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Commercial Regulatory Issues

Irish Legislature Publishes Draft Amendments Legalizing Third-Party Funding for International Arbitration

With 2023 set to be an important year for regulatory developments in the litigation funding industry, an early sign of progress has emerged in Europe. Whilst the European Union may still be in the process of examining tighter restrictions and oversight of third-party funding, Ireland has moved another step closer to legalize certain types of legal funding. In an article on Lexology, Nicola Dunleavy and April McClements, partners at Matheson LLP, have examined the draft rules concerning third-party funding of international arbitration in the Irish legislature’s Courts and Civil Law Bill. The amendments in the bill would mean that dispute resolution proceedings are exempt from the prohibition on maintenance and champerty. This would include international commercial arbitration matters, and any court, mediation or reconciliation proceedings as a result of such arbitration. Dunleavy and McClements note that the amendments would ensure that funding agreements for these types of proceedings would also be legal, although it is expected that additional criteria for these agreements will be set out by the government. As the draft legislation is currently at the committee stage, it is not known how soon the bill could become law, but the authors suggest that this could happen by the end of Q1.
The LFJ Podcast
Hosted By Siltstone Capital |
Our guests today are Mani Walia and Robert Le of Silstone Capital. Siltstone is an alternative asset investor that hosts an annual conference in Houston, Texas called LitFinCon. The 2nd annual LitFinCon will take place March 1st and 2nd, 2023, and will bring together stakeholders from across the litigation funding sector to network and share ideas and best practices. More information can be found here. [podcast_episode episode="10817" content="title,player,details"]
Case Developments Commercial

Law Firm Continues to Fight $1.8 Million Award to Woodsford

An ongoing dispute between a funder and law firm continues, as Hosie Rice lodges objections to a US Magistrate Judge’s recommendation that Woodsford receive a $1.8 million award. This follows on from LFJ’s reporting last month that the Magistrate Judge Sherry Fallon had recommended the federal district court in Delaware confirm the award to Woodsford. Reporting by Legal Newsline illuminates the latest development in the dispute, as Spencer Hosie and Diane Rice, partners at Hosie Rice, filed their objections to Judge Fallon’s recommendations. Hosie Rice had originally brought the dispute to federal court after an arbitration panel had ruled that the firm owed Woodsford $1.8 million. Hosie Rice maintains that the arbitration panel had erred when it classified the two partners as guarantors rather than co-borrowers, and that the panel had “rewrote the plain meaning of the law firm funding agreement (LFFA).” The ultimate decision as to whether the award will be confirmed will still rest with Judge Colm Connolly of the District Court of Delaware.
Announcements Consumer

Legal-Bay Pre-Settlement Funding Announces Uptick in Wrongful Termination Cases Due to Sexual Harassment and Discrimination Awareness

Legal-Bay LLC, The Pre Settlement Funding Company, reports today that a large portion of their pre-settlement cash advance funding capital will be directed toward victims of wrongful unemployment. Legal-Bay has vast experience with unlawful termination lawsuits related to sexual harassment and retaliation as well as racial, gender, or age-related discrimination. Based on recent court case trends, Legal-Bay anticipates even more wrongful termination lawsuit filings to come. Legal-Bay delivers financial assistance to people who've recently found themselves wrongfully unemployed, providing cash advances to plaintiffs while their cases are tied up in litigation.  The service is a huge help for people dealing with the financial strain of lost pay or benefits, not to mention the emotional stress of being let go due to a situation you had no control over. Chris Janish, CEO, commented on the company's focus of assisting plaintiffs in similar situations, "As the world has changed with the #MeToo movement, we continue to see more wrongful termination lawsuits and settlement values at higher levels than in the past. Many victims are unable to get new jobs, and sometimes a cash advance from Legal-Bay is the only way to pay the bills." If you're an attorney or plaintiff in an ongoing wrongful termination, sexual abuse, sexual harassment, retaliation, racial, age, or gender discrimination lawsuit and require an immediate cash advance from your case, please visit our website HERE or call 877.571.0405. Legal-Bay's settlement loan programs can offer immediate cash in advance of a plaintiff's anticipated monetary award. The non-recourse lawsuit loans—sometimes referred to as loans for lawsuit or loans on settlement—are risk-free, as the money doesn't need to be repaid should the recipient lose their case. Therefore, the law suit loans aren't really a loan, but rather a cash advance. Legal-Bay has some of the quickest turnaround in the industry, normally getting plaintiffs cash-in-hand within 48-hours of filing an application. If you require money now, please visit the company's website HERE or call 877.571.0405 where skilled agents are standing by.
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Commercial Deals

Litigation Funders Driving Anti-Competitive Class Actions in UK

Following on from LFJ’s reporting last week that highlighted new research which demonstrated the growth of class actions in the U.S., similar trends are also taking hold in the UK, according to an upcoming study by Thomson Reuters. At the heart of this rise in the volume and value of class actions in Britain is the presence of a well-capitalized funding industry, combined with high-profile targets in the form of technology multinationals. An article by City A.M. places a spotlight on new research by Thomson Reuters, which examines class action activity in the UK last year and found anti-competition claims against global tech leaders to be a growing feature of the industry. The research found that the number of anti-competitive claims rose from six to eight, between 2021 and 2022, whilst the value of these claims skyrocketed from £4 billion to £26 billion in the same period. These high-value claims included actions brought against the likes of Google and Sony, with the UK’s reformed rules allowing for opt-out claims being identified as another catalyst. Thomson Reuters’ Warsha Kalé also pinpointed the litigation funding industry in the UK as playing a key role in this growth, indicating that funders still have plenty of capital to deploy, and have shown a willingness to take on these high-profile actions to hold these corporate giants to account.
Announcements Commercial

LITFINCON II: The Premier Litigation Finance Conference Announces Judicial Panel

Described by Above the Law as the “showcase for some of the most nuanced, content-packed discussion on litigation finance,” LITFINCON II returns to the Post Oak Hotel in Houston on March 1-2, 2023.

