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Case Developments Consumer

LinkedIn Co-founder, Reid Hoffman, Funding Lawsuit Against Former President Trump

Whilst the litigation industry has continued to grow in both the scale and volume of activity in recent years, it remains a sector that the wider public is largely unaware of, and most cases proceed unnoticed by mainstream media. However, a notable exception to this trend appeared last week when it was revealed that a lawsuit being brought against former President Donald J. Trump is being partly financed by Reid Hoffman, the co-founder of LinkedIn. An article in The New York Times provides an overview of this development in the rape lawsuit being brought against Mr. Trump by E. Jean Carrol, an American journalist and author. Mr. Hoffman’s involvement in funding the litigation was only revealed after it was ‘disclosed in a letter to a judge’ by Mr. Trump’s lawyers, who had been informed about this third-party funding by Ms. Carroll’s lawyers earlier in the week.  According to Dmitri Mehlhorn, an adviser to Mr. Hoffman, the funding for this lawsuit originated through a grant made by Hoffman’s non-profit to Kaplan Hecker & Fink, the law firm handling Ms. Carroll’s case. Whilst not originally intended to fund this specific lawsuit, Ms. Carroll’s lawyer, Roberta A. Kaplan, requested that the money be used to fund this litigation in September 2020. Notably, Mr. Hoffman is also part of the ‘PayPal Mafia’ group of business leaders and investors, whose ranks include fellow billionaire Peter Thiel, who famously financed Hulk Hogan’s lawsuit against Gawker Media that led to the company’s bankruptcy. Mr. Trump’s lawyers argued in the letter sent to the court that the trial should be postponed for one month, in order to allow their team to investigate the funding. The judge, Lewis A. Kaplan, refused the requested postponement, but stated that he would permit Mr. Trump’s lawyers to pursue a ‘narrow inquiry into the funding issue’. It may be notable for other similar cases which have received third-party funding, that the disclosure of the financing did not create an opportunity for the defendant to further delay the trial.
Case Developments Commercial

$50 Million Settlement in ‘Stolen Generations’ Class Action Approved by NSW Supreme Court

Class actions that are backed by third-party litigation funding can be an incredibly powerful tool to support marginalized communities seeking legal redress, but these situations can attract criticism if it appears that funders are taking the lion’s share of any financial reward. However, the resolution of the Northern Territory ‘stolen generations’ lawsuit has demonstrated that this is not always the case, as the victims will be receiving the vast majority of the now-approved settlement.  Reporting by The Guardian details the ruling by the New South Wales supreme court, which approved a $50 million settlement in the class action after Shine Lawyers and Litigation Lending Services, stated that they would only receive 20% of the total settlement amount. Justice Robert Beech-Jones declared in his judgement that he believed it was in the best interest of all parties to approve the settlement, and that given how small the law firm and funder’s deductions were, he ‘wouldn’t even hesitate about approving it at a macro level’.  Of the 20% that will be deducted, Shine will receive $1.9 million to cover its costs, whilst Litigation Lending Services will receive $5.5 million as a commission and $1 million for its after-the-event insurance coverage. Shine’s joint head of class actions Vicky Antzoulatos praised the award and stated that ‘This settlement marks an important step towards acknowledging the extreme harm caused by past segregation policies and practices to First Nations peoples.’
Announcements Commercial Fundraising

Litigation Funder LegalPay Launches Super-Senior Bonds for HNIs Worth ₹ 50 crores

LegalPay, India’s first tech-based interim financier and litigation funder for commercial litigations and arbitrations, has launched Super Senior investment-grade rated bonds worth ₹ 50 Crores for High Net-worth Individuals (HNIs). Investment-grade bonds have a lower risk of default and receive higher ratings from credit rating agencies. This new investment opportunity offers HNIs a chance to diversify their portfolio by investing as little as ₹ 10,000 and earning returns up to 14 % while enjoying super senior status. These bonds have over 300x asset cover and have undergone stringent regulatory and assessment processes through LegalPay’s proprietary AI-backed cutting-edge technology. Once subscribed, these bonds will get credited to the investors’ Demat account and can be tracked in a real-time manner. LegalPay intends to handpick investment opportunities worth ₹ 250 crores for its investors during the calendar year. “We have observed a significant demand for such investment opportunities and have gained the confidence of more than 15,000 investors on our platform. We are proud to create such an exciting and lucrative investment opportunity that is available to all kinds of investors through our AI technology-enabled platform. We believe such investments will help companies retain their maximum value of assets whereas investors will reap great rewards transparently and efficiently,” said Kundan Shahi, Founder, and CEO, LegalPay. Attributing to LegalPay’s exemplary record and sector expertise, HNIs, family offices, and wealth managers are exploring this investment opportunity for a secure and reliable addition to their portfolios. LegalPay’s last opportunity, which was offered on their platform was fully subscribed in just three days. LegalPay is on a mission to mitigate the problem of financing legal expenses in India. At present, the company manages over ₹ 2,500 crores in claims under management through its AI and technology-enabled platform and expects to raise it to ₹ 5,000 crores in CY 2023. About Legalpay:  LegalPay is India’s first tech-driven fintech that specializes in legal and debt financing. It has played a pivotal role in the revival of various companies which were undergoing CIRP. LegalPay provides funds to corporate debtors who need Interim Finance that ranges from Rs. 30 Lakhs to 50 Crores. LegalPay is backed by a strong team comprising Company Secretaries, Lawyers (Alumni of India’s top-ranking college), MBA, Economists, and Charted Accountants.
Announcements Commercial Deals

