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Commercial

University of Chicago Hosts Conference on Litigation Finance

As many litigation finance leaders emphasised at last week’s IMN conference, one of the priorities for the industry is to continue efforts to raise greater awareness and educate a wider audience about third-party funding. Whilst conferences produced by commercial providers are incredibly useful, it is important where possible for the industry to partner with educational institutions on these events. On Thursday October 26, the University of Chicago Law School’s Center on Law and Finance will be hosting its Conference on Litigation Finance, in partnership with Burford Capital and Alliant. The conference aims to provide a forum for debate around various issues with the agenda including panel discussions on: ‘the policy debate’, ‘the connections between insurance and litigation funding’, and ‘the challenges of litigation finance’. The one-day event has attracted a range of impressive speakers not only from litigation funders, but also top US law firms, insurers, academics, and court judges.  Representatives from funders on the agenda include James Burnham from Vallecito Capital, as well as Christopher Catalano and Alyx Pattison of Burford Capital. Bringing the perspective of the law firms, Leonard Gail, founding partner of Massey & Gail, and Benjamin E. Waldin, partner at Eimer Stahl LLP, will also be speaking at the conference. For those readers who have followed the ongoing disputes over disclosure in litigation funding, the most notable name among the three judges speaking at the conference is Chief Judge Colm F. Connolly from the U.S. District Court for the District of Delaware. Judge Connolly has become one of the most prominent names thanks to his push for increased transparency around funding arrangements in patent infringement lawsuits.
Case Developments Commercial

Cruise Ship Passenger Scores Win in Covid Class Action Brought Against Carnival

This past month has seen a high frequency of developments in Australian class actions, with judgements being handed down from the Federal Court, and new lawsuits being announced with the support of third-party funders. This trend is not abating as we enter the final days of October, with yet another favourable judgement handed down in a class action with its origins in the Covid-19 pandemic. An article by The Financial Times covers today’s judgement by Justice Angus Stewart in the case of Karpik v Carnival plc (The Ruby Princess) (Initial Trial) [2023] FCA 1280. Justice Stewart’s ruling found that Carnival, one of the world’s leading cruise operators, was liable to pay for Susan Karpik’s ‘out of pocket expenses in respect of her COVID-19 infection and adjustment disorder injuries’, after she contracted the respiratory disease aboard their ship, The Ruby Princess.  The judge ruled that Carnival had ‘breached their duty of care in various respects’ in their handling of a Covid outbreak in March 2020, having failed to cancel the cruise, warn the passengers of the heightened infection risk, or take adequate measures to prevent the spread of infection. Whilst Justice Stewart found that Karpik’s claim for non-economic losses did not meet the legal threshold, and therefore did not award personal injury damages, Carnival was ordered to pay $4,423.48 plus interest to cover her out of pocket expenses for medical treatment.  Mrs Karpik’s claim is part of a class action brought by Shine Lawyers and funded by Balance Legal Capital, representing over 1,000 individuals who were either passengers on Carnival’s ship or are relatives of passengers who died of coronavirus. Vicky Antzoulatos, joint head of class actions at Shine Lawyers, praised the judge’s decision and argued that Carnival should now “do the right thing and compensate all the passengers rather than prolong the matter through further litigation”.
Announcements Commercial Fundraising

