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Commercial Deals

Bench Walk to Fund Environmental Claim at UK Competition Appeal Tribunal

Following the COP 27 summit earlier this month, there has been much discussion about the role litigation funders can play in financing claims against companies that fail to meet ESG standards, or act with disregard towards the environment. A new case brought against UK utilities companies demonstrates this very potential, as a major industry funder has stepped in to finance the claim. Announced in a release by UK law firm, Leigh Day, a new competition damages claim being brought against water and sewage management companies is being funded by Bench Walk. The opt-out claim, brought on behalf of UK households, alleges that these companies unlawfully disposed of untreated sewage and wastewater into public waterways. Zoë Mernick-Levene, partner at Leigh Day, noted that this is a landmark case, as it is the first environmentally-focused claim being brought before the Competition Appeal Tribunal (CAT). The funding agreement and additional ATE insurance for the case were brokered by Factor Risk Management, whilst AlixPartners are attached to the case in the role of economic experts.
Consumer

Funder Agrees to $1 Settlement with CFPB over 9/11 Fund Litigation

As the litigation finance industry has matured, the possibility of funders running afoul of legal oversight grows. This was the case in a recent settlement between RD Legal Funding LLC and the U.S. Consumer Financial Protection Bureau. Reporting in Reuters covers the announced settlement, which highlighted the funder’s alleged predatory lending practices with 9/11 first responders, where it allegedly charged 250% interest on loans to these clients. While RD Legal did not admit any wrongdoing, the settlement required the funder to pay a whopping $1 for breaking New York’s state law concerning high-interest loans. RD Legal had argued that the financial assistance it provided to the first responders were not loans, but instead ‘sales of legal receivables’ as part of its funding agreements. The CFPB and the New York Attorney General’s Office had originally sought higher damages outlined under the state’s consumer protection law. However, the CFPB stated that this settlement provides the first responders access to the victim relief fund, totalling $482 million–hence the miniscule agreement.
Announcements Commercial People Moves

Omni Bridgeway APAC team expands and announces senior appointments

Omni Bridgeway is delighted to announce new arrivals to its growing team in Asia, reinforcing the company’s leading position as the largest and most recognised dispute finance team in the market. We also congratulate senior colleagues on their promotions. We welcome Eloise Matsui as Investment Manager. Eloise joins us from Stephenson Harwood where she was a partner in the restructuring and insolvency team in Hong Kong, and previously King & Wood Mallesons where she was a member of the litigation and regulatory team. Eloise brings a wealth of expertise in restructuring, insolvency and cross-border litigation and has acted for foreign, listed and private companies, creditors and insolvency practitioners across the breadth of restructuring, insolvency, enforcement and associated litigation scenarios. Mitch Dearness joins our team as Investment Manager, bringing expertise in arbitration and cross-border litigation, with particular experience in the infrastructure, mining and energy sectors. Mitchell joins us from Herbert Smith Freehills where he was a Senior Associate in the Singapore disputes team. Kristen Smith (Melbourne) and Ewen McNee (Sydney) have been promoted to Senior Investment Managers, and Niall Watson-Dunne’s role as Investment Manager (Sydney) expands in recognition of his case management responsibilities. We acknowledge their combined extensive experience in legal finance and valuable role in the company’s development. Cheng-Yee Khong (Hong Kong) has been appointed Senior Relationship Manager, responsible for new case origination and relationship management across jurisdictions. “Our expansion is in direct response to the market’s flourishing demand for our financial solutions, and reflects our ability to attract leading talent. We are thrilled to welcome Eloise and Mitch to our wonderful team and further expand our services to clients.” Tom Glasgow, Managing Director and Co-Chief Investment Officer (APAC), Portfolio Manager – Global International Arbitration “Congratulations to colleagues on well-deserved promotions. It is the talent and hard work of our people that results in Omni Bridgeway being consistently recognised as the leading legal finance team.” Oliver Gayner, Managing Director and Co-Chief Investment Officer (APAC).
ABOUT OMNI BRIDGEWAY
Omni Bridgeway is the global leader in legal finance and risk management, offering dispute finance from case inception through to post-judgment enforcement and recovery. Omni Bridgeway is listed on the ASX and has operations around the world.
Commercial People Moves

