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Commercial Regulatory Issues

Ireland Law Reform Commission Guidance on Third Party Investment

Ireland's litigation funding laws differ from those of the United Kingdom and other common law jurisdictions. Dispute resolution investment in Ireland is broadly illegal under champerty and maintenance crime statutes, however, Ireland's Courts and Civil Law Act 2023 offers a new legal framework that permits the use of third party funding products and services for international arbitration proceedings in commercial disputes.  Mondaq reports lawmakers in Ireland are embracing litigation finance as a tool for citizens' access to justice. The Representative Actions for the Protection of the Collective Interests of Consumers Act 2023 is a positive step to decriminalize third party funding in international arbitration in Ireland. Furthermore, recommendations to expand legalization of litigation funding vehicles in Ireland have included insolvency, liquidation, receivership and bankruptcy actions.  The Law Reform Commission continues to explore and examine policy considerations that decriminalize litigation investment in Ireland. According to Mondaq, Ireland's Department of Justice is working to publish additional policy findings on litigation finance by the second quarter of 2024.
Commercial Fundraising

Milberg London Secures Funding From Bench Walk Advisors for Competition Claim Against Valve 

The video game industry has seen tremendous growth over recent decades, with research from PwC projecting that it could generate more than $300 billion in revenue by 2026. However, this rising tide has also brought with it allegations that some of the largest gaming companies have engaged in anti-competitive and anti-consumer practices, resulting in claims being brought with increasing regularity. A LinkedIn post and announcement from Milberg London LLP reveal that the law firm has secured ‘a substantial funding package’ from Bench Walk Advisors to bring a claim against Valve Corporation, one of the world’s largest gaming companies. The opt-out competition claim focuses on allegations that Valve’s digital distribution service and storefront, Steam, used ‘excessive pricing and anti-competitive price parity clauses, with the aim of ensuring fair competition in the digital gaming marketplace.’ The intended claim will be filed with the UK’s Competition Appeal Tribunal (CAT), with Vicki Shotbolt, founder and CEO of Parent Zone, acting as the proposed class representative. Shotbolt is working with Milberg London, as well as barristers from Monckton Chambers including Robert Palmer KC, Julian Gregory, and Will Perry.  This is notably the second opt-out claim that Milberg London has brought against a gaming corporation, having already brought a claim, worth up to £5 billion, against Sony Playstation for alleged abuses of its monopolistic position.
Announcements Commercial People Moves

Silver Bull Announces Execution of Key Persons Retention Agreement

Silver Bull Resources, Inc. (TSX: SVB, OTCQB: SVBL) (“Silver Bull” or the “Company”) is pleased to announce that following the entering into the litigation funding agreement with Bench Walk Advisors LLC (the “LFA”), the Company has established a Management Retention Agreement (“MRA”), which is a long-term incentive program to retain key personnel of the Company who have important historical information and knowledge to contribute towards the Claim. The MRA provides that if the international arbitration claims against Mexico for breaches of its obligations under NAFTA (the “Claim”) is successful and the Company receives damages proceeds, 12% of the net proceeds will be directed to the MRA for distribution to its participants, which include Timothy Barry, President, CEO and Director, Brian Edgar, Chairman of the Board, Christopher Richards, CFO, Juan Manuel Lopez Ramirez, and David Xuan. Each participant must satisfy specific Claim related duties and if they do so, each participant may be entitled to a pre-defined percentage of the proceeds received by the MRA. Certain participants under the MRA constitute related parties of the Company and accordingly the MRA constitutes a “related party transaction” of the Company under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The Company is relying on the exemption from the requirement to obtain a formal valuation pursuant to section 5.5(g) of MI 61-101, which provides an exemption where the criteria set out therein are met. The Toronto Stock Exchange (the “TSX”) has provided their conditional approval of the MRA, including that the MRA be approved by the Company’s disinterested shareholders at the next Annual Meeting of Shareholders, which will also be sought in compliance with the requirements for minority shareholder approval under MI 61-101.
Commercial People Moves

