In this episode, we spoke with Steve Nober, President and CEO of Consumer Attorney Marketing Group, or CAMG. Steve discussed why mass torts are so popular right now, why smart money is moving into the sector, how litigation funders can structure their investments into mass torts, what ethical issues they need to be aware of, and much more. [podcast_episode episode="11840" content="title,player,details"]
Opposition to the use of litigation funding and calls for increased regulation of the industry are not uncommon, but have traditionally focused on claims that the practice incentivizes frivolous litigation, or that the lack of transparency is damaging to the judicial system. However, a new hearing announced in the US House of Representatives takes on the issue from a different angle, alleging that third-party funding is being exploited by ‘left-wing activists’.The House Committee on Oversight and Accountability announced yesterday that it would be holding a hearing on Wednesday, September 13, titled “Unsuitable Litigation: Oversight of Third-Party Litigation Funding.” The purpose of the hearing, according to the press release, is to “investigate how left-wing activists are funding litigation against companies and agencies to achieve liberal policy goals”, whilst also examining issues around funders’ level of control in lawsuits.Representative James Comer (R-Ky), chairman of the committee, provided the following statement as part of the announcement: “Private equity and left-wing billionaires are funding litigation against companies and agencies in an all-out effort to sway policy and determine outcomes in the courtroom. These tactics are not only being used consistently to push an agenda, but also seek to enable agencies to implement burdensome regulations and avoid public scrutiny. The House Oversight Committee must work to prevent financiers from hijacking America’s courtrooms, and I look forward to hearing from witnesses on how Congress can also address these litigation schemes to protect industry and consumers.”The witnesses who will appear before the committee will include:
Maya Steinitz, Professor of Law, Boston University School of Law
Erik Milito, President, National Ocean Industries Association
Julie Lucas, Executive Director, MiningMinnesota
Aviva Wein, Assistant General Counsel, Johnson & Johnson
There has been understandable concern, in the weeks since the Supreme Court’s judgement in PACCAR, that the appetite among funders to support large group actions in the UK might be diminishing. However, there are little signs of any slowdown in new funding commitments, as a new class action targeting Google and funded by Hereford Litigation was just announced.An article in The Guardian covers a new class action that has been filed with the Competition Appeal Tribunal, alleging that Google’s anti-competitive behaviour in the search engine market has caused an increase in prices for consumers across the whole UK economy. The class action, which is being led by Hausfeld and funded by Hereford Litigation, is seeking an estimated £7.3 billion compensation to account for the approximately 65 million users of Google in the UK.Luke Streatfield, partner at Hausfeld, explained that at the core of this claim is the allegation that “Google has choked off competition in search engines for years, to the detriment of the businesses that use its services – and, ultimately, consumers.” As a result of these monopolistic and anti-competitive behaviours, consumers have been faced with “higher prices and poorer quality” across a range of sectors. In response to the lawsuit, a spokesperson for Google provided the following statement: “This case is speculative and opportunistic – we will argue against it vigorously. People use Google because it is helpful. We only make money if ads are useful and relevant, as indicated by clicks – at a price that is set by a real-time auction. Advertising plays a crucial role in helping people discover new businesses, new causes and new products.”
Providing financing for class actions remains one of the best possible engagements for litigation funders, as it represents not only the potential for lucrative returns, but also epitomizes the mission statement of funders to widen access to justice and support communities who lack the resources to seek compensation. A funding announcement for another class action in Western Australia, this one seeking legal redress for homeowners from a construction group, is a pertinent reminder of the positive impact that funders can have.Reporting by WAtoday covers the announcement from Morgan Alteruthemeyer Legal Group that it has secured funding from Omni Bridgeway to pursue a class action against BGC Housing Group, representing homeowners who suffered financial losses from delays in BGC’s construction of the houses. The class action in federal court could represent up to 5000 homeowners who signed contracts with BGC between July 2019 and June 2022.Spencer Lieberfreund, partner at Morgan Alteruthemeyer Legal Group, explained that the funding agreement with Omni Bridgeway would allow the firm to bring the class action, whilst providing “individuals a way of seeking financial compensation without being exposed personally to legal costs.” BGC Proposed Class Action Group, a grassroots organization that has been raising awareness of the issues facing BGC homeowners, welcomed the news of Omni Bridgeway’s involvement and joined Lieberfruend in encouraging other homeowners to register for the lawsuit. Jess Spithoven, one of the founders of the campaign group, emphasized that “securing funding to commence a class action is not enough,” and that the most important thing was for all BGC homeowners to join the class action. At present, Spithoven’s organisation counts more than 2200 homeowners as members.Homeowners are encouraged to register their interest in the class action through Omni Bridgeway’s BGC Class Action website.
