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Omni Bridgeway announces U.S. legal industry leaders appointed to its Investment Committee

Omni Bridgeway is pleased to welcome Leora Ben-Ami and the Honorable Winifred Y. Smith (Ret.) to its Investment Committee. These nationally regarded legal industry professionals bring decades of experience and a wealth of knowledge to Omni Bridgeway's investment process. Ms. Ben-Ami will leverage her extensive background in intellectual property to review and evaluate cases relevant to the company's global IP portfolio. Judge Smith joins the US Investment Committee, where she will consider a variety of complex commercial cases. Ms. Ben-Ami is a renowned intellectual property attorney with a focus on biotechnology, life sciences and pharmaceuticals. She has extensive trial experience as lead counsel including arguing before the U.S. Court of Appeals and within the Federal Circuit. In addition to taking on leadership roles at various AmLaw Global 200 firms, Ms. Ben-Ami sits on the board of the New York Intellectual Property Law Association. The Honorable Winifred Y. Smith (Ret.) is a distinguished jurist, having served on the bench of the Alameda County Superior Court for over two decades adjudicating complex civil litigation matters and numerous questions of first impression. She was selected as Presiding Judge in 2015-2016 and later retired following her service in the Complex Civil Litigation division. Judge Smith also lent her experience as a Justice Pro Tem for the California Court of Appeal, First Appellate District, Division Four. In 2021, she was awarded Trial Judge of the Year by the American Board of Trial Advocates. Prior to her career on the bench, Judge Smith was a Deputy Attorney General with the California Department of Justice's Office of the Attorney General for 26 years. "We are thrilled to have these top legal minds on our Investment Committee," said Matt Harrison, Managing Director and co-Chief Investment Officer for the US. "With the addition of Ms. Ben-Ami and Judge Smith, claimants, sophisticated litigators, and companies seeking dispute and litigation funding can be confident our investment process continues to establish the highest standards in the industry." Managing Director and co-Chief Investment Officer for the US, Jim Batson, said "We are delighted to welcome the decades of experience from Ms. Ben-Ami and Judge Smith. It is important to continue to add members to the Investment Committee who bring diversity of thought from a range of experiences and backgrounds." "Ms. Ben-Ami has the ideal background for our global portfolio of intellectual property matters. Her experiences as a practice leader and trial attorney give her a unique perspective which will be invaluable to our internal and external stakeholders," commented Sarah Tsou, Portfolio Manager - Global Intellectual Property and Senior Investment Manager.

Lansdowne Oil & Gas Exploring Funding for Claim Against Irish Government

Litigation and arbitration pursued against national governments has a mixed history, with successful claims brought where governments have harmed companies’ interests through unlawful action, such as the ongoing Sulu dispute. However, what is clear in many of these cases, is that litigation funders can play a powerful role in supporting individuals or companies to seek legal redress against the otherwise immense power of the state. An article in The Times highlights another potential example of litigation funders backing claims against national governments, as the exploration company Lansdowne Oil & Gas announced that it is in talks with funders over the possibility of financing a case against the Irish Government. The claim, which is being brought through international arbitration, alleges that the Irish government “failed to act in a fair and reasonable manner” under the Energy Charter Treaty (ECT), when it withdrew an exploration license for the Barryroe prospect. Lansdowne, which owns a 20 per cent stake in the prospect, announced that it had been approached by several funders and that early discussions were met “with positive feedback”. Lansdowne has enlisted Ashurst to lead the arbitration proceedings, with the law firm having provided a settlement offer that the Irish government must respond to within three months.  Eamon Ryan, Minister for the Environment, Climate and Communications, stated that the government had concerns about the “financial capability” of Lansdowne and Barryroe Offshore Energy, with the latter controlling the other 80 per cent stake in the prospect.

Legal Battle Between Burford and Sysco Ends as Both Parties Dismiss All Claims

Whilst funders and claimants almost always have a harmonious and mutually beneficial relationship, there are rare occasions where that partnership breaks down and contentious disputes emerge during the course of litigation. One such dispute that broke out in March of this year between Burford Capital and its client Sysco Corp has come to an end, with both parties mutually agreeing to drop all litigation and arbitration against one another. Reporting by Bloomberg Law provides insight into new court filings which have revealed that Burford and Sysco have dismissed all claims with prejudice, with neither party providing a comment or statement on this development. As for the original antitrust lawsuits Sysco had brought against poultry suppliers, the court filings reveal that all these claims have been assigned to Carina Ventures LLC, a Burford affiliate. The ongoing dispute between Burford and Sysco had proven to be a lightning rod for critics of litigation finance, as Sysco had alleged that Burford had blocked settlements in two lawsuits and seemingly accused the funder of unduly controlling the litigation. Burford had refuted these allegations and asserted that Sysco had violated the terms of the original funding agreement, thereby giving the funder the power of veto over the settlements.