Balance Legal Capital Appoints Patrick Crisp as Investment Manager

In a LinkedIn post, Balance Legal Capital announced that it had bolstered the strength of its Australian team, with the hiring of Patrick Crisp as an Investment Manager.  Crisp joins the funder’s Sydney office having previously provided consulting services to the litigation funding industry and having spent 10 years at Freshfields Bruckhaus Deringer, as a senior associate in the firm’s commercial disputes team. Crisp is a qualified solicitor with experience in litigation matters across Australia, the UK, and in offshore disputes. Balance Legal Capital’s Australian operations are led by Simon Burnett and Kylie Ansbro, with Burnett also a director of the Association of Litigation Funders of Australia (ALFA). Olivia Pinto serves as managing director for Australia, from the firm’s Sydney office, whilst Fraser Shepherd acts as senior advisor to the investment committee for the funder’s activities in Australia and New Zealand.  Crisp is now the second investment manager in Balance Legal Capital’s Sydney office, joining Maya Shallita, who was also appointed as ALFA’s company secretary in September.
Case Developments Commercial

Argentina Appeals $16 Billion Judgement in Burford-Funded Lawsuit

For litigation funders, reaching a successful resolution to a case is rarely as simple or straightforward as achieving a favourable judgement or award, with the inevitable difficulty of enforcement and recovery proving to be its own separate battle. This is once again being demonstrated in the high-profile YPF case funded by Burford Capital, as Argentina continues its fight to avoid paying the multi-billion-dollar award. Reporting in the Buenos Aires Times and Bloomberg Law provides an update on the latest development in the case of Petersen Energia Inversora, S.A.U. v. Argentine Republic, as the Argentine government has formally appealed against Judge Loretta Preska’s order to pay $16 billion to the shareholders of YPF. The appeal was filed this Tuesday in the US Court of Appeals for the Second Circuit.  As LFJ reported last month, Burford Capital had already moved to begin collecting the award and asked the court to begin attaching Argentine assets from October 16th. In filing the appeal, Argentina argued that forcing the government to pay the award would inflict “irreparable damage to the [Argentine] population, which suffers from high inflation caused by an unprecedented drought.” The appeal also emphasised that the Argentine government “does not have access to the capital market to issue a bond and deposit a guarantee.” The appeal was filed this Tuesday in the US Court of Appeals for the Second Circuit.
Commercial

RPX’s Q3 Report Highlights Reduction in NPE Filings

The financing of patent litigation remains one of the most popular areas of investment for litigation funders, whilst also being the site of frequent contentious showdowns in recent years, as US courts have pressed for increasing levels of disclosure and transparency. However, new market research also highlights that the volume of patent infringement filings by non-practicing entities (NPEs), who often have ties to litigation funders, has fallen over the last quarter. Earlier this week, RPX released its Q3 in Review report and highlighted several key trends from the world of patent litigation, including a particularly interesting trend around NPE filings in the third quarter of 2023. RPX found that across those three months, “NPEs added 382 defendants, down 32% from the same quarter this past year (when NPEs added 558 defendants).” The report also noted that these figures represented a 12% reduction compared to the second quarter, as well as a 31% drop from the trailing Q3 average measured between 2020 and 2022. RPX attributes this reduction in NPE filings, both in this quarter and across 2023, to the significant absence of filings from IP Edge since December 2022, and a decrease in filings in the Western District of Texas since last year’s court order which attempted to redistribute patent litigation across districts. However, RPX did highlight that IP Edge’s extended hiatus finally came to an end on September 13, with a new lawsuit targeting Roku. The plaintiff in this case is Communication Advances, which is another entity created by IP Edge’s principals: Lillian Woung, Gautham Bodepudi, and Sanjay Pant. In an additional point relevant to litigation finance, RPX noted that two Burford special purpose vehicles (SPVs) avoided sanctions from Judge Todd W. Robinson in the Southern District of California, over its funding of Taction Technology’s case brought against Apple. Whilst Burford’s SPVs did not receive sanctions for a potential violation of their ‘duty of candor’ to the court, Judge Robinson did rule in favour of Apple and granted a summary judgement of noninfringement.
Case Developments Commercial