Wendy Chou is the Founder and CEO of Dealmakers Forums, operating with 20+ years of experience in marketing, communications, events, and business development. She created the first series of intellectual property monetization and finance conferences starting in the early 2000s — a number of those conferences are still being held on an annual basis. That’s what sparked her interest in the sectors where legal, finance, and tech converge. Since then, Wendy has served as CMO for a financial services firm, led a marketing agency, and in her various roles, has produced over 100 successful events in IP, litigation finance, and other complex markets. She’s become a big believer in the power of events. If designed and executed well, she believes an event experience can bring people together, build community, stimulate thinking and creativity, advance both personal and professional objectives, and even move industries and markets forward. Dealmakers Forums curates meaningful event experiences and content for senior executives in the legal, finance and technology industries, bringing together a selection of organizations and individuals who are working at the forefront of the industries we serve to facilitate deep discussions onstage and offstage, and to make valuable new connections that lead to collaborations and strengthen existing relationships. For ten years our IP Dealmakers Forum has been the “must-attend” event for decision makers driving IP transactions. Upon its debut in 2018, our inaugural LF Dealmakers event likewise became the “go-to” conference for litigation finance. In 2022 Wendy created LINE, a digital publishing platform, to share perspectives from our community year-round. Find out more at: DealmakersForums.com Below is our LFJ Conversation with Wendy Chou: This is the 6th annual LF Dealmakers Forum! Hard to believe it has been six years already. What have you noticed in terms of how the industry has evolved over the years? Absolutely, it’s remarkable to think that this marks the sixth annual LF Dealmakers Forum! During this time, we’ve witnessed significant transformations within the litigation finance industry. One of the most striking changes has been the overall growth in both size and scope of the industry. In addition to an increased acceptance of litigation finance as a legitimate and valuable tool, the industry has evolved into a multifaceted ecosystem with a diverse range of players and products. In just six years, we’ve gone from primarily talking about single-case funding to discussions involving various insurance products, co-investing partnerships, innovative deal structures, and even secondary market transactions. The industry has also become more global in scope, with cross-border partnerships and international cases becoming more prevalent. It's truly exciting to witness the growth and evolution of this industry. Having said that, there are of course the challenges and controversies inherent in a maturing industry that benefit from having a space for continued dialogue. That’s why I believe LF Dealmakers has grown alongside the industry, as we provide a necessary forum for discussion, debate, and dealmaking. What can we expect at this year's conference? Any speakers or agenda items you'd like to highlight? This year's LF Dealmakers promises to be our most impactful event yet, featuring a diverse range of sessions and discussions. One of the sessions I’d like to highlight is, "The Great Debate: Trust and Transparency in Litigation Finance." In this session, we'll bring together leading experts who hold differing perspectives for an open dialogue and insightful exchange on critical issues such as disclosure, control, ethics, and conflicts of interest. We’re particularly excited to have the U.S. Chamber of Commerce participating in the discussion via their Institute for Legal Reform. They are not typically a participant in public debate on this topic, and I feel honored to host them at LF Dealmakers. I think you’ll be surprised to hear what they have to say. These aren’t always easy discussions, but we don’t shy away from reality and controversy, especially when it is necessary and can be productive to the advancement of industry practices. Alongside this, we've curated a lineup of distinguished speakers who are experts in various facets of litigation finance and the broader landscape of legal finance and risk management. Our agenda is filled with panel discussions covering topics ranging from emerging trends to navigating regulatory challenges to best practices and lessons learned. I’d say that over the years of LF Dealmakers the discussions have become much more advanced, and often provide practical takeaways for funders, funded parties, and others, including how to negotiate the best deals and address the inevitable issues that arise post-funding. So we are looking