LCM Strengthens Global Leadership with New Hire

Litigation Capital Management (LCM) has announced that it is bolstering its senior leadership with the appointment of Danny Kinnear as Head of Corporate Origination. Announced via LinkedIn, LCM’s appointment of Mr. Kinnear will draw on his vast experience across risk management and finance, building on previous accomplishments including leading Deutsche Bank’s European Structured FX Sales, and previously serving as the Head of EMEA Corporate FX Sales for Nomura. Speaking about joining the LCM team, Mr. Kinnear highlighted his desire to help “clients access innovative solutions” in all areas of financial services, and noted the synergy between his own approach and LCM’s solutions, which have positioned the firm as a “global leader in litigation funding.”
Commercial Deals

Law Firms Face Price Pressure from Clients Looking to Lower Legal Costs

Faced with global economic uncertainty, litigation funding has been classified as an investment market insulated from broader recessionary pressures. However, law firms are not seeing the same level of protection, and are facing increased competition from competitors who can offer lower prices to meet their clients’ restricted budgets. Reporting by Legal Futures highlights the results of a survey conducted by Harbour Litigation Funding, which found that 44% of law firm partners are negotiating with clients who are seeking lower legal fees, leading to 46% of those surveyed reporting clients moving business to firms with less expensive rates. This was further compounded by respondents highlighting the fact that their clients were increasingly depending on their in-house legal counsel to handle matters. Harbour’s Chief Investment Officer, Ellora MacPherson, stated that she expects these compounding factors to lead to an increased strain on law firms’ own balance sheets. MacPherson suggests that outside of lowering their prices, law firms will need to innovate through technology to reduce internal costs, whilst seeking more creative, low-cost methods of supporting clients.
Announcements Case Developments Commercial

Legal claim launched against Great Northern, Southern and Thameslink after millions double-pay for fares in London

A hearing has been set by the Competition Appeal Tribunal (“CAT”) to take place on the first available date after 20 February 2023 (the “CPO Hearing”).

The CPO Hearing is in respect of a claim launched on 24 November 2021 by Justin Gutmann, formerly of Citizens Advice, on behalf of millions of passengers who have allegedly paid twice for part of their journeys whilst travelling with Govia Thameslink Railway (“GTR”), (the “Proposed Claim”).

The Proposed Claim is against GTR (and its parent companies) which operates the following franchises:

i.                     Thameslink

ii.                   Southern

iii.                 Great Northern

Following a case management conference which took place on 15 November 2022, the CAT has confirmed a further hearing should take place so that the CAT can consider the following:

i.                     if Mr Gutmann (the person proposing to be the class representative) is suitable to act on behalf of the proposed class and should be certified to bring the claim; and

ii.                   if the Proposed Claim itself is suitable to be brought as a collective action and whether it should proceed to a full trial.

The CPO Hearing is to take place on the first available date after 20 February 2023.

Background to the Proposed Claim

Mr Gutmann alleges that GTR, as the operator of the Great Northern, Southern and Thameslink franchises has breached competition laws by charging TfL Travelcard holders too much for travel  on their routes.

Travelcard holders have already paid for their travel within the relevant TfL zones, so a Travelcard holder would only need to purchase a (cheaper) ‘boundary’ fare or ‘extension’ fare for the remainder of their route, to get to their destination. Mr Gutmann alleges that GTR does not make boundary fares sufficiently available for purchase. The claim is estimated to be worth around £73.3 million in damages.

Who is eligible?

Passengers who owned a Travelcard at any time from 24 November 2015 and also purchased a rail fare from a station within the zones of their Travelcard to a destination outside of those zones may be eligible for compensation.

