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The LFJ Podcast
Hosted By Yoav Navon |
In this episode, we speak with Yoav Navon, Co-Founder and Chief Investment Officer of Nemesis Litigation Funding, a blockchain-focused litigation funding firm. Yoav discusses his background in litigation funding and why he launched a blockchain-focused fund, the opportunities and challenges that exist for funders in the blockchain sector, how he addresses the collectability concern, what we can expect from crypto litigation in the future, and much more. [podcast_episode episode="11351" content="title,player,details"]
Commercial

Increased Use of Litigation Funding in Cross-Border M&A Disputes

Litigation funding continues to see wider acceptance and adoption by claimants in a wide variety of disputes, with funders bringing capital and expertise and experience in complex litigation to the table. Recent research by Dentons Canada has supported this and found that in the world of cross-border post-M&A disputes, litigation funding services are increasingly being retained by claimants and law firms. In a new video, Rachel Howie and Matthew Diskin of Dentons Canada discuss the firm’s latest survey which interviewed 150 senior executives involved in cross-border and global M&A transactions. The findings demonstrate that the use of third-party funding is on the rise, with 65% of respondents in the US & Canada stating they have engaged the services of a funder in the last 12 months. Speaking to the reasons for the uptick in the use of litigation funding, Diskin points to the rising costs of disputes and pressure on legal budgets, which allows funders to position themselves as a useful tool to share the risks and the financial burden when pursuing claims which are otherwise prohibitively expensive. Diskin also notes that the use of outside funding is even becoming more prevalent among companies with strong balance sheets and cash flows.  As for the benefits funders can provide outside of the actual financing, Diskin argues that funders are very attuned to spotting the issues that can arise in these claims, and that through their due diligence processes, funders can assess both the merits of the claim and the viability of any future recovery. Being able to assess whether there is a sound theory of the case and a suitable recovery plan allows all parties involved in these high-value disputes to significantly reduce their risk.
Case Developments Commercial

Piper Alderman and Omni Bridgeway File Class Action Against IG Markets Over CFD Products

Recent decades have seen an increase in the scope of retail investing, with advances in technology allowing individuals to trade increasingly complex investment products. However, failures by financial services firms to adequately protect consumers from the risks of this type of investing have prompted lawsuits against these same firms, as a new class action in Australia is once again demonstrating. Reporting in Lawyers Weekly details the launch of official proceedings in a class action brought on behalf of up to 20,000 Australian investors against IG Markets, over allegations that it marketed contracts for difference (CFDs) to investors without properly detailing the risks, and without proper assessment of these investors’ ability to undertake such trades. The class action was first announced in October of last year, and following months of investigations, proceedings have begun in the Victorian Registry of the Federal Court of Australia. The class action is led by Piper Alderman and is being funded by Omni Bridgeway, which revealed in a joint statement that they have already registered hundreds of individuals for the class action. Kate Sambrook, partner at Piper Alderman, stated that these CFDs “should never have been marketed to everyday Australian investors who had little or no experience in trading such complex products.” Justice Jonathan Beach of the Federal Court of Australia, has previously described these CFD products as “financial heroin hits”.
Announcements Commercial People Moves

Burford Capital Expands European Footprint

Burford Capital, the leading global finance and asset management firm focused on law, today announces that it has expanded its European footprint while also continuing to add leading legal talent to its global operation. Expanded client demand for offerings such as corporate monetization and law firm portfolio financing, combined with a greater desire and need for legal finance in Europe due to legislative changes related to collective redress, have resulted in Burford’s continued growth. In Europe, Burford now has an on-the-ground presence in London, Frankfurt, Zug, Paris, Rome and Stockholm.

Changes to Burford’s European operation include:

  • Burford veterans Michael Redman and Daniel Hall now serve as co-heads of EMEA: Mr. Redman leads Burford’s London office, and as previously announced, Mr. Hall leads Burford’s new office in Dubai.
  • Philipp Leibfried has taken on the role of Head of Europe and will continue to implement Burford’s European growth strategy, actively engaging with law firms and companies across continental Europe.
  • Swiss-based Dr. Jörn Eschment has been promoted to Director and will continue to lead Burford’s business in the DACH region of Germany, Austria, Switzerland and Liechtenstein.
  • Dr. Luca Weskott has joined Burford as a Vice President based in Frankfurt, Germany, and will originate and manage investments in the DACH region. He joins Burford from leading German law firm Hengeler Mueller’s Dispute Resolution practice.

Christopher Bogart, CEO of Burford Capital, said: “As the global industry leader, Burford is constantly evolving to meet our clients’ needs. We continue to add the best and brightest talent company-wide, because that’s the basis not only for growth but for developing strong and lasting client relationships. And I’m especially pleased that as we hire new global talent, we’re also promoting our existing talent into leadership positions.”

Philipp Leibfried, Burford Capital’s Head of Europe, said: “While Burford has always had a significant presence in both the UK and in Europe, with 47 staff now in London, we are also dedicating additional resources to Europe to match growing demand on the continent. From the UK to the DACH region, France, Italy, Sweden and more, we are committed to serving our clients. We look forward to meeting demand from European law firms in areas such as collective redress, securities claims and competition-related litigation, in addition to more award and judgment monetization work with our corporate clients.”

