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Commercial Legal Innovation

The Legal 500 Releases 2024 Funder Rankings and Shares Industry Insights

Legalese has released the latest edition of The Legal 500 Litigation Funding – The UK and US Rankings for 2024, highlighting its top ten funders in the UK and top eight funders in the US. Legalese explains that the rankings are based on several factors, including areas such as: funder size and experience, volume and value of funded cases, transparency of operations, capital adequacy, and longevity. As part of the published rankings, Legalese also includes observations on the current state of the industry from senior leaders at the leading litigation funders, as well as from law firms who work with these funders. Speaking to the maturation of the industry, Richard Wise, disputes partner at Addleshaw Goddard, emphasised that “litigation funding is here to stay” but noted that it is also “going through a stage of evolution at the moment.” Looking from the insider’s perspective at how funders are evolving, Woodsford’s CEO, Steven Friel added that “some of the more successful players in the litigation funding field have diversified – acquiring or building complementary businesses.” Unsurprisingly, the hot topic of the Supreme Court’s PACCAR ruling was discussed, with Adrian Chopin, co-founder and managing director of Bench Walk Advisors, saying that the judgement is “slightly more than a storm in a teacup, but the sky has not fallen and nor will it fall.” Funder Rankings This year’s Tier 1 rankings for funders in the UK include Bench Walk Advisors, Harbour Litigation Funding, and Therium. While in the US, the three Tier 1 ranked funders are Burford, Omni Bridgeway, and Parabellum Capital. Bench Walk Advisors and Parabellum Capital are new entrants to the Tier 1 listing, having each previously been listed in their country’s Tier 2 rankings last year. There is one new addition to the UK rankings this year, as Asertis joins in Tier 3, having been listed as a ‘Funder to watch’ in the 2023 rankings. Asertis is highlighted for its expertise ‘in funding commercial disputes, with an emphasis on group actions, enforcement, and insolvency.’ There are no new additions to the US rankings this year, however, Lake Whillans Capital Partners has been removed from Tier 3 and is no longer present in the rankings. Individuals As was the case in 2023, the Legal 500 rankings still do not place individuals at these funders in a tiered structure. However, in a new addition to the 2024 rankings, it now includes a list of eight ‘industry leaders’ who are highlighted for their work in the industry:
  • Susan Dunn – Harbour Litigation Funding
  • Jonathan Barnes – Woodsford
  • Ayse Yazir – Bench Walk Advisors
  • Adrian Chopin – Bench Walk Advisors
  • Dai Wai Chin Feman -Parabellum
  • Neil Purslow – Therium
  • Patrick Meloney – LCM
  • Matthew Blumenstein – Statera Capital· 
In addition to these industry leaders, the write-ups for each funder includes mentions of key contacts at each company. The full 2024 UK and US Rankings for Litigation Funding can be found here.
Commercial

ALFA Launches Legal Finance Insights Podcast

In a post on LinkedIn, The Association of Litigation Funders of Australia (ALFA) announced that it has launched its own Legal Finance Insights podcast, with two episodes already live and available to listen to. The new in-house podcast is hosted by Pip Murphy, who serves as ALFA’s CEO and as a non-executive director and senior investment manager for CASL. The inaugural episode of the Legal Finance Insights podcast begins with Murphy providing an overview of ALFA’s structure and its mission, introducing ALFA’s members and associate members, along with the individuals that make up ALFA’s board. The podcast’s second episode sees Murphy joined by Maya Shallita, investment manager at Balance Legal Capital, as they offer an introduction to the world of litigation finance, explaining how the industry operates and the benefits it provides for both law firms and businesses. Future episodes of the podcast are set to feature ALFA’s members as they provide insights into “their experiences and what they are seeing, and predicting for the future of legal finance in Australia.” Episodes of the Legal Finance Insights podcast can be accessed through Spotify or Apple.
Announcements Commercial