forward to hearing about those aspects of the industry and much more this year. The industry is facing some headwinds at the moment. How will issues like the recent UK Supreme Court ruling and the impact of inflationary pressure factor into this year's conference? The recent UK Supreme Court ruling and the challenges posed by inflationary pressures are indeed significant concerns within the industry, both of which will certainly come up in discussions this year. We also have dedicated sessions specifically addressing the headwind issues including a policy briefing session covering the latest in US federal, state, and forum-specific (e.g. Delaware) treatment of litigation funding as well as the industry response. A prominent expert and lobbyist from the American Legal Finance Association will address both the consumer and commercial fronts and where pending legislation and efforts would impact both. We believe that openly discussing these challenges and exploring solutions will help attendees navigate these headwinds more effectively. How would you recommend that litigation funding stakeholders make the most of this year's conference? First of all, I’d like to note that we’ve expanded the event this year, to include a pre-conference workshop on navigating the mass tort landscape and an opening reception the evening before, so attendees should plan on getting to NYC early to attend those events. Other than that, I would advise litigation funding stakeholders to come prepared to engage in robust discussions and networking opportunities. Take advantage of the diverse perspectives shared by our speakers and fellow attendees, attend the sessions to gain practical insights that can be applied directly to your strategies and most importantly, don't be afraid to ask questions and participate actively in the panels. It wouldn’t be a Dealmakers event without mentioning the one-to-one meetings. As in past years, attendees will have the opportunity to book 30-minute meetings with one another to occur throughout the event, and because the audience is curated, there should be plenty of options for productive discussions with new and existing clients and partners. The conference is a prime opportunity to foster connections, share knowledge, and explore new collaborations. What is it like for you--the conference organizer--during this multi-day event? Do you have time to enjoy the discussions and networking, or are you overwhelmed with last minute hiccups? Well, as they say, it’s not my first rodeo. Seriously, as the conference organizer, these multi-day events are both exhilarating and demanding. The key is that I've built a fantastic team that helps manage the logistical details. This allows me to actively engage in the discussions and networking opportunities. Of course, there are always last-minute hiccups that require quick thinking and problem-solving, but I've come to embrace these challenges as part of the experience. Ultimately, witnessing the exchange of ideas, the forging of partnerships, and the enthusiasm of attendees makes all the hard work incredibly rewarding. Who was it that said change is the only constant in life? I believe that wholeheartedly. Once you accept that, your mind shifts from thinking “why are there waves” to “how can I best ride these waves” (and yes, I took up surfing on one of my post conference vacations)!
Silver Bull Resources Inc. (TSX: SVB, OTCQB: SVBL) (“Silver Bull” or the “Company”) is pleased to announce that it has secured funding for its international arbitration proceedings against the United Mexican States (“Mexico”) under the Agreement between the United States of America, Mexico, and Canada (the “USMCA”) and the North American Free Trade Agreement (“NAFTA”).HIGHLIGHTSLitigation Funding Agreement (“LFA”) signed with Bench Walk Advisors LLC (“Bench Walk”) to pursue international arbitration claims against Mexico for breaches of its obligations under NAFTA.
The LFA facility is available for immediate draw down and provides funding to cover legal, tribunal and external expert costs and corporate operating expenses associated with the Company.
US$9.5 million is provided as a purchase of a contingent entitlement to damages in the event that a damages award is recovered from Mexico.
Legal counsel for the claim is Boies Schiller Flexner (UK) LLP (“BSF”), an international law firm with extensive experience in international investment arbitration concerning mining and other natural resources, to act on its behalf. The BSF Team will be led by Timothy L. Foden, a noted practitioner in the mining arbitration space.
The arbitration arises from Mexico’s unlawful expropriation and other unlawful treatment of Silver Bull and its investments resulting from an illegal blockade of Silver Bull’s Sierra Mojada project that began in September 2019 and continues to this day.
