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Case Developments Commercial

Intel and VLSI Seek Dismissal in Microchip Patent Dispute

Patent dispute cases have dominated industry news in recent months, both due to them being among the most active areas for litigation finance involvement, and also due to the number of high-profile cases that have put the spotlight on funding disclosure. One of these cases appears to have found a resolution just before the end of the year, as VLSI and Intel have both agreed to drop their respective claims and counter-claims in the microchip patent dispute. Bloomberg Law covers this latest update which has been ongoing since June 2018, with a joint filing revealing that both parties are seeking dismissal and moving to drop their claims, with neither side receiving any financial payout. According to the article, the resolution contains no remuneration for either party, and also affirms that VLSI will agree to not take any further legal action regarding these microchip patents. The case had attracted attention as VLSI was caught in the crosshairs of Judge Colm Connolly’s April standing order, which mandated additional disclosure around the plaintiff’s litigation funding arrangements. Whilst VLSI had provided further disclosures, Judge Connolly and Intel both argued they were still failing to comply, and then in October, Connoly requested briefs from all parties as to whether the suit should be dismissed for VLSI’s failure to meet the court’s disclosure requirements. Whilst additional briefs were expected in January, these are unlikely to go ahead, after both Intel and VLSI have requested the case be dismissed. However, observers will now likely be closely watching the Nimitz patent case, which has faced increasing scrutiny from Judge Connolly regarding disclosure of its litigation funding arrangements.
Commercial Legal Innovation

Tokenization of Litigation Funding Could Widen Access to Justice

Litigation finance represents a potent solution to the access-to-justice issues facing America’s legal system. However, third-party funding still faces barriers to entry, both in terms of a lack of general awareness of its availability, and how it can be best accessed and utilized. Writing in Law.com, Ron Lasorsa, managing general partner at Victory Litigation Fund, argues that digital transformation, and in particular, tokenization, is the key to unlocking access to litigation funding by opening pathways for more capital and further democratizing the judicial system. Lasorsa points out that it has been three years since the first lawsuit was tokenized, and has since become a more commonplace practice by funders. By embracing tokenization and thereby allowing for the effective crowdfunding of lawsuits, the litigation funding market can expand beyond the borders of the small group of established litigation funders. By widening the number of sources of capital, the individual risk can be reduced, and in the process, increase the liquidity of the market. Furthermore, Lasorsa highlights that ‘smart contracts’ on the blockchain would avoid the difficulties of ensuring payouts from funded wins are delivered on-time and without difficulty. Finally, he argues that tokenization would increase opportunities for activist investors, rather than commercial funders to finance litigation, especially within the ESG arena.
Consumer

RNC Funding of Trump’s Legal Campaign Undermines GOP State AGs’ Attack on Litigation Funding

Litigation Finance Journal recently reported on a group of 14 state attorneys general that have called for action from the Department of Justice to review potential threats to U.S. national security from foreign adversaries' engagement of litigation investment. Litigation funders and industry advocates have new ammo in response to the AGs’ claims, given recent news of the RNC funding former President Donald Trump’s various legal entanglements.  According to ABC News, RNC leaders earmarked $1.6M in legal funding to support President Donald Trump's defense over lawsuits brought by New York Attorney General Letitia James. Meanwhile, the United States Chamber of Commerce Institute for Legal Reform's research has prompted 14 state attorneys general to ask for the Justice Department to assess national security risks of adversaries 'undermining' the United States by engaging litigation funding and third party investment vehicles.  The group of 14 state attorneys general are concerned about foreign adversaries 'weaponizing' United States legal frameworks via litigation investment, to attack critical national industry and infrastructure, such as energy sectors. The group of 14 seeks the Department of Justice to detail how a network of federal agencies could engage a blueprint for defending United States independence from international litigation investors, hostile groups, agencies or governments such as Russia and China. This latest attack on the industry, prompted by the U.S. Chamber of Commerce, is simply another attempt to undermine the nascent and growing litigation funding sector. It is ironic, given that in the case of Consumer Legal Funding–which the Chamber specifically targets–the funding in question does not go to support legal fees, but rather to finance claimants’ livelihoods while they remain injured and unable to work.  While the RNC’s funding of Trump’s legal battles does not constitute foreign investment, it illustrates the acceptance of third party legal funding across political lines, and should be noted by industry advocates looking to respond to the negative publicity put forth by the U.S. Chamber. 
Consumer