The composition of Burford’s global team as of May 11, 2023 of more than 150 employees – and more than 60 of whom are lawyers – reflects its category leadership as well as its commitment to diversity, equity and inclusion, as half of Burford’s team are women, racial minorities or self-identify as LGBTQ+.

Since its last hiring announcement in November 2021, Burford has expanded its industry-leading global team, including the following senior employees:

Experienced leaders join as Treasurer and Chief Compliance Officer

  • Juan Jimenez, CFA, is Treasurer, based in New York, with responsibility for overseeing all activities and risks related to liquidity and cash management, funding, currency and interest rates, as well as managing relationships with rating agencies. Mr. Jimenez most recently worked as Director of Corporate Treasury at Colgate-Palmolive.
  • Monika Singh, IACCP®, is Chief Compliance Officer, based in Chicago, responsible for overseeing and managing Burford’s compliance with all applicable regulatory, internal policy and procedural requirements. Ms. Singh has over a decade of experience in compliance management. Prior to joining Burford, Ms. Singh was Chief Compliance Officer at 50 South Capital Advisors.

Additional growth of Burford’s industry-leading investment team

  • Christopher Dore is a Director in Chicago with responsibility for overseeing Burford’s underwriting of and investment activity in nationwide consolidated litigation and other complex commercial matters. Mr. Dore was previously Partner-in-Charge of case development, investigations and client acquisition at Edelson PC.
  • Charles Griffin is a Vice President in New York responsible for evaluating and executing new investment opportunities and overseeing investments in Burford’s portfolio. Prior to joining Burford, Mr. Griffin was a litigator at Wachtell, Lipton, Rosen & Katz.
  • Victoria Fox is a Vice President in London focused on commercial litigation, asset recovery and enforcement. Prior to joining Burford, Ms. Fox was a litigator at Stephenson Harwood.
  • Charlie Rooke is a Vice President in London with a focus on complex commercial and competition litigation matters in the UK and Europe. Mr. Rooke was previously a Senior Counsel at the Royal Bank of Canada.

Business origination team adds top industry experts

  • Patrick Dempsey is a Director in New York responsible for originating new business with US law firms and companies. Mr. Dempsey was previously the US Chief Investment Officer and a Board Member at Therium Capital Management.
  • Jonathan Owen is a Vice President in California with responsibility for originating new business with US law firms and companies. Prior to joining Burford, Mr. Owen was a Funding Director at Law Finance Group.

Top global legal talent joins the business

  • Shreya Gulati is Corporate Counsel in New York with a focus on Burford’s investments in the U.S. Prior to joining Burford, Ms. Gulati was an Associate at Weil, Gotshal & Manges.
  • Richard Lee is Corporate Counsel in London with responsibility for overseeing Burford’s investments in the UK, EMEA and Asia. Prior to joining Burford, Mr. Lee was a Managing Associate at Linklaters.
  • Anastasiya Lisovskaya is Corporate Counsel in New York responsible for the legal processes around Burford’s reporting obligations and compliance with securities laws. Ms. Lisovskaya was previously a Senior Corporate Associate at Paul, Weiss, Rifkind, Wharton & Garrison.
  • Richard McGarry is Counsel in London with responsibility for leading Burford’s compliance program in the UK, Europe and Asia-Pacific. Mr. McGarry was previously a Managing Associate in Addleshaw Goddard’s Global Investigations team.

About Burford Capital

Burford Capital is the leading global finance and asset management firm focused on law. Its businesses include litigation finance and risk management, asset recovery and a wide range of legal finance and advisory activities. Burford is publicly traded on the New York Stock Exchange (NYSE: BUR) and the London Stock Exchange (LSE: BUR), and it works with companies and law firms around the world from its offices in New York, London, Chicago, Washington, DC, Singapore, Sydney, Hong Kong and Dubai.

For more information, please visit www.burfordcapital.com.

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Commercial Legal Innovation

Spear’s Names Top Litigation Funders for High-Net-Worth Individuals

Litigation funders are increasingly offering their services to a wider range of clients, providing capital and expertise to everyone from individuals to startup business and larger corporates. One market niche where funders can prove to be particularly impactful is in the realm of litigation services for high-net-worth (HNW) individuals, especially when it comes to divorce proceedings. A new index published by Spear’s, the wealth management and luxury lifestyle publication, provides a ranking of the top litigation funding professionals that provide services to HNW individuals. The list includes 15 individuals who are ranked as ‘Top Recommended’ by Spear’s, along with one individual who is listed as a ‘Rising Star’ in the field. These individuals are also sorted by their areas of focus, which includes categories such as family law funding, offshore finance, and matrimonial and private client.  The 15 Top Recommended individuals include senior executives from the following industry-leading funders: Burford Capital, Harbour Litigation Funding, Level, Rhea Family Finance, Schneider Financial Solutions, Therium and Woodsford. Max Austin-Little, director at Level, is identified as a Rising Star in litigation funding, having been highlighted for his expertise in ‘financial remedy proceedings as well as contentious private wealth and probate cases.’
Commercial Deals