Silver Bull’s CEO, Mr. Tim Barry commented, “Whilst it had been Silver Bull’s intention to continue developing the Sierra Mojada Project, an illegal blockade by a small group of local miners trying to extort and force an underserved royalty payment from the Company began in September 2019 and continues to this day. Despite numerous requests to the Mexican Government to uphold the law and end the illegal blockade, the Government failed to act, preventing Silver Bull from accessing the site for over four years and preventing the Company from conducting its lawful business in Mexico. The direct actions and inactions by the Mexican Government has driven away investors from the project and resulted in the expropriation of the Sierra Mojada project.“The substantial litigation funding secured under the LFA is a testament to the strength of Silver Bull’s claims. The US$9.5 million funding facility is non-dilutive to Silver Bull shareholders and will cover the full legal budget of the claim, expert, and ancillary costs, as well as Silver Bull’s operating expenses. Bench Walk will have a contingent entitlement to damages in the event that damages are awarded.”Mr. Barry continued, “We note that other companies have successfully enforced their rights through international arbitration and received substantial sums for damages. Recent examples of this include (i) a US$110 million award issued by the World Bank International Centre for Settlement of Investment Disputes (“ICSID”) tribunal in August 2023 to Indiana Resources Ltd. regarding the revocation of its mining license by the Tanzanian Government in 2018, which case was led by our legal counsel Tim Foden from BSF, and (ii) a US$5.8 billion award issued by the World Bank ICSID tribunal to Barrick Gold/Antofagasta regarding Pakistan’s unlawful denial of a mining permit for the Reko Diq copper project.”BACKGROUND TO THE CLAIM: The arbitration has been initiated under the Convention on the Settlement of Investment Disputes between States and Nationals of Other States process, which falls under the auspices of the World Bank’s International Centre for Settlement of Investment Disputes (ICSID), to which Mexico is a signatory.Silver Bull officially notified Mexico on March 2, 2023 of its intention to initiate an arbitration owing to Mexico’s breaches of NAFTA by unlawfully expropriating Silver Bull’s investments without compensation, failing to provide Silver Bull and its investments with fair and equitable treatment or full protection and security, and not upholding NAFTA’s national treatment standard.Silver Bull held a meeting with Mexican government officials in Mexico City on May 30, 2023, in an attempt to explore amicable settlement options and avoid arbitration. However, the 90-day period for amicable settlement under NAFTA expired on June 2, 2023, without a resolution.Despite repeated demands and requests for action by the Company, Mexico’s governmental agencies have allowed the unlawful blockade to continue, thereby failing to protect Silver Bull’s investments. Consequently, Silver Bull will seek to recover an amount of approximately US$178 million in damages that it has suffered due to Mexico’s breach of its obligations under NAFTA, which includes sunk costs of approximately US$82.5 million, usually considered minimum damages in such cases.THE SIERRA MOJADA DEPOSIT: Silver Bull’s only asset is the Sierra Mojada deposit located in Coahuila, Mexico. Sierra Mojada is an open pittable oxide deposit with a NI 43-101 compliant Measured and Indicated “global” Mineral Resource of 70.4 million tonnes grading 3.4% zinc and 38.6 g/t silver for 5.35 billion pounds of contained zinc and 87.4 million ounces of contained silver. Included within the “global” Mineral Resource is a Measured and Indicated “high grade zinc zone” of 13.5 million tonnes with an average grade of 11.2% zinc at a 6% cutoff, for 3.336 billion pounds of contained zinc, and a Measured and Indicated “high grade silver zone” of 15.2 million tonnes with an average grade of 114.9 g/t silver at a 50 g/t cutoff for 56.3 million contained ounces of silver. Mineralization remains open in the east, west, and northerly directions.For a full summary of the Sierra Mojada resource, please refer to Silver Bull’s news release located at the following link:https://www.silverbullresources.com/news/silver-bull-resources-announces-5.35-billion-pounds-zinc-87.4-million-ounces-silver-in-updated-sierra-mojada-measured-and/
Moving beyond single-case funding and actively supporting law firms through direct funding is certainly a tempting prospect for many funders, creating new avenues for lucrative returns on their investments. However, as LFJ recently reported, these investments can be risky where the funded law firm faces financial difficulties, or in this example, where the firm is the target of allegations of malpractice and barred from collecting case fees.An article in Reuters provides the details on the unusual case of McClenny, Moseley & Associates, a Texas law firm that is currently facing disciplinary proceedings in the Western District of Louisiana. The firm and its attorneys came under the courts’ scrutiny earlier this year after it had filed hundreds of lawsuits against insurers, on behalf of households who had suffered property damage from hurricanes. Allegations were leveled that the attorneys had “improperly solicited or paid for clients, brought claims against the wrong insurers, filed duplicate lawsuits or sued insurers that had already settled with their clients.” The Louisiana court has since suspended a group of the firm’s attorneys and, last month, prohibited them from collecting on any costs or fees from over 200 lawsuits it had filed in the district.However, the disciplinary case against McClenny, Moseley & Associates now has a new dimension, as two litigation funders, Equal Access Justice Fund and EAJF ESQ Fund, have asked U.S. District Judge James Cain to allow their participation in the disciplinary case. Having lent a combined $30 million to the law firm, the funders argued in their filing that they “need a seat at the table because the existing parties have not adequately represented (nor are they expected to adequately represent) the Lenders’ interests.”According to Reuters’ reporting, the funders are also pursuing litigation against the law firm in a Texas state court, as they seek to protect their investment which may now be in danger if the suspended law firm is not allowed to collect on any proceeds from the funded cases.
