The Second Circuit upheld the $5 million verdict in Carroll v. Trump, rejecting President Trump’s claims of trial court errors, including the handling of litigation funding evidence. Trump’s legal team argued that litigation funding for E. Jean Carroll’s lawsuit, provided by an anonymous nonprofit, was relevant to her credibility and potential bias. The court disagreed, emphasizing that such evidence had minimal probative value.

As reported in Reason.com, the court noted that Carroll’s case was primarily taken on a contingency fee basis, with supplemental funding obtained by her legal team in 2020. Carroll had little involvement with the funding arrangement, learning about it after the fact and having no subsequent discussions with her counsel about it for years. The appellate court agreed with the trial court’s finding that Carroll’s lack of engagement with the funding made it irrelevant to assessing her credibility.

Trump’s team had argued the funding demonstrated bias or a politically motivated agenda, but the court dismissed this, highlighting that Carroll publicly accused Trump of sexual assault long before the funding was secured. Additionally, Carroll and her key witnesses had openly acknowledged their political opposition to Trump, making the funder’s potential political affiliations redundant in establishing bias.

The court emphasized that litigation funding rarely impacts credibility and that introducing such evidence risks unfair prejudice and jury distraction. This decision reinforces the judiciary's cautious approach to litigation funding disclosure in trials.

Emmerson PLC, the mining company focused on the development of the Khemisset potash project in Morocco, has secured $11 million in legal funding for its dispute against the Moroccan government.

As reported in Business Insider, Emmerson obtained the funding from an unnamed legal funder. The proceeds will be used to commence with arbitration proceedings, with white shoe law firm Boies Schiller Flexner LLP being appointed litigation counsel.

LFJ recently reported on Emmerson's search for litigation funding, including that it is pursuing an investment dispute over the government’s alleged breaches of a bilateral investment treaty (BIT) between Morocco and the United Kingdom. Emmerson is seeking to establish itself as a low-cost, high-margin supplier of potash on the African continent.

We will keep you updated as this story progresses.

Leading funders in the US and UK have been asked to identify the challenges that they are facing, as well as the opportunities they are looking towards in 2025. Respondents included senior executives at Omni Bridgeway, Therium, Parabellum Capital, Harbour Litigation Funding, Balance Legal Capital, Burford Capital, and Bench Walk Advisors.

An article in Legal Business explains that the continued calls for tighter regulation and oversight of litigation finance were top of mind for many of the funders interviewed. This was particularly highlighted in the United States, where opposition to third-party funding was characterized by Therium’s Neil Purslow as “a hostile approach to the industry from US corporates”. Matthew Harrison of Omni Bridgeway and Dai Wai Chin Feman from Parabellum were both clear in saying that the actual regulators are not inherently adversarial towards funders, with Feman stating that “there is a lot of noise but there is always noise” from those who would seek to restrict third-party funding.

Meanwhile, UK funders are growing increasingly frustrated with the new government’s gradual approach to resolving the impact of the Supreme Court’s PACCAR decision, as the industry must now wait until the completion of the Civil Justice Council’s report next year. Purslow lamented the government’s inaction and pointed towards the previous parliament’s Litigation Funding Agreements (Enforceability) Bill as the obvious solution, arguing that “there was a fix available and it could and should be done”. Oliver Hayes from Balance Legal Capital similarly described the current situation as “undesirable”, but expressed hope that “the government provides a fix which clarifies the position and resolves the questionable challenges being run by defendants around the legality of funding agreements.”

Looking ahead to the opportunities open to funders, Omni Bridgeway’s Harrison suggested that the perception of funding has shifted away from only being a solution for ‘David versus Goliath’ situations, as “many CFOs, GCs, and big firms understand that litigation finance is a very valuable risk and cost mitigation tool.” As funders continue to look to diversify their investments, Mark King at Harbour noted that in the UK, “we are seeing an increased interest in credit finance facilities with law firms”.

A recent judgment from the Court of Justice of the European Union (CJEU) ruled that EU member states can block law firms from accepting external investment in order to protect lawyers’ independence and comply with their professional obligations. The court found that EU directives governing the freedom of establishment and free movement of capital, “must be interpreted as not precluding national legislation” that prohibits third-party ownership of law firms.

