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Consumer

Funder Loses Appeal Over NFL Concussion Settlement Distribution

One of the biggest stories in sports law over recent years has been the claim that current and former players in contact sports, such as American Football, are owed compensation for concussion injuries. However, even in one of the most high profile victories for this type of claim, it seems that the involvement of funders has led to ongoing disputes about the way in which settlements have been distributed. Reporting by Reuters details last Friday’s decision by the 3rd U.S. Circuit Court of Appeals in Philadelphia, which dismissed Thrivest Specialty Funding’s appeal to intervene in a previous District Court ruling over the way settlements were paid out to individuals in the NFL concussion litigation. Thrivest, which now operates as Balanced Bridge Funding, argued that ‘the District Court is improperly administering the settlement in a manner adverse to its interests,’ because the ‘Funder Rules’ allowed for the NFL players to receive settlement payments directly rather than through their lawyers. Thrivest had previously moved to have the District Court change these rules in 2022, with the funder having cited at least two examples of players who had ‘received a direct settlement payout, and dissipated the proceeds without repaying Thrivest.’ In a 2-1 decision, the Court of Appeals panel rejected Thrivest’s argument that the District Court’s Funder Rules ‘amount to a substantive ruling that all third-party cash agreements are invalid’, describing the claim as ‘patently incorrect.’ It went on to state that ‘the Rules simply distribute funds in a particular way: directly to class members instead of through counsel,’ and that ‘Thrivest remains free to pursue a collection action.’  In what reads as a particularly damning final statement on Thrivest’s second argument that the Rules allow class members to avoid paying the funder, the panel said: ‘Put differently, it does not like the “particular way” the claims administrator is distributing funds to class members and would prefer a different method.’ As LFJ reported in November 2021, this is not the first time that Thrivest’s involvement in the NFL concussion litigation has led to subsequent disputes.
Case Developments Commercial

Camp Lejeune Litigation Attracting Growing Numbers of Fraudulent Claims

As LFJ reported in July 2023, the interest in litigation stemming from the Camp Lejeune toxic water scandal has been consistently on the rise, as a combination of legal advertising and litigation funding are contributing to what may become one of the largest mass tort cases in US history. However, the tremendous amount of attention focused on these lawsuits is now turning into a double-edged sword, as skyrocketing numbers of fraudulent claims are coming to light. An article by Bloomberg provides an in-depth overview of reports that the Camp Lejeune case is becoming a magnet for false claims, with huge numbers of robocalls and a lack of due diligence from lawyers referring cases has led to a dramatic rise in the number of fraudulent attempts to file a claim. Mikal Watts, capital partner at Watts Guerra, revealed that his firm already has 6,000 Camp Lejeune clients and that whilst auditing referrals from other lawyers, they found hundreds of bogus claims including individuals who had been specifically recruited by call centers. As Bloomberg had previously reported earlier this year, the Camp Lejeune litigation has attracted almost $2 billion in litigation funding, as funders see the strong potential of returns in a case where the settlements are guaranteed by the government. Brian Roth, CEO of Rocade Capital, spoke to Bloomberg about this surge in fraudulent claims and aptly noted that in these situations, “an influx of capital invites greed.” Roth put the spotlight on bad-faith legal marketing companies, explaining that “where you have issues is when you have leads being marketed to multiple different buyers, you have call centers without oversight.”   Driven by the government-approved payout scheme, Bloomberg confirmed from a Navy spokesperson that they had already received 117,000 claims by mid-October. All of these claims will have to be individually vetted by the Navy, but with the window to submit claims open until August 2024, the vetting required to verify each claim will likely lead to an incredibly protracted process. In the meantime, law firms representing clients in Camp Lejeune litigation will have to devote a large amount of time and resources to due-diligence when vetting new potential claimants.
Announcements Commercial People Moves