What next?

The CAT will now determine whether or not Mr Gutmann’s claim is allowed to proceed to trial. If the claim is permitted to go forward, then those affected will not have to pay any legal fees, nor contact lawyers. 

Affected passengers who live in the UK will automatically be included in the claim, although they can choose to opt-out in due course.

Affected passengers who do not live in the UK will also be eligible to join the claim but must proactively opt-in.

As the case progresses, we will provide more detail as to what rail users will be required to do to either opt-in or opt-out. 

Further information 

The claim’s website and social media channels are available from the day of launch at BoundaryFares.com,  where affected passengers can sign up to receive further information regarding the legal proceedings. Justin Gutmann is also available for interview.

Commercial Legal Innovation

Litigation at the Forefront of Future Climate Activism

As we have already seen so far this year, litigation funders are keen to target capital towards ESG cases, and have even gone so far as to fund individual law firms to pursue such litigation, as was the case with North Wall Capital’s financing of PGMBM. On the back of the COP 27 summit, some industry commentators are looking to the future of such litigation, focused on holding entities that disregard their climate impact to account. In an article for Sentry Funding, Rachel Rothwell provides an overview of the current state of litigation targeting environmental issues, as well as looking ahead to how this space will evolve. Citing a study by Columbia Law School, Rothwell highlights that there are over 2,000 cases involving issues related to climate change. Furthermore, the article notes that this type of litigation has progressed from being primarily focused on misdeeds by nation states to now include corporations. Rothwell also uses the examples of cases brought against companies like Vedanta Resources and Royal Dutch Shell to demonstrate the successful impact climate activists have had in courts. The article suggests that ‘shareholder activism’ is likely to be at the forefront of future climate-related litigation, and will expand to include a broader range of companies that have less immediate impact on the environment.
Case Developments Commercial

Brown Rudnick Announces 2023 Litigation Funding Conference

As the European funding market continues to grow, the demand for industry gatherings and exchanges of ideas between thought leaders is also on the rise, giving way to another industry conference in the coming year. Building on the success of its 2022 event, Brown Rudnick announced its European Litigation Funding Conference 2023, set to be held in London on Thursday 16 March 2023. The one-day conference will feature the firm’s own partners alongside industry leaders from other leading UK and European funders, insurers and service providers. Brown Rudnick’s inaugural conference held in May of this year included speakers from Bench Walk Advisors, Therium, Burford and Deminor. Whilst the agenda for the 2023 event has not yet been released, the 2022 conference saw discussion topics ranging from ‘the rise of class actions’, to the interplay of ‘litigation funding and ESG’.
Commercial

Nimitz Appeals Litigation Funding Disclosure Order in Patent Dispute

In the evolving back-and-forth between disclosure and non-disclosure of third-party funding, it continues to be demonstrated that individual court decisions are the driving force for momentum in either direction. An ongoing patent dispute case in Delaware has reinforced this narrative, as the plaintiff seeks to appeal a court ordered disclosure of any litigation funding arrangements. Reporting by Reuters reveals that Nimitz Technologies has appealed Judge Colm Connolly’s order to reveal the specifics of its relationship with Maxevar, arguing that such information is irrelevant to its lawsuits and should remain confidential. Nimitz maintained its position that Maxevar has acted only as a consultant for the litigation and that it has not received any funding from Maxevar that would fall under Judge Connolly’s standing order to disclose such arrangements. In response to the appeal, the U.S. Court of Appeals has issued a temporary pause on the order, which will also provide the opportunity for the defendants to respond. This case also bears similarity to another of Judge Connolly’s proceedings, VLSI Technology’s patent dispute with Intel Corp, where he ordered a pause to that litigation after stating that VLSI did not sufficiently disclose details around its financial backing. Whilst the outcome of both these disclosure orders is not yet apparent, it is clear that courts will continue to engage in close scrutiny of third-party funding arrangements.