Litica Broadens Global Reach with New Cologne Office in European Expansion

Litica, the leading ATE and litigation insurance provider, recently announced at the Annual International Litigation Finance Forum its expansion into Europe, with a new office in Cologne (Köln) Germany. Other offices include London UK and Sydney Australia, with further expansion in the coming months.  Litica has appointed Ed Yell to lead this expansion. As Managing Director of Litica Europe GmbH, Ed is responsible for developing litigation risk opportunities across the European Economic Area (EEA), working extensively with litigation finance providers, brokers, law firms and in-house counsel teams.   “Litica’s launch in Cologne was essential to ensure that we can offer a more efficient and focused solution to a rapidly growing European litigation finance market” – Ed Yell, Managing Director of Litica Europe GmbH.    As the world's leading ATE and litigation insurance provider, Litica is on a mission to empower access to justice in the 21st century. The company strives to provide comprehensive litigation-focused solutions and products  Key highlights: 
  • Established in 2019, Litica was founded and is led by qualified lawyers and financial services professionals, Stephen Bolster ACII and Steve Ruffle. 
  • The experienced in-house legal team has the largest number of legally trained underwriters in the market, with expertise stemming from prominent law firms and international litigation funders.  
  • Litica has attracted the largest panel of insurers (company and Lloyd’s markets) and is permitted to underwrite policies globally. 
  • Litica has provided over EUR €1bn in insurance capacity across a range of litigation & arbitration risks. Most litigation and arbitration case types being heard across the globe can be insured - from €25,000 defamation disputes to multi-billion-dollar class actions. 
  • Underlining Litica’s expertise in the field of litigation, Litica has recently been ranked ‘Band 1 – Litigation Insurance Underwriters 2023’ by Chambers and Partners, with Steve Ruffle and Ed Yell recognised as ‘Band 1’ in the individual category; Eliza Finch was recognised as a ‘WWL Thought Leader - Third Party Funding’; and Stephen Bolster as a ‘Lawdragon Global 100 Leaders in Litigation Finance’. Razi Mireskandari, the Managing Partner and Head of the Dispute Resolution team at Simons Muirhead & Burton (SMB), was recently announced as Litica's new non-executive director.
Case Developments Commercial

CAT Grants CPO Application in Apple Lawsuit, Pending Resolution of Funding Issues

In the aftermath of the Supreme Court’s PACCAR ruling on litigation funding agreements (LFAs), industry observers have been keen to see how lawsuits with pending applications before the Competition Appeal Tribunal (CAT) would be treated. In a new judgement released today, we are seeing signs that the CAT may be taking a pragmatic approach to the issue of funding, whilst still allowing meritorious proceedings to move forward. An article in Reuters provides an update on the case of Mr Justin Gutmann v Apple Inc., Apple Distribution International Limited, and Apple Retail UK Limited, as a CAT tribunal’s ruling granted the application for a collective proceedings order (CPO). The lawsuit, which sees Mr Gutmann acting as the proposed class representative (PCR), seeks to represent approximately 24 million consumers over a claim that Apple concealed battery issues with their iPhone products. The tribunal’s written judgement states that the ‘the requirements of a CPO are met in this case, subject to the resolution of the terms of funding.’ The issue of Mr Gutmann’s third-party funding arrangements were addressed earlier in the judgement’s introduction, with the tribunal noting that the PACCAR ruling raises issues ‘concerning the legality of the PCR’s funding arrangements.’ The tribunal went on to highlight that Mr Gutmann has already ‘indicated that he may need to alter his funding arrangements and he is actively pursuing his options.’ Whilst the judgement noted that neither party had asked the CAT to ‘make a ruling on the current or proposed new funding arrangements’, it also emphasised that the certification for the proceeding was provisional and still ‘subject to further submissions as to funding arrangements.’ In response to the CAT’s ruling, Apple referred back to a previous statement denying the allegations and categorically stating that the company “have never – and would never – do anything to intentionally shorten the life of any Apple product, or degrade the user experience to drive customer upgrades."  Mr Gutmann, who is being represented by law firm Charles Lyndon, described it as “a major step towards consumer justice." In a post on LinkedIn, Eleanor Leedham, of counsel at Charles Lyndon, stated that “the regime may still be in its infancy but rulings like this demonstrate that it is working, and it is a vital system for protecting consumers from abuse by tech behemoths and providing damages where they have suffered loss.”
Announcements Commercial People Moves

Ben Herbert Departs LFG for Miller Barondess

In a post on LinkedIn, Ben Herbert announced that he would be departing Law Finance Group (LFG) to take up a new role as partner and co-lead of the IP practice at Miller Barondess.  Commenting on the move in a press release from Miller Barondess, Herbert stated: “I’m thrilled to join the talented team at Miller Barondess, a firm renowned for excellence inside and outside the courtroom.  I look forward to helping build upon the firm’s strong track record of success, leveraging its capabilities to provide clients with exemplary service and sophisticated representation in the types of patent and trade secret matters I have focused on throughout my career.” Skip Miller, founding partner of Miller Barondess, stated that Herbert would be “instrumental in further expanding the firm’s IP practice.” Sasha Frid, also a founding partner of the firm, described Herbert as “a highly skilled and respected patent and technical trade secret litigator whose expertise will complement the capabilities of our IP team.” Herbert’s departure from LFG comes nearly a year after he joined the litigation funder, having spent the last 10 months leading LFG’s operations in Los Angeles originating new business, and underwriting LFG’s transactions and investments in IP litigation. Prior to joining LFG, Herbert spent over 10 years at Kirkland & Ellis, where he was also a partner in the firm’s intellectual property litigation group.
Commercial Regulatory Issues