LITFINCON II is thrilled to announce that four distinguished jurists will participate in its featured Judicial Panel:

  • The Honorable Alan Albright of the United States District Court for the Western District of Texas
  • The Honorable Nancy Atlas retired United States District Court for the Southern District Court of Texas
  • The Honorable Mike Engelhart of the 151st Civil District Court in Harris County
  • The Honorable Charles Eskridge of the United States District Court for the Southern District Court of Texas.

“As a litigation funder, we are honored to provide the platform and resources to help trial lawyers and litigants achieve justice. Our ultimate mission is to continue the advancement of an emerging asset class by educating and promoting the best practices in litigation finance at LITFINCON II,” says Mani Walia, Managing Partner & General Counsel at Siltstone Capital.

In addition to the judicial panel, we are excited to announce that there will be a new academic panel featuring the nation’s leading scholars at LITFINCON II this year. We look forward to a wide-ranging discussion about the impact of litigation finance in the U.S. and abroad.

LITFINCON II is grateful for the early support from several high-profile organizations in the litigation finance industry. Confirmed initial sponsors for LITFINCON II include Certum Group, CAC Specialty, Schulte Roth & Zabel, Kerberos Capital Management, Gerchen Capital Partners, Curiam, D.E. Shaw & Co., Arran Capital, Aon, Filevine, Dunning Rievman & MacDonald, Omni Bridgeway, 4 Rivers Legal, Soryn IP Capital Management, Willis Towers Watson, and Calumet Capital.

Siltstone Capital, the host of LITFINCON II, is a premier investment firm that provides capital solutions to litigants, law firms, and legal departments to help resolve their real-world legal issues and create significant value for all stakeholders. For more information about Siltstone Capital, please visit our website http://www.siltstonecapital.com.

For more information about LITFINCON, please visit our website http://www.litfincon.com.

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Commercial Deals

The State of Third-Party Funding in Mexico

With litigation funding being more widely recognized across the globe as a useful tool for both prospective plaintiffs and law firms, funders are keen to explore jurisdictions that are able to provide growth markets for new investments. Whilst the U.S. remains the premier market for litigation finance in North America, some industry figures are looking at what opportunities exist in Mexico. In an article for The Law Reviews, Paloma Castro, senior legal counsel at Deminor, provided an overview of the state of third-party litigation funding in Mexico covering everything from the regulatory framework to disclosure requirements. Castro highlights that while the use of third-party funding is generally permitted in Mexico, the country has traditionally been slow to adopt the practice due to the comparatively low costs of litigating, the limited lack of recoverability and the courts’ tendency to provide conservative award values. However, recent developments in the country’s legal system have seen it grow more in line with the U.S., by creating a framework for collective actions and through Mexico’s Supreme Court having established a precedent of awarding punitive damages. Castro points to the rise in alternative dispute resolution practices as another key factor fueling the growth of legal funding in Mexico, with the country having seen an uptick in third-party funding used for arbitration proceedings compared to domestic court litigation. Furthermore, Castro notes that Mexico has undergone a process of innovation and modernization in the legal system, partly fueled by the pandemic, which may improve ease of access to funding in the country moving forward.
Case Developments Commercial

Nanoco Announces ‘No Fault Settlement’ With Samsung in IP Lawsuit

As intellectual property and patent cases continue to dominate the headlines, the discussion around funding disclosure has been a common through-line in this area, especially in U.S. courts. However, an update in a major IP lawsuit demonstrates that this is not universal, as Nanoco’s case against Samsung appears to be approaching a resolution whilst the funder’s identity remains anonymous Reporting by The Business Desk details an announcement by Manchester-based materials developer, Nanoco Technologies, that it has agreed to a “term sheet for a no fault settlement” with Samsung. The dispute, which has been ongoing since February 2020, saw the UK company accuse Samsung of infringing upon multiple patents related to the nano materials it had developed for use in electronics, including OLED screens. The announcement by Nanoco revealed that as a result of the agreement, both parties had requested a stay on the trial which was meant to begin this week, with the details of the settlement agreement being finalised over the next 30 days. Whilst the identity of the litigation funder is not public, Nanoco first engaged in the funding agreement in July of 2020.
Commercial Deals

Duane Morris Report Highlights Record Year for Class Action Settlements

Class action lawsuits have continued to gain interest and investment from litigation funders, with LFJ reporting on two high profile actions in the first week of 2023 alone. This is no doubt driven by the record-setting volume of class actions brought last year, as new research reveals the billions of dollars in class action settlements delivered in 2022. A new article by Forbes examines this year’s Duane Morris Class Action Review, which provided a breakdown of the 635 class action decisions in the U.S. last year. The latest installment of the law firm’s annual review found that the combined value of all class action settlements topped $63 billion, with 15 of these actions reaching a settlement resolution with a value of $1 billion or more. Authored by Gerald Maatman Jr., chair of Duane Morris’ class action practice, the report identified product liability class actions and mass torts as being the most valuable area, with over $50 billion in settlements. However, the area that saw the most growth in the value of settlements was in consumer fraud class actions, which reached nearly $8.6 billion and represented an increase of 640% from 2021. The presence of litigation funders who are willing to fund these actions will continue to play a role in the sector’s growth, whilst also contributing to the rise in the value of settlements.