Reporting in Legal Futures explains that the ruling arose following preliminary questions submitted by a German court which was overseeing a dispute between law firm Halmer Rechtsanwaltsgesellschaft and the Rechtsanwaltskammer München (Munich Bar Association). Halmer had informed the Munich Bar Association that it had sold 51 of its 100 shares to an Austrian company called SIVE Beratung und Beteiligung GmbH (SIVE). The bar association responded by informing HR that the transfer of shares was prohibited under the German Federal Lawyers’ Code, and subsequently revoked Halmer’s registration with the bar association. 

The Court of Justice’s ruling on these questions found that it was permissible for member states to block this kind of outside investment, noting that “economic considerations focused on a purely financial investor’s short-term profit could prevail over considerations guided exclusively by the defence of the interests of the law firm’s clients.” André Haug, vice-president of Germany’s Federal Bar Association, welcomed the European court’s decision and highlighted that its ruling concurred with the German government’s position that “the ban on third-party ownership is justified in order to guarantee the independence of lawyers.”

The case that came before the court was of sufficient significance that it attracted attention from member states across the continent, with observations submitted on behalf of the German, Spanish, French, Croatian, Austrian and Slovenian Governments.

The CJEU’s full judgment can be found here.

As LFJ reported yesterday, funders and law firms alike are looking to the Competition Appeal Tribunal (CAT) as one of the most influential factors for the future of the UK litigation market in 2025 and beyond. A judgment released by the CAT yesterday that found in favour of Britain’s largest telecommunications business may provide a warning to industry leaders of the uncertainty around funding these high value collective proceedings.

An article in The Global Legal Post provides an overview of the judgment handed down by the CAT in Justin Le Patourel v BT Group PLC, as the Tribunal dismissed the claim against the telecoms company following the trial in March of this year. The opt-out claim valued at around £1.3 billion, was first brought before the Tribunal in 2021 and sought compensation for BT customers who had allegedly been overcharged for landline services from October 2015.

In the executive summary of the judgment, the CAT found “that just because a price is excessive does not mean that it was also unfair”, with the Tribunal concluding that “there was no abuse of dominant position” by BT.

The proceedings which were led by class representative Justin Le Patourel, founder of Collective Action on Land Lines (CALL), were financed with Harbour Litigation Funding. When the application for a Collective Proceedings Order (CPO) was granted in 2021, Harbour highlighted the claim as having originally been worth up to £600 million with the potential for customers to receive up to £500 if the case had been successful.

In a statement, Le Patourel said that he was “disappointed that it [the CAT] did not agree that these prices were unfair”, but said that they would now consider “whether the next step will be an appeal to the Court of Appeal to challenge this verdict”. The claimants have been represented by Mishcon de Reya in the case.

Commenting on the impact of the judgment, Tim West, disputes partner at Ashurst, said that it could have a “dampening effect, at least in the short term, on the availability of capital to fund the more novel or unusual claims in the CAT moving forward”. Similarly, Mohsin Patel, director and co-founder of Factor Risk Management, described the outcome as “a bitter pill to swallow” for both the claimants and for the law firm and funder who backed the case.

The CAT’s full judgment and executive summary can be accessed on the Tribunal’s website.

Sandfield Capital, a Liverpool-based litigation funder, has reached an agreement for a £600 million facility with Perspective Investments. The investment, which is conditional on the identification of suitable claims that can be funded, has been secured to allow Sandfield Capital to strategically expand its operations and the number of claims it can fund. 

An article in Insider Media covers the the fourth capital raise in the last 12 months for Sandfield Capital, with LFJ having previously covered the most recent £10.5 million funding facility that was secured last month. Since its founding in 2020, Sandfield Capital has already expanded from its original office in Liverpool with a footprint established in London as well. 

Steven D'Ambrosio, chief executive of Sandfield Capital, celebrated the announced by saying:  “This new facility presents significant opportunities for Sandfield and is testament to our business model. Key to our strategy to deploy the facility is expanding our legal panel. There's no shortage of quality law firms specialising in this area and we are keen to develop further strong and symbiotic relationships. Perspective Investments see considerable opportunities and bring a wealth of experience in institutional investment with a strong track record.”

Arno Kitts, founder and chief investment officer of Perspective Investments, also provided the following statement:  “Sandfield Capital's business model includes a bespoke lending platform with the ability to integrate seamlessly with law firms' systems to ensure compliance with regulatory and underwriting standards.  This technology enables claims to be processed rapidly whilst all loans are fully insured so that if a claim is unsuccessful, the individual claimant has nothing to pay. This is an excellent investment proposition for Perspective Investments and we are looking forward to working with the management team who have a track record of continuously evolving the business to meet growing client needs.”