LegalMation Announces $15M in New Funding

LegalMation, Inc., the market leader in Generative AI-driven solutions for high-volume litigation, today announced it has raised a $15 million Series A financing round led by the venture capital team at Aquiline Capital Partners LP, Aquiline Technology Growth ("Aquiline"), with continued participation from existing investors Motley Fool Ventures, REV Venture Partners, Key Venture Partners, Quick Set LLC, and Brentwood Investments. LegalMation has experienced rapid growth in demand for its Generative AI litigation response platform that provides the insurance and legal industries with clear productivity and cost savings. LegalMation's proprietary solutions enable legal professionals to respond to lawsuits, discovery requests, and related workflows using the client's own historical response data. In 2023, LegalMation's customers have already leveraged the platform to answer over 1.1 million discovery requests in over 30 state and federal jurisdictions. Demand for LegalMation's solutions has been boosted by labor shortages and inflationary pressures. For in-house counsel in particular, automating high-volume litigation and related tasks has become the number one solution to these challenges. Accordingly, insurance carriers and large enterprises have become LegalMation's predominant client base as they seek to increase efficiency and find ways to scale at the organizational level as they find ways to apply Generative AI solutions to their operations.  Valued at over $200 billion, the LegalTech and InsurTech markets are increasingly expected to rely on AI and automation solutions in the coming years. LegalMation is well positioned to benefit as the litigation and insurance industries continue to transform. LegalMation has become the trusted partner to the nation's top insurance carriers, large enterprises such as Walmart, and numerous law firms such as Sheppard Mullin, Ogletree Deakins, Fisher Phillips, Nelson Mullins, Baker Donelson, and Jackson Lewis. With this new funding, LegalMation will deepen the functionality and breadth of its platform to support the growth of its rapidly evolving customer base. Additionally, the new funds will enable LegalMation to devote significant resources to build new end-to-end litigation workflow automation and analytic tools, all focused on the goal of resolving disputes faster, while improving accuracy, cost, and outcomes for its customers. "We are thrilled to partner with Aquiline given their experience and ability to identify disruptive technology platforms across the insurance and legal ecosystems combined with an extensive network across both markets. We already had strong customer relationships with a few of Aquiline's strategic carrier investors and we look forward to expanding LegalMation's reach within these markets" said James M. Lee, LegalMation's Co-Founder and Chief Executive Officer. "The need for AI automation tools to achieve financial goals has never been greater, especially with the macro-economic pressures falling on both large and small enterprises. This investment will allow LegalMation to accelerate its growth and realize our vision of becoming the most impactful technology partner to the insurance and legal industries." "The AI revolution has the potential to drive exponential productivity gains while allowing greater scalability. The legal and insurance industries are just beginning to adopt transformative technology solutions, having realized the potential to empower their highly skilled talent core" said Aquiline's Dante La Ruffa, Principal. "Aquiline has a track record in scaling SaaS companies and has made multiple investments in the LegalTech industry across our family of funds. We are thrilled to partner with LegalMation and believe they are uniquely positioned to supercharge the litigation support process as we know it today." About LegalMation LegalMation is a SaaS technology company led by a group of experienced litigators and technology specialists, dedicated to revolutionizing the practice of law through artificial intelligence aimed at legal departments of large corporates, insurance carriers, and law firms. LegalMation's ground-breaking generative AI platform dynamically produces fully formatted responsive pleadings, discovery requests and responses and other documents. The platform tailors the claims, allegations, and requests in the legal documents, incorporating jurisdictional requirements as well as the attorney's own style, and response strategy. For more information, visit https://www.legalmation.com. About Aquiline Technology Growth Aquiline Technology Growth ("ATG") seeks to invest in early and growth-stage technology companies that are bringing innovation to the insurance and financial services ecosystems. ATG is managed by Aquiline Capital Partners LP, a private investment firm based in New York and London that invests across financial services and technology. The ATG team has experience in technology and financial services and is supported by its colleagues at Aquiline, strategic partners, and an active group of industry Executive Advisors. For more information on ATG, visit http://www.aquiline.com.
Commercial Deals

Court House Capital Funds Class Action Against Toyota New Zealand

Class actions often represent the best avenue for consumers looking to seek justice and some form of compensation from large companies who have harmed them. However, these claims are most effective when they are supported by third-party litigation funding, ensuring that these individuals can pursue legal redress without incurring financial risk. An article from Stuff.co.nz covers the recent filing of a class action against Toyota New Zealand over its sale of 35,000 vehicles since 2015, which allegedly contained a known fault in their diesel particulate filters (DPFs). The lawsuit brought by Shine Lawyers alleges that the defective vehicles provided customers with reduced performance, poor fuel efficiency and caused the vehicles to ‘emit white smoke’. Commenting on the class action, Shine Lawyers’ associate Hamish Davies explained that “owners of these vehicles spent thousands of dollars, in some cases, all of their savings and it’s pretty disappointing for them to now have to deal with what was a defective vehicle.” He highlighted that the defects in the diesel vehicles forced consumers to spend excessive amounts on fuel and “even in some cases loss of income when people missed work due to issues with the vehicle.” The class action is being funded by Court House Capital, with Davies highlighting that the outside financing “means that individuals don’t have to pay anything and they don’t have any risk when they sign up.” A spokesperson for Toyota New Zealand provided the following comment: “Toyota has been and remains committed to assisting any customer whose vehicle experiences a DPF issue and will continue to provide any related repairs free of charge. This has been our position to date, and we will defend the class action announced today. As this matter is now before the courts, we have no further comment.”” As LFJ reported in October 2022, this is not the first time that one of Toyota’s local businesses has been hit with a lawsuit related to issues with its diesel vehicles, with Toyota Australia facing a $1 billion class action brought by Maddens Lawyers. The Australian class action lawsuit also received third-party funding, with that case being backed by Woodsford.
Commercial Deals

Manolete Partners Looks to Expand Covid Loan Recovery Scheme

As we steadily approach the four-year mark since the COVID-19 outbreak began, it is clear that we have not yet seen all the long-term consequences of the pandemic play out. This is especially true when it comes to litigation that has been brought in relation to actions by governments or businesses in response to the pandemic, with a UK litigation funder indicating that it is increasing its activities in this area. An article by Legal Futures covers the recent announcement by Manolete Partners that it is looking to expand upon its pre-existing pilot scheme to bring cases related to Covid Bounce Back Loans (BBLs). In a trading update for the six months leading up to 30 September, the funder indicated that another UK bank is beginning a campaign to recover misused BBLs and will partner with Manolete. Manolete’s previous pilot programme with Barclays has provided funding for 81 BBL cases, with 33 of these receiving funds in the last six months, compared to 48 funded BBL claims in the final six months of the 2022 trading period. The funder also informed its shareholders that the cases had a noticeably shorter duration than the funder’s average timeline for funded litigation.  Interestingly, Manolete also stated that the Supreme Court’s PACCAR ruling “has had no adverse impact, necessitating only very minor amendments to the standard terms of our funding agreements.”
Commercial Deals