Andrey Elinson Departs A1 For His Own Investment Venture Inweasta

Established in 2022 by Andrey Elinson, Inweasta has rapidly evolved into an international business with a robust presence in prominent cities such as Dubai, Hong Kong, and Istanbul. The company's range of services is both comprehensive and continuously expanding. Catering to the financial and industrial sectors, the company offers an extensive array of consulting, legal, and investment solutions. The group's core competencies encompass investment strategies, cross-border dispute resolution, litigation funding, and distressed asset management. Andrey Elinson's departure from A1 and his subsequent dedication to Inweasta signify more than just a shift in professional allegiance; It underscores his profound belief in the company's mission and its boundless potential. Elinson expressed: "As I embark on this new chapter with Inweasta, I'm driven by the wealth of knowledge and experience I've gained in executive roles. Inweasta, with its adept team and ambitious vision, provides the perfect platform to harness that expertise. Over the next five years, we aim to evolve Inweasta into a dynamic international powerhouse, leveraging our seasoned team to deliver cutting-edge solutions and services, setting new standards in our industry." Andrey Elinson's professional track record, spanning two decades, is a testament to his expertise in private equity, strategic business development, and corporate management. In 2018, Elinson became a managing partner at A1, a prominent private equity firm and international litigation funder. Preceding this, in 2014, he held the position of Director of Assets Management at the Alfa Group Consortium, a major Russian business entity. From 2007 to 2014, Andrey Elinson devoted seven years to Basic Element, one of Russia's largest industrial conglomerates, initially serving as the Director of Corporate Governance and Internal Control, and later advancing to the role of Deputy CEO. Throughout his career, Elinson held positions on the boards of directors of various prominent companies, including AlfaStrakhovaniye, Ingosstrakh, Rosvodokanal, and En+ Group. In 2016, Andrey Elinson became a Member of the Supervisory Board of X5 Retail Group, one of Russia's largest retail operators. However, in 2020, he retired as a member of the Supervisory Board of X5 Retail Group. He also served as a member of the supervisory board of the Alfa Group Consortium and A1 Investment Holding, all of which he departed from by 2020. His departure from A1 signifies his exit from all appointed roles, redirecting his focus exclusively to his personal investment enterprise. As the founder, Andrey Elinson dedicates special focus to Inweasta, ensuring a hands-on approach to its growth and success. In return, the company places substantial trust in Elinson's well-established reputation and the professionalism exhibited by the entire team. The Inweasta team has outlined ambitious strategic goals for the upcoming five years, harnessing decades of combined experience to pioneer new industry benchmarks and propel innovation forward. About Inweasta Inweasta is an international group of companies launched in 2022. The company specializes in investments, cross-border disputes resolution, litigation funding and distress assets management. Inweasta provides full range of services related to a resolution of complex disputes and situations:
  • Litigation Funding
  • Cross-border Litigation Management
  • Investments in Distressed Assets
  • Corporate Finance and Debts Restructuring
  • Inheritance Structuring and Protection
  • Mediation of Disputes
  • Having legal, financial, investments, security, PR and other competences in-house gives Inweasta the ability to work efficiently on complicated projects that require multiple competences being applied.
Announcements Commercial People Moves