Australian Class Action Brought Against McDonald’s Secures Favourable Judgements 

Whilst class actions in the UK, US and Europe often receive more coverage, Australia continues to demonstrate its place as one of the top jurisdictions for class actions, particularly those cases that benefit from third-party funding. This is once again demonstrated by news today that a major class action brought against McDonalds has scored two significant victories. In a post on LinkedIn, Michelle Silvers, CEO of Court House Capital, provided an overview of two major developments in the class action being brought against McDonald’s in Australia by Shine Lawyers.  Court House Capital is providing funding for the claim. Firstly, the Federal court of Australia rejected an application to stay the class action, allowing the case to proceed to a case management hearing in 21 days. Secondly, the Full Court of the Federal Court ruled that it had the power “to order that a portion of settlement monies be paid to the litigation funder, Court House Capital, supporting the action, upon approval of any settlement – a so called Settlement Common Fund Order.” The class action focuses on allegations that McDonald’s failed to give its workers a paid 10-minute break when they were working shifts of four hours or more. This refusal to provide paid breaks was in contravention to McDonald’s Australia Enterprise Agreement 2013 (EBA) and the Fast Food Industry Award 2010 (Award). The class action is also being supported by the Retail and Fast Food Workers Union (RAFFWU). Commenting on the ruling, Silvers said, “We now look forward to progressing the class action for the thousands of group members represented by Shine Lawyers and funded by Court House Capital.”
Announcements Commercial People Moves

The European Litigation Funding Association (ELFA) Adds Litigium Capital

The European Litigation Funding Association (ELFA) is delighted to announce that Litigium Capital has become the latest member to join the organisation.  “Joining ELFA is a natural step for Litigium Capital. From a European perspective, the legal financing market is still evolving and, as such, subject to continuous development and innovation. It is essential that key players within the market set standards for, and monitor, responsible operations. By joining ELFA, we continue our commitment to industry best practice in our mission to further develop litigation funding in our home markets”, says Litigium Capital’s CEO, Thony Lindström Härdin.  Omni Bridgeway Managing Director and ELFA Chairman, Wieger Wielinga commented: “I am delighted to welcome Litigium Capital as the latest ELFA member and first Nordic based litigation funder. Litigium’s core mission to establish litigation funding as a well-recognised and widely used form of financing in the Nordics, aligns perfectly with ELFA’s aims. We look forward to collaborating with Litigium founders, Thony Lindström Härdin and Oscar Holm.”  About ELFA:  ELFA was founded by three leading litigation funders with a European footprint, Deminor, Nivalion AG, and Omni Bridgeway Limited. ELFA's current directors are Charles Demoulin (Chief Investment Officer, Deminor); Marcel Wegmüller (Co-Founder and Co-CEO, Nivalion AG); and Wieger Wielinga (Managing Director EMEA, Omni Bridgeway), who is ELFA's Chairman. The intention of the association is to be inclusive for all professional litigation funders of larger or smaller size.  About Litigium:  Litigium Capital is a Swedish investment company dedicated to legal financing. Litigium Capital focuses on funding litigation and arbitration disputes in the Nordics, as well as funding Nordic clients globally. Combining legal and financial expertise for superior risk www.elfassociation.eu 2 assessments and customer service, Litigium Capital’s vision is to make legal financing a natural tool for companies of all sizes in the Nordics.
Case Developments Commercial

Woodsford-Funded ‘Car Delivery Charges’ Claim Reaches Settlement with One Defendant

Despite the ongoing discussions around the fate of litigation funding for class action claims in the UK, we are still seeing positive outcomes in ongoing claims before the Competition Appeal Tribunal (CAT).  Reporting by Commercial Dispute Resolution (CDR) provides an update on the Car Delivery Charges claim, which has seen the impressive milestone of a settlement being reached today. Although the claim has been brought against five separate shipping companies, this settlement is between only one company, CSAV, and the class representative Mark McLaren.  In the opt-out claim that is funded by Woodsford, McLaren is representing both UK consumers and businesses who had bought or leased vehicles from one of five international shipping companies: MOL, “K” Line, NYK, WWL/EUKOR and CSAV, between 2006 and 2015. The claim alleges that these companies engaged in a price-fixing scheme, following a European Commission ruling in 2018 which found that these corporations had violated the European Union’s competition laws and issued a fine of €395m. Now that the settlement with CSAV has been reached, both the law firms representing the claimants and CSAV have submitted an application for the CAT to approve the settlement. The CAT will consider the application at a hearing on 6 December 2023.  However, it is important to note that CSAV’s market share is the smallest of all five defendants, at only 1.7%, with the other four defendants set to continue to fight the claim at trial in 2025. McLaren highlighted that the settlement was important not only for this case, but was “also a significant development for the wider UK collective action regime.” Steven Friel, CEO of Woodsford described the outcome as a “pioneering settlement, which demonstrates the power of litigation funding to help hold large companies to account for their wrongdoing, in this case cartel behaviour.”