TikTok Confirms it is Funding Users’ Lawsuit Against Montana

There are occasions when we see novel approaches to litigation financing, as has been demonstrated by a global social media company providing the financial backing for a lawsuit brought by its own users against the government. An article by The New York Times outlines a development in the case of five TikTok creators who filed a lawsuit against the state of Montana last month, alleging that Montana’s legislation banning TikTok violated their First Amendment rights. However, it has now been revealed in a statement by TikTok, that the company is covering the costs for this lawsuit, with spokeswoman Jodi Seth stating: “We support our creators in fighting for their constitutional rights.” The TikTok creators were approached by lawyers from Davis Wright Tremaine, who are now representing the claimants, and informed the individuals that TikTok would support them in both filing and funding the lawsuit. Ambika Kumar, partner and co-chair of Davis Wright Tremaine’s media law practice, pushed back on any suggestions that the social media giant’s involvement was an issue, arguing that “the fact that TikTok is paying for the suit is irrelevant to the legal merits of the case.”

Chambers & Partners Release its Litigation Support Guide for 2023

The Chambers & Partners rankings provide an annual guide to the top firms in each region and practice area, as well as highlighting the established industry leaders alongside the rising stars to watch in these companies. This week, Chambers & Partners released its Chambers Litigation Support Guide for 2023, which includes rankings for over 250 individual practitioners and more than 340 firms, including practice areas such as litigation funding, forensic accounting, business intelligence and investigations, and PR and communications. In the Global-wide ranking covering litigation funding for international arbitration, Chambers ranked Harbour, LCM, Therium, Burford Capital, Fortress Investment Group and Omni Bridgeway as Band 1 firms. Nivalion, Parabellum Capital, and Profile Investment were also recognized as strong funders in Band 2. Chambers also provided rankings by region with guides available for Australia, Canada, Europe, Latin America, the Middle East, South-East Asia, the United Kingdom, and the United States. Within the most active markets such as the UK and US, Chambers provides guides to firms specifically involved with litigation funding for insolvency or for litigation funding brokers. All the rankings can be accessed through the Chambers Litigation Support Guide hub.

Fair Pre-Settlement Funding – An Oxymoron or a Viable Alternative?