Piper Alderman Exploring Class Action Against IC Markets Over CFD Products

The growth in trading platforms that cater to retail investors over recent years has significantly widened the market of individuals looking to trade investment products. However, the conduct of these platforms has come under increasing scrutiny and related legal action, with questions being raised around how they market and sell complex investment options to individuals who lack the resources and awareness of large institutional investors. According to reporting by Business News Australia, Piper Alderman is investigating a potential class action against International Capital Markets (IC Markets) over its sale of contracts for difference (CFDs) to retail investors in Australia.  The claim will focus on “allegations of unconscionable conduct and misleading and deceptive conduct during the period September 2017 to March 2021” by IC Markets in its sale of CFD products to investors. Business News Australia’s reporting states that Piper Alderman is partnering with Woodsford to source funding for the IC Markets class action. This potential claim would be the latest of several class actions that targeted the sale of CFD products, following a 2021 crackdown by Australian Securities and Investments Commission (ASIC) on the marketing and distribution of CFDs to retail investors. As LFJ reported, this would not be the first time that Piper Alderman has brought a class against an online trading provider over the sale of CFD products, having filed a similar class action against IG Markets in May 2023. In the IG Markets case, Piper Alderman secured litigation funding from Omni Bridgeway. Since Piper Alderman’s case was filed, LFJ has also covered another class action brought by William Roberts Lawyers against IG Markets in August 2023, with funding also provided by Woodsford.
The LFJ Podcast

Episode 79: Stewart Ackerly and Matt Blumenstein

Hosted By Stewart Ackerly |
In this episode, we sit down with Stewart Ackerly and Matt Blumenstein, Head of Originations and Head of Underwriting at Statera Capital, respectively. Stewart and Matt discuss Statera's approach of funding both small and large claims, their diligence and underwriting criteria, how their originations are progressing, and what their expectations are for the future of the industry. [podcast_episode episode="12081" content="title,player,details"]
Case Developments Commercial

High Court Grants Therium’s Asset Preservation Order in Dispute with Client

One of the key issues that commentators raised in the aftermath of the Supreme Court’s PACCAR ruling, was whether the judgement would lead to a series of disputes between funders and their clients over the enforceability of litigation funding agreements (LFAs). A recent decision from the High Court has demonstrated that these disputes are already underway, with funders keen to preserve their returns whilst the legal arguments continue to be tested. An article in The Law Society Gazette provides an overview of a High Court ruling in Therium Litigation Funding A IC v Bugsby Property LLC, where Mr Justice Jacobs granted Therium’s application for an asset preservation/freezing order against Bugsby. Therium’s application came about after Bugsby argued that, in the wake of the Supreme Court’s PACCAR decision, its LFA with Therium was no longer enforceable and it should therefore not have to pay the funder. In his judgement, Mr Justice Jacobs stated that “where the amounts claimed by Therium and Omni collectively exceed the proceeds received, there is every reason for all of the trust funds to be preserved.” He explained that both parties had made arguments that “require mature consideration and full argument”, which would need to be further examined in subsequent arbitration proceedings. This ruling in favour of Therium followed another application for an asset preservation order by Omni Bridgeway, who had also funded Bugsby’s original lawsuit. That application was granted by Mr Justice Cotter on October 2nd.  Therium’s spokesperson explained that the company had pursued the application as a solution to the “series of failed attempts by Bugsby to avoid paying what is owed to litigation funders.” They went on to highlight that the High Court’s decision was highly relevant to “funders, law firms and their clients and discouraging to claimants such as Bugsby that wish to use PACCAR as a means to walk away from their obligations to their funders.”
Commercial Fundraising

Fortress Reportedly Pursuing a Second Litigation Finance Fund

Although 2023 has been a turbulent year for litigation finance, with disappointing court rulings and an increase in calls for further regulation of the industry, it is clear that there is still a strong appetite among investors to commit resources to the sector.  An article from Bloomberg, shared by Investment News, revealed that Fortress Investment Group LLC is working on raising its second fund dedicated to investments in litigation finance opportunities. Bloomberg’s source indicated that Fortress was looking to build upon its legal funding portfolio, having already invested $6 billion into the sector.  Whilst Fortress did not provide a comment in response to Bloomberg’s reporting, the article suggests that the private equity company has already been strengthening its litigation finance team. According to the same source, Fortress had added another 12 employees to its legal assets team in the last 18 months, bringing that department’s total strength to 32. As LFJ covered last week, Andrew Jones, director at Fortress, was present at the recent IMN International Litigation Finance Forum and led a panel discussion on ‘Developments in Class Action and Group Litigation’.