The vast power and resources of the pharmaceutical industry means that where patients and consumers suffer harm from faulty products or treatments, it can often be incredibly difficult for these individuals to seek legal recourse. However, the news of a group litigation order (GLO) being approved against a global pharmaceutical giant demonstrates the power of collective actions, especially those that are well-funded, in furthering access to justice.An article in The Times covers the news that a GLO has been approved by the High Court for a claim brought against Bayer over its Essure sterilization device, which allegedly caused “excruciating pain, abnormal bleeding and nickel poisoning” for hundreds of women in the UK. Whilst the international pharmaceutical company has previously agreed settlements totaling £1.2 billion with around 40,000 women in the US, its failure to do so in the UK has led to this class action being brought.Pogust Goodhead, which is representing the UK claimants, has already been part of a similar claim in the Netherlands through the ‘Stichting Essure Claims’, an independent foundation representing Dutch women who have suffered similar injury from the devices. Whilst no specific funder has been named for the UK action, according to the claim’s website, Pogust Goodhead assures any potential claimants that it will “arrange all necessary insurance and funding”. Last year, Pogust Goodhead’s CIO, Ana Carolina Salomão Queiroz confirmed that the Stichting Essure in the Netherlands had received funding from Redbreast Associates N.V.Alicia Alinia, global COO at Pogust Goodhead stated that Bayer’s Essure device “has simply failed and has caused irreparable damage physically and mentally”. In response to the GLO being granted, Bayer released a statement claiming that “while all birth control products and procedures have risks, the totality of scientific evidence on Essure demonstrates that the benefit risk profile is positive.”
In the weeks since the Supreme Court issued its decision in the PACCAR case, there has been much discussion about how funders and litigants will adapt their litigation funding agreements (LFAs) to comply with the DBA Regulations. However, most of these conversations have focused on LFAs for cases before English courts, whilst the potential impact on litigation funding in offshore jurisdictions has been largely unaddressed.In a new piece of analysis, Simon Jerrum, partner at Appleby, looks at the potential implications for funded cases taking place across the following seven offshore jurisdictions: the British Virgin Islands (BVI), Cayman Islands, Bermuda, Jersey, Guernsey, Isle of Man, and Mauritius. Assessing each of these jurisdictions in turn, he examines both the existing regulations that are in place govern the use of third-party funding, as well any case law that has indicated the courts’ stance on the enforceability and management of funding agreements. For example, in the BVI, Jerrum notes that as it is a common law jurisdiction and lacks any equivalent of the domestic DBA Regulations, we are unlikely to see any “significant impact on litigation funding in the BVI.” Alternatively, when looking at the Cayman Islands’ introduction of the Private Funding of Legal Services Act 2020, Jerrum argues that it represents “a conscious decision by the legislature to allow the funding market to develop”, once again indicating that there will not be an immediate threat to funded cases.In concluding his analysis, Jerrum states that whilst many of these jurisdictions have legal structures that are at least seemingly favorable to litigation funding, he expects that “funders are likely to be considering amendments to all of their funding agreements regardless of the jurisdiction.” Jerrum suggests that this is a wise strategy, given that the Supreme Court represents a “persuasive authority in all of the offshore jurisdictions”, and that if there are challenges in these territories, the Court has “binding authority in the event that a case is appealed to the Judicial Committee of the Privy Council.”
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