Bloomberg Law Reports Litigation Finance is an Investment in National Integrity

The United States Chamber of Commerce Institute for Legal Reform recently warned that litigation finance is a potential risk to national security. Bloomberg Law has published a rebuttal to such claims, hailing Consumer Legal Funding as a cornerstone of many United States households seeking much needed cash flow during the litigation process.  Bloomberg Law claims that Consumer Legal Funding poses no risk to United States national security. Bloomberg Law's opinion piece does draw a distinction between consumer and commercial litigation investment. With a focus on consumer funding, Bloomberg Law concludes that many Americans can only pursue justice through the facilitation of litigation investment as a cash flow facility.  With the average Consumer Legal Funding contact around $2,000-$3,000, Bloomberg Law concludes that national security is certainly not at stake.  Bloomberg goes so far as to call the Chamber of Commerce's position on consumer litigation investment a 'fallacy' of composition logic.
Commercial People Moves

Former LCM Investment Manager Launches Versaras

As we head into 2023, another new funder has entered the growing litigation funding market. Revealed in a LinkedIn post, Matthew Denney announced the launch of Versaras, a new legal finance and consultancy firm which is seeking to provide “outsourced dispute finance and funding solutions, and non-recourse investments in Real Estate.”  Prior to founding Versaras, Denney has accumulated a wealth of experience across the legal and finance sectors, having most recently served as an investment manager and head of origination in EMEA for Litigation Capital Management.
Commercial Fundraising

Boutique Investment Firm Launches with a Focus on Cross-Border Disputes

As the litigation finance industry continues to grow in both established and nascent jurisdictions around the globe, new funders are launching investment firms dedicating a significant portion of their capital to this industry. As we close out the year, this trend does not appear to be slowing, with the launch of a new boutique investment firm: Inweasta. Interviewed by EU Reporter, Inweasta’s Hong Kong CEO, Annie Chan Wai Kwan, discussed the new company’s focus on special situation investing, with an eye towards international disputes resolution and litigation funding. The company is looking to bridge the gap between East and West, bringing expertise to complex cross-border disputes and litigation finance cases that require tailored solutions. Inweasta was founded and is owned by Andrei Elinson, who brings 20 years of experience in commercial disputes, distress assets management and private equity M&A.
Consumer

State AGs Join Chamber of Commerce’s Call for Action Against Foreign Litigation Funding

Recent discussion around the risks of litigation funding have highlighted the potential threat of foreign actors using third-party funding of lawsuits to harm U.S. national security. This claim, which was put forward in a report by the U.S. Chamber of Commerce’s Institute for Legal Reform, a prominent industry antagonist, has now found support among state officials, as a group of 14 state attorneys general have called for action from the federal government to review this alleged threat. Outlined in an article by Reuters, the letter sent to U.S. Attorney General Merrick Garland was signed by these Republican state AGs led by Georgia’s Chris Carr and Virginia’s Jason Miyares. The letter requested that the Justice Department outline what measures it has taken to address the use of third-party funding by foreign entities, stating that the potential of adversarial nations using the process to undermine American economic or security interests was a serious threat. Whilst the Justice Department did not provide Reuters with a comment in response to the letter, the International Legal Finance Association (ILFA) released a statement arguing that the letter was merely a repetition of the Chamber’s claims and was not supported on any factual basis. Eric Schuller, President of the Alliance for Responsible Consumer Legal Funding (ARC), stated the following: “The funds that ARC companies provide consumers are not used to pay for the cost of litigation and bringing cases forward. The funds are used to cover household needs, such as keeping a roof over consumers’ heads.”  Schuller went on to note that “If there is a concern as to who is funding the lawsuit itself, then any proposed regulation or legislation needs to concentrate on that aspect, and not on consumers who need funds to make ends meet while their cases make their way through the legal system.”
Announcements Case Developments Commercial

