Fortune 500 listings.

[2] Elisabeth Rosenthal, “Insurance policy: How an industry shifted from protecting patients to seeking profit,” Stanford Medicine Magazine, May 19, 2017, https://stanmed.stanford.edu/how-health-insurance-changed-from-protecting-patients-to-seeking-profit/.

[3] Nathalia Bellizia, Davide Corradi, and Jürgen Bohrmann, “Profitable Growth Is King: The 2022 Insurance Value Creators Report,” Boston Consulting Group, September 2, 2022, https://www.bcg.com/publications/2022/insurance-total-stakeholder-return-value-creation-report/.

[4] Rosenthal, “Insurance policy.”

[5] National Consumer Law Center, Access to Utility Service, 6th ed. 2018, 1.1.5, www.nclc.org/library; Jason Fernando, “What Are Public Goods? Definition, How They Work, and Example,” Investopedia, March 20, 2022, https://www.investopedia.com/terms/p/public-good.asp.

[6] David E. McNabb, “Chapter 1: Public utilities: essential services, critical infrastructure,” in Social and Political Science 2016, October 28, 2016, 3-18, Elgar Online, https://www.elgaronline.com/display/9781785365522/chapter01.xhtml.

[7] Jonathan D. Washko, “It’s Time to Resurrect the Public Utility Model Concept–But This Time for Healthcare,” Journal of Emergency Medical Services, October 18, 2017, https://www.jems.com/news/it-s-time-to-resurrect-the-public-utility-model-concept-but-also-for-healthcare-this-time/.

[8] McNabb, “Chapter 1: Public utilities: essential services, critical infrastructure.”

[9] Marshall Allen, “Why Your Health Insurer Doesn't Care About Your Big Bills,” NPR, May 25, 2018, https://www.npr.org/sections/health-shots/2018/05/25/613685732/why-your-health-insurer-doesnt-care-about-your-big-bills.

[10] Samuel S. Flint, “Public Goods, Public Utilities, and the Public's Health,” Health & Social Work, Volume 36, Issue 1, February 2011, 75–77, https://academic.oup.com/hsw/article-abstract/36/1/75/659133?redirectedFrom=PDF.

[11] Carter Dredge and Stefan Scholtes, “The Health Care Utility Model: A Novel Approach to Doing Business,” NEJM Catalyst, July 8, 2021, https://catalyst.nejm.org/doi/full/10.1056/CAT.21.0189.

[12] Samuel L. Dickman, David U. Himmelstein, and Steffie Woolhandler, “Inequality and the health-care system in the USA,” America: Equity and Equality in Health 1, The Lancet, April 8, 2017, Volume 389, 1431-1441, https://www.thelancet.com/pb/assets/raw/Lancet/pdfs/US-equity-and-equality-in-health-1491475717627.pdf.