Law Professor Argues Some Funders ‘Will Never Be Passive Partners’

Debates over the role of third-party litigation funding have grown increasingly contentious over recent years, with interest groups and policymakers wading into the discussion with assertions that funders operate in the dark and have exerted control over litigation processes and outcomes. A new academic essay dives into this topic with renewed focus, offering an assessment of the current funding landscape and specifically highlighting the role of ‘opaque capital’ as an aggressive and chaotic force in the funding of torts. In an article published in Volume 133 of The Yale Law Forum, Samir D. Parikh, professor of law at the Lewis & Clark Law School, examines the relationship between ‘opaque capital and mass-tort financing,’ and the dangers that third-party funding may pose to mass torts. In the essay, he starts from the position that litigation funders ‘will never be passive partners,’ because ‘all the tools necessary for a financier to create and control a mass-tort case are available and unregulated.’  At the heart of Parikh’s paper is the idea of the ‘Alchemist’s Inversion’, which he describes as ‘the process of employing unethical and potentially illegal tactics to create, enhance, and marshal apparently low-value claims with the hope of turning them into gold.’ Whilst he is quick to emphasise that this kind of behaviour is not currently widespread among funders, he suggests that lessons can be learned from the actions of opaque financiers in other markets and that ‘recent cases demonstrate that the arsenal is available, and deployment is underway.’  In his examination of the funding market, Parikh separates third-party financiers into three types: dedicated, sporadic, and opaque capital.  The ‘dedicated funder’ category encompasses the major litigation funders who have ‘an arguably transparent business model and willingness to engage in public debate about litigation finance.’ Parikh’s ‘sporadic funders’ are categorised as smaller players who operate less systematically, often focusing on smaller lawsuits such as personal-injury claims, and who only ‘receive public scrutiny only when they engage in some sort of malfeasance or unethical conduct.’  Most worrying to Parikh are the ‘opaque capital’ financiers, a group of ‘aggressive hedge funds and private-equity firms’ whose ‘chase for yield requires direct engagement in high-stakes, big-ticket disputes.’ He argues that these opaque funders are notable for their desire to increase their control over the outcome of litigation by ‘exerting leverage at each process point’, with a relationship between the funder and claimant which ‘allows clandestine maneuvering and influence that could undermine cases and litigants in unforeseen ways.’ The rest of the article provides an analysis of how these funders ‘can create chaos in this space’, looking at various case studies and examples to argue that ‘creation and control are the governing dynamics.’ Whilst Parikh describes the article as ‘a primarily descriptive treatment in order to spotlight the challenges posed by opaque capital,’ he concludes by suggesting that it also shows the need for reform and the introduction of measures to ensure greater oversight of funder activities. He puts forward the idea that such proposals could include enhanced disclosure requirements for funding arrangements, introducing ‘a fee to file a claim’, as well as reforms to the ‘regulation of claims marshalling’ and ‘the ways courts and attorneys verify claims. The essay can be read in full here.
Announcements Commercial People Moves

Omni Bridgeway More Than Doubles the Size of its London Investment Team

Omni Bridgeway is pleased to announce a substantial expansion of its operations in the UK with the addition of six individuals in London, bringing the total team to 11. All the new hires have significant experience in legal finance. Gian Kull joins as Regional Portfolio Manager for the UK and Senior Investment Manager and will oversee the origination and management of investments in the UK. Gian joins Omni Bridgeway from a UK-based global litigation funder where he was Chief Investment Officer. Prior to this, Gian was with Syz Capital in Zürich, where he led the build-out of a legal assets investment platform focused on litigation funding and law firm lending. Gian is joined by Investment Managers Simon Latham, Sean McGuiness, Andrew Roberts and Michael Taggart. With experience across commercial litigation funding and international arbitration, the group brings particular bench strength in competition disputes, collective redress, large-scale insolvencies, shareholder claims, offshore litigation and recovery, and sector-focused experience in infrastructure, energy and construction, among others.  "Omni Bridgeway is the world's leading funder and these appointments solidify our position," notes Raymond van Hulst, Managing Director and CEO. "These experienced new hires bring further track record to the high-calibre team we already have in London. At a time when funding options in the UK market have been reducing significantly, Omni Bridgeway is increasing its commitment and presence," he continues. "With over three decades of experience – and our footprint and operations in 26 international markets – Omni Bridgeway remains the only funder to have global originating and funding capability." The team augments Omni Bridgeway's slate of industry veterans: seasoned investment team members Alistair Croft, Camilla Godman, and Mark Wells, former founding partner of Calunius Capital who recently joined the company as Global Head of Portfolio Management. The team is rounded out by senior business development and marketing professionals Sarah Glover (formerly Burford Capital) and Steven Savage, who joined from Woodsford last month. "Collectively, the London team bring decades of funding industry experience," remarks Managing Director and Chief Investment Officer EMEA, Hannah van Roessel. "Omni Bridgeway is now even better positioned in the UK to provide on-the-ground resources and expertise for merits and enforcement funding across all types of disputes." Gian Kull concluded, "It's exciting to be leading the efforts for one of the world's top funders in such a key market for disputes funding. We are joining a highly respected team – it is strength building on strength. The quality of our combined team and the resources we can deploy will enable us to quickly deliver legal finance solutions to companies, law firms and their clients." ABOUT OMNI BRIDGEWAY Omni Bridgeway is the global leader in legal finance and risk management, including dispute and litigation finance from case inception to post-judgment enforcement and recovery. Listed on the ASX, Omni Bridgeway operates from 26 international locations.
Consumer