Italian Funder LexCapital Signs Agreement with Association Representing Local Authorities

There has been a lot of discussion lately around the use of portfolio litigation funding, and the wider partnership between funders and clients to provide capital for a range of litigation activities. A new example of this approach has appeared in Europe, where a startup Italian funder has signed an agreement with a local association to provide funding for litigation on behalf of its partner institutions. The announcement shared on Legalcommunity.it provides the details on LexCapital’s new agreement with Asmel (Associazione per la Sussidiarietà e la Modernizzazione degli Enti Locali), an association focused on the modernization of local authorities in Italy. The agreement will allow Asmel’s 4,100 partnered institutions to cut costs by giving LexCapital the litigation rights for active disputes, with any financial awards being shared between the local municipality and the funder. Speaking to the benefits of this new partnership, LexCapital’s chief operating officer, Giuseppe Farchione, stated that by taking on the litigation costs, this agreement will allow the local authorities to focus their own resources more efficiently, and also benefit from LexCapital’s technical expertise in litigation. Francesco Pinto, general secretary of Asmel, said that this agreement represents an innovative formula and will provide financial assistance to its partners, whilst also hopefully increasing their rate of success in these lawsuits.
Commercial Legal Innovation

NuGenesis Seeks Litigation Funding for Claim Against FTX

NuGenesis (the purveyor of NuCoin), is reported to be exploring AI and litigation finance as investment tools in claims against  FTX and Alameda Research’s alleged fraud.  Cointelegraph characterizes NuGenesis as a well respected source for quality innovation in the digital asset ecosystem. After NuCoin was attacked by FTX, executives at NuGenesis began to employ AI technology to digest what could be happening behind the scenes at Alameda and the Japanese arm of FTX.  Touted as 'groundbreaking' by Cointelegraph, NuGenesis' crypto fraud detection software has been instrumental in uncovering alleged inconsistencies of fiduciary duty across FTX's global enterprise. NuCoin is said to have tallied almost $55B in potential damages associated with potential FTX scams against the token.  The FTX saga could yield new opportunities for litigation financiers in the crypto litigation space. As an added bonus, we have included 185 highlights to the Office of Legal Education's "Prosecuting Computer Crimes" handbook for reference. 
Commercial Deals

Spain Offers Opportunities for Litigation Funders as ‘Gateway to the Latin American Market’

Whilst the UK, US and Australia remain the most established markets for litigation funding, jurisdictions across Europe are shaping up to be increasingly valuable prospects for funders to pursue. In a new feature, one funder suggests that Spain has a bright future, not only through its domestic market, but also through its ties to the wider Latin American region. In an interview with Leaders League, Paloma Castro, senior legal counsel at Deminor, discusses the current state of litigation finance and the potential for Spain to become an increasingly active market for third-party funding. Castro points to the ongoing economic instability, rising inflation and low growth as key drivers for a global increase in the demand for litigation funding, as companies will be in need of outside capital to fund meritorious litigation. Looking at the Spanish market, Castro argues that the country has great potential to evolve into an attractive market for litigation funders, standing out as the fourth largest economy in the European Union. Beyond its economic clout, Castro also suggests that Spain benefits from ‘a robust legal system that guarantees legal certainty’, which could lower risk for interested funders.  Beyond its domestic market, Castro highlights Spain as ‘the gateway to the Latin American market’, which is another region that funders will be keen to explore given its predisposition to resolving disputes through arbitration.
Commercial Regulatory Issues

Former MP Argues for Increased Regulation of Funders Involved in Collective Actions

Whilst the current collective action regime has been viewed as a net positive for law firms and litigation funders in the UK, there are outside observers who argue that the current system benefits these players more than the consumers and organizations represented in the legal actions. In a new article published in Conservative Home, the chief executive of Fair Civil Justice and former Member of Parliament (MP), Seema Kennedy, argues that the current collective actions regime has created an environment in which ‘law firms and litigation funders profit from consumers who have suffered harm.’ Kennedy argues that it is these two groups who have benefited most from the changes to collective actions following the Consumer Rights Act 2015, each seeking to maximize financial returns from these claims. Kennedy highlights the example of the Horizon IT claim, which saw former postmasters awarded a £43 million judgement, only for a significant share of this award to cover the legal fees and funding costs. Kennedy suggests that if the current system is allowed to continue, it will lead to the UK’s businesses suffering from what she describes as: the United States’ ‘aggressive profit-driven litigation culture’. To address the perceived imbalance in incentives, Kennedy recommends that the UK government consider mirroring other jurisdictions, such as the EU, which increases regulation around litigation funding. Kennedy argues that the current system of self-regulation under the Association of Litigation Funders (ALF) is ineffective, and that without stricter regulation, the interests of funders will be placed ahead of those of consumers seeking access to justice in the first place.