The following article was contributed by Julia DiCristofaro, program administrator at The Milestone Foundation. “I have a good client who is in need of pre-settlement funding, which I almost always advise against. But she is desperate, and this case will settle soon. Do you think you can help?” As program administrator of The Milestone Foundation, the only nonprofit providing pre-settlement funding to plaintiffs in need, I often hear this sentiment. Non-recourse, pre-settlement funding companies market themselves as quick cash options for plaintiffs who are awaiting their settlements.  It’s an easy lure for an individual who has undergone a catastrophic incident, one that has likely left them injured and unable to work, or facing mounting medical bills; someone who knows they will eventually receive a sum of money to live off of, but in the meantime, might not be able to afford groceries or rent. Pre-settlement funding, also referred to as litigation finance, has grown exponentially in the past decade and is now estimated to be a nine-figure industry. For many plaintiffs, this funding is a necessary lifeline to financially stay afloat as their case resolves. Yet, there are few regulations for this type of funding, often referred to as the “Wild West” of the lending industry. Murky contracts comprised of complex language, confusing terms, hidden fees, and complicated interest calculations are common features of these advances. When an individual is desperate to make ends meet, terms like “compounding interest,” “quarterly fees,” and “capped at three times the principal” fade into the background, as “cash in less than 24 hours,” “no credit checks,” and “if you don’t win your case, you don’t owe anything” catch their attention and provide a glimmer of hope. As many attorneys can attest, once a case settles and the payment is due to the lender, this lack of transparency often renders plaintiffs shocked to see that they now owe as much as $30,000 on the $10,000 advance they received. Plaintiffs can feel duped or betrayed, and oftentimes look to their attorneys to solve the problem by negotiating “haircuts” with the funder, or even waiving their own fees. An attorney practicing in New Mexico shared: “I had a client who recently received a $50,000 settlement. She owes $16,000 on a $5,000 advance she took out, and is panicking at how little money she’s actually going to receive. I think I am going to have to waive my fees on the case just to help her stay afloat.” It’s no wonder so many attorneys discourage their clients from taking these advances, though for many individuals, these funds are more critical now than ever. Plaintiffs have long been at a disadvantage when pursuing justice against deep-pocketed corporations that can make lowball offers in mediation, or await the time it takes to go in front of a jury. As with many facets of life, the Covid pandemic has played a role in shaping the civil justice landscape, as social distancing guidelines resulted in overloaded dockets and delayed court dates for civil cases. As a result, the advantage held by insurance companies and other defendants in personal injury cases has increased, as they continue to accept premiums and pay out less in settlements. Meanwhile, as government programs such as stimulus checks and eviction moratoriums expire, inflation continues to skyrocket, and savings dwindle, the majority of Americans are barely making ends meet; at the end of 2022, 64% of the U.S. population was living paycheck to paycheck, an increase from 61% in 2021 according to a recent LendingClub report. Much to the dismay of many experienced attorneys, these contrary factors - lengthened trial timelines and increased financial need - make non-recourse funding a necessary component of the civil litigation landscape. Given the oftentimes exploitative nature of non-recourse advances, many states have introduced legislation or enacted regulations to rein in the industry. For instance, in Colorado, some courts have voided or re-written individual litigation financing agreements as traditional loans subject to low-interest rate ceilings. While this helps plaintiffs avoid unfair and predatory rates, it also discourages many funders from assuming the risk that is inherent in non-recourse funding, leaving few options for these injured parties, who will then pressure their attorneys to settle their lawsuits – often to the detriment of their awards. Trade organizations such as The Alliance for Responsible Consumer Legal Funding (ARC) and American Legal Finance Association (ALFA), often lobby state legislatures to prevent restrictions on the litigation finance industry. They argue that the non-recourse nature of the lending requires their members to assume a high level of risk that justifies their practices, as the plaintiffs are only required to repay these advances using the proceeds from their lawsuit; in the instance of an unfavorable result, the lender does not recoup their advance. ARC states that they support legislation that “enacts robust consumer legal protection for consumer legal funding and maintains consumer access, because good legislation does both.” Both ARC and ALFA champion industry best practices and sponsor legislation to reflect these practices. ARC’s best practices range from recommending that contracts reflect all costs and fees - showing how much the consumer will owe every six months, and the maximum amount a provider may ever own of a recovery - to prohibiting attorneys from receiving referral fees or commissions from the companies their clients receive their funding from. To date, six states have enacted ARC-backed legislation, while other bills are being reviewed in states like Kansas and Rhode Island. While the activities undertaken by ARC and ALFA are adding regulatory measures to the industry, some might argue that they are not going as far as necessary to truly benefit plaintiffs who are utilizing this funding. Maximum payments and fees are listed in contracts, but they are generally not easily found on websites, making it difficult for plaintiffs to compare shops, or truly understand what they will owe until they go through the strenuous application and underwriting process. Additionally, these trade organizations do not make recommendations on interest rates or maximum repayment amounts, which enables their members to continue to charge exorbitant rates and fees. But that’s not to say there are no ethical lenders in the space. Some companies are instituting policies such as capping repayment amounts at two times the principal, offering advances with simple interest that is applied every six months, helping to identify government support, and introducing innovations like debit cards that enable borrowers to pay for basic necessities. Another viable alternative to unethical lending is The Milestone Foundation, formerly known as the Bairs Foundation, which was created six years ago to provide a plaintiff-focused option in the pre-litigation space. The only nonprofit providing low, simple interest pre-settlement advances, the foundation has helped more than 600 plaintiffs by advancing more than $4.8 million and is looking to expand its reach to serve more clients across the country. Steven Shapiro, partner at Ogborn Mihm LLP in Colorado, has seen firsthand the benefits, as well as the pitfalls, of pre-settlement funding. “My job as an attorney is to get my clients the award they deserve. If they don’t have the resources to pay their rent or buy their groceries, they are going to feel pressured to settle, and I won’t have the time I need to bring the case to a fair resolution.” Shapiro has at times seen clients with no alternative other than to take out advances with 30 to 40 percent interest rates; while painful at the time, these clients were able to see their cases through to a reasonable conclusion. He’s also seen The Milestone Foundation at work. He recounts his client Olga, a Russian-American woman disabled in a car accident, who was in need of funding. He referred her to The Milestone Foundation. “The foundation was able to provide Olga a reasonable advance at a reasonable rate, that enabled her to afford her living expenses for the duration of the case, which took about two years to settle and resulted in a seven-figure award. The contract was transparent and really the most wonderful thing. I would always opt to refer my clients to The Milestone Foundation rather than other lenders whose practices tend to be much more opaque.” While pre-settlement funding is often condemned by principled attorneys working to protect the best interests of their clients, ethical lenders like The Milestone Foundation are working to give the industry a new reputation. As the only nonprofit in the industry, The Milestone Foundation protects the interests of plaintiffs over profits, and hopes to inspire other entities to implement a similar approach toward pre-settlement funding.