Funder Loses Appeal Over NFL Concussion Settlement Distribution

One of the biggest stories in sports law over recent years has been the claim that current and former players in contact sports, such as American Football, are owed compensation for concussion injuries. However, even in one of the most high profile victories for this type of claim, it seems that the involvement of funders has led to ongoing disputes about the way in which settlements have been distributed. Reporting by Reuters details last Friday’s decision by the 3rd U.S. Circuit Court of Appeals in Philadelphia, which dismissed Thrivest Specialty Funding’s appeal to intervene in a previous District Court ruling over the way settlements were paid out to individuals in the NFL concussion litigation. Thrivest, which now operates as Balanced Bridge Funding, argued that ‘the District Court is improperly administering the settlement in a manner adverse to its interests,’ because the ‘Funder Rules’ allowed for the NFL players to receive settlement payments directly rather than through their lawyers. Thrivest had previously moved to have the District Court change these rules in 2022, with the funder having cited at least two examples of players who had ‘received a direct settlement payout, and dissipated the proceeds without repaying Thrivest.’ In a 2-1 decision, the Court of Appeals panel rejected Thrivest’s argument that the District Court’s Funder Rules ‘amount to a substantive ruling that all third-party cash agreements are invalid’, describing the claim as ‘patently incorrect.’ It went on to state that ‘the Rules simply distribute funds in a particular way: directly to class members instead of through counsel,’ and that ‘Thrivest remains free to pursue a collection action.’  In what reads as a particularly damning final statement on Thrivest’s second argument that the Rules allow class members to avoid paying the funder, the panel said: ‘Put differently, it does not like the “particular way” the claims administrator is distributing funds to class members and would prefer a different method.’ As LFJ reported in November 2021, this is not the first time that Thrivest’s involvement in the NFL concussion litigation has led to subsequent disputes.
Case Developments Commercial

Camp Lejeune Litigation Attracting Growing Numbers of Fraudulent Claims

As LFJ reported in July 2023, the interest in litigation stemming from the Camp Lejeune toxic water scandal has been consistently on the rise, as a combination of legal advertising and litigation funding are contributing to what may become one of the largest mass tort cases in US history. However, the tremendous amount of attention focused on these lawsuits is now turning into a double-edged sword, as skyrocketing numbers of fraudulent claims are coming to light. An article by Bloomberg provides an in-depth overview of reports that the Camp Lejeune case is becoming a magnet for false claims, with huge numbers of robocalls and a lack of due diligence from lawyers referring cases has led to a dramatic rise in the number of fraudulent attempts to file a claim. Mikal Watts, capital partner at Watts Guerra, revealed that his firm already has 6,000 Camp Lejeune clients and that whilst auditing referrals from other lawyers, they found hundreds of bogus claims including individuals who had been specifically recruited by call centers. As Bloomberg had previously reported earlier this year, the Camp Lejeune litigation has attracted almost $2 billion in litigation funding, as funders see the strong potential of returns in a case where the settlements are guaranteed by the government. Brian Roth, CEO of Rocade Capital, spoke to Bloomberg about this surge in fraudulent claims and aptly noted that in these situations, “an influx of capital invites greed.” Roth put the spotlight on bad-faith legal marketing companies, explaining that “where you have issues is when you have leads being marketed to multiple different buyers, you have call centers without oversight.”   Driven by the government-approved payout scheme, Bloomberg confirmed from a Navy spokesperson that they had already received 117,000 claims by mid-October. All of these claims will have to be individually vetted by the Navy, but with the window to submit claims open until August 2024, the vetting required to verify each claim will likely lead to an incredibly protracted process. In the meantime, law firms representing clients in Camp Lejeune litigation will have to devote a large amount of time and resources to due-diligence when vetting new potential claimants.