LegalPay Appoints Tanya Prasad as Chief Investment Officer

With this strategic addition to the team, LegalPay aims to reinforce its position as a dominant player in the legal finance industry, setting its sights on managing INR 50,000 crores worth of claims by the end of 2026.  LegalPay, the largest player in the litigation funding industry in India, is proud to announce the appointment of Tanya Prasad as its new Chief Investment Officer (CIO), effective immediately.  Prasad brings over 10 years of experience in cross-border litigation and international arbitration proceedings in the fields of international trade, construction disputes, energy, banking, and finance, as well as Investor-State disputes. She specialises in International Dispute Resolution and earned her LL.M. degree from the prestigious Humboldt University, Berlin. rings a wealth of experience from her previous roles at PwC, Karanjawala & Company, and MRP Advisory. She will be responsible for overseeing LegalPay’s investment strategy, portfolio management, and risk assessment.  LegalPay has enjoyed unprecedented success in the Indian litigation funding market. Its achievements have garnered widespread attention from various international litigation funders, leading to strategic partnerships with many of them.  “I welcome Tanya Prasad as our new Chief Investment Officer at LegalPay. Her extensive experience in litigations and expertise in arbitrations make her the ideal choice to lead our company’s growth in the dynamic field of litigation funding,” said Kundan Shahi, Founder & CEO of LegalPay. He further added, “Tanya Prasad’s appointment as CIO represents a pivotal moment in LegalPay’s journey. With her exceptional expertise, we are confident in our ability to scale new heights and continue making a positive impact in the legal finance industry.”  Tanya Prasad commented: “I am excited to take on the new role of Chief Investment Officer and to fulfil all responsibilities that come with it. It’s a great honour for me to be in a position to steer the growth of LegalPay in the litigation funding ecosystem in India and to strive to make LegalPay a global player. It is also important to me to further the mission of LegalPay, which is- access to justice for all.”  Furthermore, LegalPay plays a pivotal role in supporting companies undergoing insolvency by providing them with the necessary capital during such times.
Commercial Regulatory Issues

Broadridge Says Institutional Investors Don’t Need to Panic over PACCAR Decision

Much of the commentary on the Supreme Court’s ruling in PACCAR regarding litigation funding agreements (LFAs), has focused on the impact on litigation funders and law firms. However, it is also worth recognising that investors who provide the needed capital for these funding arrangements are also concerned about how their investments could be affected. A new insights article from Broadridge looks at the potential impact of the Supreme Court’s PACCAR decision on institutional investors, offering an overview of the judgement itself and providing key takeaways for those investors who are currently engaged in LFAs.  The leading takeaway from Broadridge is spelled out in clear terms: ‘do not panic.’ The fintech company argues that the Supreme Court’s ruling ‘is not going to turn the litigation funding market on its head in the UK’, with funders and law firms having been preparing in advance for this outcome. The article goes a step further and suggests that the decision may be beneficial for the industry in the long-term, providing ‘crucial guidance’ for the drafting of LFAs to avoid any questions of non-compliance or impropriety. Broadridge does note that any existing LFAs will be reviewed by funders and may require amending, but says that the degree of changes required will vary depending on the wording of each agreement. In addition, the piece emphasises that institutional investors do not need to be concerned about any proceedings where the litigation has been solely funded by the law firm itself.
Case Developments Commercial

Settlement Agreement Reached in International Arbitration Funded by Longford Capital

Whilst developments in class actions and commercial litigation have dominated the headlines over the last month, the work of litigation funders involved in international arbitration proceedings continues to demonstrate the important role third-party funding can play. An insights piece by Andrew Stulce, vice president at Longford Capital, details the funder’s involvement in a complex international arbitration, providing funding for True Blue Development and its investors in a dispute with the government of Grenada. The claim brought before the International Centre for Settlement of Investment Disputes (ICSID) had begun in June 2021 after the Grenadian government allegedly ‘reneged on its obligations’ to True Blue during the development of a resort hotel near Grand Anse.  The property developer then approached Longford Capital for additional funding to support its claim, with the ICSID tribunal having been notified of the third-party funding in May 2022. Stulce explains that “the opportunity to partner with these investors to pursue their international arbitration wasn’t just a matter of good business—providing capital so they could enforce their treaty rights with top-shelf legal representation was also the right thing to do.” With the additional funding secured, the claim continued forward, and by the summer of 2023 the two parties had entered settlement discussions, with the tribunal being notified on 31 August 2023 that True Blue and Grenada had reached a settlement agreement. The tribunal officially noted the discontinuance of the arbitration proceedings on 6 September 2023, with Longford explaining that the agreement would result in the Grenadian government acquiring ownership and finding a new developer to complete construction of the hotel. Stulce highlights that the settlement agreement “sets right a legal injustice that may not have been pursued without Longford’s funding,” and says that the funder is “gratified that we were able to support these claims and play an important role in resolving this dispute in a constructive way.”
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.