BridgePoint Financial closes $10 million funding to advance Indigenous legal claims

Canadian legal funding specialist BridgePoint Financial Services Inc. ("BridgePoint") is pleased to announce the closing of a $10 million financing with Calgary-based Maurice Law, Canada's first and only Indigenous-owned national law firm. The transaction is part of a broader financing program established by BridgePoint in association with Maurice Law to promote access to justice and to expedite the fair and just settlement of First Nations' legal claims against Canada based on outstanding treaty obligations and other historic grievances.  "Maurice Law has achieved a solid track record of success in advocating on behalf of our First Nations clients. Notwithstanding government promises for a more streamlined legal resolution process over the past decade, the wheels of justice continue to turn at a glacial pace for many First Nations communities who simply can't afford to pursue these cases independently," says Ron Maurice, Founder and Senior Partner at Maurice Law. "This funding commitment from BridgePoint follows a model of third-party financing for First Nations litigation that Maurice Law pioneered. It will be an invaluable resource to assist us in leveling the playing field for First Nations and pursuing fair compensation for our clients who have suffered enormous economic hardship and social injustice as a result of the myriad breaches of the Indian Act, treaties, and fiduciary duties of the Crown in administering reserve lands and other assets for First Nations."  Key to the program is a bespoke legal expense insurance policy that offers added security to provide Maurice Law with the funding it requires to advance claims for First Nations on a "no win, no pay" arrangement. This is critical to promoting access to justice because the costs of researching and litigating these historical claims on behalf of First Nations can be prohibitive. This tailored approach to litigation financing significantly reduces risk to lenders and provides peace of mind for Maurice Law and its clients. "We are very pleased to extend our financial support to Maurice Law and its clients through this $10 million financing, which is modelled on various case-specific funding transactions we have provided to date. BridgePoint has enjoyed a long, supportive relationship with the firm, and our increased commitment to this program reflects our belief in their experience and leadership in the enormously impactful arena of Indigenous law," says Stephen Pauwels, Co-founder and Principal at BridgePoint. "We view ourselves as innovators in the legal finance market, and this was a sophisticated deal involving highly specialized legal expense insurance coverage.  We are very pleased with the result and the opportunity to further our support of Maurice Law and their clients. We hope the program will make a significant, positive impact for First Nations in their pursuit of justice for their meritorious claims," concludes Pauwels. About BridgePoint Financial BridgePoint Financial has been the leader in Canada's legal finance market since 2005, offering innovative and strategic funding solutions for lawyers and their clients. We have trusted relationships with over 1,500 law firms across the country, gained through our funding participation in over 60,000 cases to date. We continually develop our industry-leading products and services, providing an exceptional experience and favourable outcomes for our clients in the personal injury, wills & estates, family law, expropriation, and other legal practice areas. To learn more, please visit bridgepointfinancial.ca
Announcements Special Features

Funding Opportunity: Partnerships in Social and Environmental Disputes in the Amazon

Daniel Cavalcante is an experienced Brazilian lawyer, and seeks partners to structure partnerships in disputes involving indigenous and socio-environmental rights against large global companies that have business activities in Brazil. Daniel Cavalcante has an excellent portfolio of opportunities already filed, and many cases to file against large global companies in Brazil and even abroad. With extensive experience in litigation related to the environment and indigenous rights, he is looking for financial partners to structure a partnership that aims to share fees in collective claims. Cavalcante believes that by joining forces with investors interested in financing litigation, he will be able to expand access to justice for vulnerable populations and protect the environment more efficiently, as collective demands are capable of causing impact at scale. In addition, Cavalcante points out that these processes have great potential for financial return. Companies that ignore environmental laws or indigenous rights can be fined and forced to compensate affected communities. When filed collectively, these claims can generate a significant amount of legal fees. If you are an investor looking for investment opportunities that bring social and environmental benefits, contact Daniel Cavalcante and be part of this justice and sustainability movement. Cavalcante maintains that a good structured partnership with his office can help ensure that companies comply with current legislation and protect the environment and the rights of indigenous populations. It is worth mentioning that Daniel Cavalcante is an experienced and renowned professional who has worked in several successful cases in Brazil. Among his most notable achievements are the millionaire lawsuits in defense of the indigenous peoples of the Brazilian Amazon, in which he successfully participated. Therefore, with his vast legal knowledge and his dedication mainly to the indigenous peoples of the Amazon, Daniel Cavalcante has stood out as one of the main socio-environmental lawyers in the country and sees an excellent opportunity for financial return for partners and investors who believe and invest in these demands. Watch Daniel Cavalcante's presentation on Youtube: https://youtu.be/1XHTL8R8Iq4 Attorney Daniel Cavalcante's email: danielcavalcant.adv@gmail.com
Commercial