Class action lawsuit progresses in London against Visa and Mastercard to challenge card payment fees affecting UK businesses

A significant class action lawsuit against Visa and Mastercard has progressed at the UK’s specialist competition tribunal. The Competition Appeal Tribunal (CAT) has set a date in April 2023 for a Collective Proceedings Order hearing, which will determine whether the claim – on behalf of a large number of businesses seeking damages for allegedly unlawful charges – can proceed to a full trial.  Harcus Parker, a UK-based commercial litigation law firm specialising in group litigation, competition litigation and class action lawsuits, has brought the corporate card claim at the CAT, the UK’s specialist judicial body for hearing competition cases. The class action seeks compensation for UK businesses, which were charged Multilateral Interchange Fees (MIFs) for accepting payments using corporate* credit cards, as well as for both credit and debit cards used by overseas visitors.  The CAT has published the claim on its website and has now agreed to hear the application for a Collective Proceedings Order.  Harcus Parker claims that Visa and Mastercard have forced banks to agree to a level of MIFs set by the two giants, which are “anti-competitive and unlawful”.  “We want to ensure businesses across the UK economy are properly compensated.  We are making a stand against unlawful interchange fees, which should be abolished. Both the UK Supreme Court and the Court of Justice of the EU have condemned this practice for consumer credit and debit cards. The UK courts should now clamp down on commercial card fees and consumer card inter-regional fees,” said Jeremy Robinson, competition litigation partner at Harcus Parker.  Mr Robinson added: “UK businesses in the travel, hospitality, retail and luxury sectors are particularly hurt by Mastercard and Visa’s multilateral interchange fees and we are pleased that this important claim has been endorsed by a number of leading trade bodies including UKHospitality and ABTA.”  Multilateral Interchange Fees make up the greater part of the service charges levied by banks on businesses when customers pay by card.  Typically, for every £100 spent, up to £1.80 is charged on payments made by corporate cards, or cards used by overseas visitors – costs which are borne by companies throughout the UK.   Since 2015, EU law capped Multilateral Interchange Fees at 0.3 percent on consumer credit card transactions, and 0.2 percent for consumer debit cards. However, this cap did not apply to corporate cards or for consumer card inter-regional transactions.  These sales have continued to attract fees of up to 1.8 percent per transaction.  Harcus Parker accuses Mastercard and Visa of requiring banks to charge anti-competitive MIFs on businesses. These MIFs for corporate and inter-regional payments should be zero per cent, say Harcus Parker.  The class action is open to all businesses, including large international companies and local businesses, as well as some non-UK companies. Many of these businesses, particularly in the travel and hospitality sectors but also the luxury sector too, have been particularly hard hit by Brexit, Covid-19 and the current economic climate.  UK businesses are invited at this stage to register their interest online at www.commercialcardclaim.co.uk.  Those businesses with an annual pre-Covid turnover of £100 million or more will be invited to opt-in to the claim.  Businesses with a turnover under this threshold who have registered online will be automatically included unless they choose to opt out.  A number of trade bodies have endorsed the claim, including: 
  •     ABTA, which represents over 3,900 leading UK travel brands; 
  •     UK Hospitality, which represents 740 members representing many businesses across the UK; 
  •     UKinbound, which represents 330 businesses; 
  •     Tourism Alliance, which represents 65 associations and organisations, which in turn comprise thousands of potential claimants; 
  •     Advantage Travel Partnership, which represents 350 businesses with over £4.5billion annual turnover and which officially endorsed the case at its 2022 annual overseas conference. 
The CAT will hold a ‘certification hearing’ between 3-5 April 2023, when it will decide whether the case can go forward to trial, which is likely to take place in stages in 2024 and 2025.  The case is financed by a third party litigation funder, Bench Walk Advisers, and is fully insured.  *Corporate cards are a type of commercial card, sometimes known as a company or business card.  The served claims can be found on the Competition Appeal Tribunal website:  Harcus Parker is a commercial litigation firm.  It specialises in bringing and defending complex claims, often involving large groups of claimants.  Founded by Damon Parker in 2019, the firm is a recognised market leader in group litigation, case management and litigation funding.