IMN Announces Date for 2nd Annual Litigation Finance Forum in London

The Information Management Network (IMN) has announced the date for its 2nd Annual International Litigation Finance Forum, which will return to London on 19 October 2023. The event’s inaugural showing last year brought over 375 attendees together, representing senior executives from some of Europe’s leading funders, law firms, institutional investors and more. Along with the announcement of the date, IMN released the outline of the agenda for this year’s forum, with a wide variety of topics being covered across a full day of panel discussions and live Q&A. Recognizing the evolving discourse around litigation finance over the past year, this year’s conference will include a discussion on ‘Ethics, Disclosure, Regulation and Outside Equity Investments’ and a deep dive into ‘Tax Implications of Deal and Fund Structuring’. The sponsors for the 2023 event include Harbour Underwriting, Schulte Roth & Zabel, AON, the Consumer Attorney Marketing Group (CAMG), Factor Risk Management, and Exton Advisors. Those looking to attend the event are advised to register early, with Super Early Bird Registration being available until 25 August, with a discounted price of £895. To register for the event, click here.

Coinbase Scores Victory with Supreme Court Ruling on Federal Arbitration Act

Litigation Finance Journal recently reported that Coinbase became the first US-based cryptocurrency company to argue a case in front of the Supreme Court. The June decision has been announced, and with a 5-4 majority in favor of Coinbase, the high court ruled "that an interlocutory appeal about one matter (arbitrability) bars the district court from proceeding on another (the merits)." CoinDesk says the ruling is a distinct legal victory for Coinbase, one that could impact future lawsuits against all companies in the United States. For over a century, the Federal Arbitration Act (FAA) has been part of user agreements to protect corporations from risk and expense associated with court battles to resolve customer claims. The decision does not represent any high-court conclusions on cryptocurrencies, outside of Coinbase being one of the associated parties.   A lower court decision from the U.S. District Court for the Northern District of California denied Coinbase's arbitration agreement approach. On appeal, the Ninth Circuit denied Coinbase's motion to halt hearings while appeal is in progress.  The Supreme Court's decision in favor of Coinbase effectively stays any trial proceedings while appeal is in progress. 

Malaysian Government Acknowledges Need for Legitimate Litigation Funding Whilst Calling for Accountability 

The ongoing saga of the Sulu heirs arbitration case against the Malaysian government, which stands out as one of the high-profile cases of litigation funding in an international dispute, continues to evolve. After the Paris Court of Appeal ruled that the previous arbitral panel did not have jurisdiction to make its award, top officials from the Malaysian government have continued to speak in public about the perceived injustices of the arbitral process and the role that third-party litigation funding has played in it. An article by New Straits Times reports on the latest comments by Azalina Othman Said, a government minister for law and institutional reform, who continued to criticise the perceived failure of arbitrations and stated that "a strict code of ethics for arbitrators will cut any sham arbitration - that could go so far as to try to cripple sovereign nations - at its knees". Azalina also raised the issue of forum shopping, stating that claimants are able to do this and engage in an “endless pursuit” because “they are funded by a litigation fund with seemingly deep pockets and investors backing their pursuit.” In a separate interview with El País, Azalina Othman Said elaborated on her position regarding third-party funding and the need for more regulation of the practice, stating that whilst she appreciated there was a need for “legitimate funding”, it is also true that “there must also be accountability.” Regarding previous statements that the Malaysian government would pursue legal action against Therium for its role in funding the Sulu claimants, Azalina clarified that they were not threatening the funder, but if they find “an intention to subscribe to unlawful strategies or activities” then the government will “do what we need to do to defend our reputation.”