Claim Language as a Determining Factor in Patent Infringement Litigation

Whilst patent litigation remains a priority target for many funders, there is no doubt that it is an area of heightened risk that often requires both extensive levels of due diligence and large capital commitments to reach a successful conclusion. Funders must evaluate a myriad of factors when assessing which patent infringement cases to pursue, and amongst those factors, one funder argues that the quality of the patent assets and the specific wording of claim language are the keys to success. A new piece by GLS Capital focuses on the challenges of underwriting patent litigation finance, exploring the ‘outsized role’ that patent claim language plays in determining the viability of any case. It is the quality and specificity of this claim language that is often used by funders to decide on whether or not a successful claim can be brought, with both the precise wording and scope of the patent claims playing a pivotal role.  The quality with which the language is constructed can either mitigate or exacerbate issues that can arise, such as whether a claim is ‘properly supported or enabled by the patent’s specification’ or if there are ‘non-infringing alternatives that may affect the damages analysis.’ GLS emphasize that because of the vital role the claim language will play in any patent infringement lawsuit, patent owners should ensure that they are retaining the services of a skilled and forward-thinking patent drafter who can anticipate what issues could determine a patent’s strength in court.
Commercial

The Role of Litigation Finance in ESG Initiatives

At its most basic level, litigation funding is an alternative asset class that provides an investment vehicle that can achieve a lucrative return on invested capital. However, the practice plays a much more important role when it is considered within the context of litigation finance’s power to widen access to justice, as well as push for meaningful change when tackling social and environmental abuses.  In a post by No Impunity, an impact litigation funding platform that focuses on human rights and environmental abuse, the role of litigation finance in leading the way to achieving social and environmental justice is explored. At the core of the argument is the fact that litigation funding is key to ‘leveling the playing field’ between large corporate entities with vast financial resources and smaller businesses, communities and individuals who have suffered harm from corporate malpractice. Beyond the base capital that is required to fight this type of ESG litigation, No Impunity also highlights the fact that funders can support litigants who might otherwise be powerless, such as marginalized communities or even whistleblowers who reveal such corporate and government wrongdoing. In supporting these kinds of legal action, litigation funding becomes a powerful tool for reasserting some level of accountability both in the private sector and where state or local governments fail to meet their obligations to citizens.
Case Developments Commercial

Review of Quinn Emanuel’s Fee in Obamacare Class Action Raises Questions for Litigation Insurance

Alongside the growth of the litigation funding market is the equally important role that litigation insurance plays in the industry, allowing all litigation participants to reduce their risk profile whilst still pursuing meritorious cases. However, an ongoing review of a law firm’s awarded fee could highlight the risk taken on by litigation insurers, specifically those providing judgement preservation insurance policies. An article by Bloomberg Law provides an overview of the issue which arose following a class action brought by Quinn Emanuel Urquhart & Sullivan, which in 2020, successfully secured $3.7 billion for health insurers who had not been paid by Congress for providing higher risk policies under Obamacare. However, whilst Quinn Emanuel received a $185 million fee for its work in 2021, this fee was endangered in January of this year when the Federal Circuit ‘ordered a district court judge to recalculate the award’. The role of litigation insurance enters the picture because Quinn Emanuel had taken out a judgement insurance policy that is designed to secure a portion of the award if it is appealed or overturned, which happened in the Obamacare class action after the health insurers objected to the size of the award. Charles Agee, CEO of Westfleet Advisors, suggests that if the litigation insurer incurs a significant loss in this case ‘it could really have a broader chilling effect’ on the practice. Whilst there is the question of whether insurers are ready to pay out such claims, Tom Baker, professor at the University of Pennsylvania Carey Law School, argues that insurers ‘are definitely going to pay in the beginning because otherwise the market will go away’.
Commercial

How Portfolio Financing Can Support Law Firm Growth Strategies

Whilst single case financing from third parties represents a useful tool for law firms, one funder argues that these businesses should also explore portfolio financing as part of a strategy to maintain growth in the face of market instability. In an article published in Lexology, Amy T. Geise and Sarah Jacobson, investment managers and legal counsel for Omni Bridgeway, argue that there are multiple uses for portfolio financing that law firms should look to take advantage of to fuel growth. Firstly, Geise and Jacobson suggest that utilising portfolio financing will allow these firms to remove the uncertainty of litigation costs from their balance sheets, which in turn will allow them to increase their market share. Portfolio funding provides law firms with the opportunity to offer increased fee flexibility to clients, thereby attracting clients who might otherwise have avoided pursuing litigation due to their own cost pressures. Secondly, the authors argue that this kind of financing can be used to invest in the law firm’s own growth plan by avoiding otherwise necessary austerity cuts, and instead cover expenses or investing in internal improvements for the firm. This could mean using funds to expand a firm’s footprint, attract new employees and possibly most importantly, retain existing talent. Finally, Geise and Jacobson point to the value of portfolio financing as a risk management tool, allowing law firms to mitigate the more substantial risk of pursuing a single large contingent fee case. Furthermore, this influx of capital counters the potential of waiting years to realize the financial return of unresolved litigation.