Trending Now

All Articles

3325 Articles
Case Developments Commercial

Lead Mine Owners Face Human Rights Class Action 

Augusta Ventures is funding a lead poisoning class action that may include more than 100,000 Zambians. London human rights attorneys at Leigh Day have collaborated with South African Mbuyisa Molee attorneys to file the class action lawsuit against Anglo American South Africa Limited (AASA).  Bloomberg.com reports that an AASA spokesman says that the suit is bogus, misdirected and completely opportunistic. The lawsuit alleges that AASA managed the mine in question, and for years contributed to toxic exposure to lead. Proponents further argue that lead exposure has damaged waterways adjacent to the mine. AASA’s parent company, Anglo American Plc, reported revenue of $30B in 2020, which leads many experts to suggest that the firm will look to string out any forthcoming litigation claims.  Augusta Ventures has taken on funding of the lead mine litigation class. Augusta is funded by the $2T asset management firm, Pacific Investment Management Company. With Augusta on board, it would appear that outgunning justice may be difficult for AASA over the long term. 
Case Developments Commercial

PriceRunner Launches $2.4B Anti-Competition Claim Against Google

After a seven year investigation, the European General Court upheld a $2.7B fine for Google’s breach of antitrust laws, for providing Google Shopping preference over competitors. Now the Swedish price comparison company, PriceRunner, has filed its own $2.4B claim against Google for cultivating anti-competitive behavior that allegedly disenfranchised PriceRunner’s business. CNBC.com reports that PriceRunner views the claim against Google as part of a pattern of anticompetitive behavior that has caused significant consumer suffering and has stifled entrepreneurial innovation. Furthermore, PriceRunner suggests that Google has not complied with the European Union’s ruling on abusing its search engine’s dominant position.  PriceRunner was recently acquired by the fintech firm Klarna. Similar to purchasing a litigation claim, PriceRunner’s new owners want Google to pay for PriceRunner’s lost revenue in the United Kingdom, Sweden and Denmark. The theme of reverse regulatory arbitrage is seemingly what PriceRunner hopes to profit from regarding this claim. 
Case Developments Commercial

Billionaire Seeks Litigation Bankruptcy Protections 

Guo Wengui, a notable Chinese billionaire with close connections to Republican advisor Steve Bannon, has filed for Chapter 11 bankruptcy protections. Recently, a court ordered Wengui to pay $134M in restitution after being accused of avoiding debt collection. Wengui stresses that his debts are not related to any business expenses. Wengui shares that his debts nearly all stem from litigation expenses attributed to claims and judgments against his various enterprises.  Politico.com reports that a judge has sought to seize Wengui’s yacht, previously anchored in New York. Wengui argues that he is not an owner of the yacht, but authorities have tracked the vessel, which was moved from New York Harbor down to the Bahamas. Wengui was given five days to pay a fine associated with the yach’s departure from New York against court order. Releasing a statement on social media, Wengui suggests he must file for bankruptcy given his debts may be close to $500M. He further claims that currently his net worth is somewhere between $50,000 to $100,000.  Mr. Wengui amassed a real estate fortune before going broke, according to Politico.com. Wengui’s relationship with Donald Trump advisor Steve Bannon is subject of watercooler discussion, this after Bannon and Wengui partnered to launch the G-TV media company.
Commercial

LexShares’ Litigation Funding Marketplace Review

With the pandemic beginning to ebb, the numbers are in and point to an increase in litigation funding across global markets, with some lawyers reporting up to 70%+ uptick in business. Correspondingly, litigation funders are seeing a near 60% uptick in business during the same period. Disclosures are still a hot topic for the industry, with only two high profile discovery disclosures during 2021.  LexShares recently released their industry outlook profiling the fourth quarter of 2021. Research figures suggest that over 20% of attorneys plan to explore the benefits of litigation investment in the near future. The single case is still the bread and butter of litigation finance, claiming over 50% of overall litigation business revenues. That said, asset class diversification of ligation investment is prospering, with portfolio and counterparty organization a major target for many funders.  LexShares attributes non-conformity to disclosure regulation as a positive situation, while the industry solidifies jurisdictional clarity. LexShares points to a more opaque scenario in terms of attorney compensation with the rise of litigation finance. Some suggest that partner salaries are the major beneficiaries of the industry's success.    Check-out LexShares’ full research, which outlines key facts and figures pertaining to litigation investment.
Commercial Legal Innovation

Claimants in Brazil Seek Faster Rewards 

Four years and three months; that is the average time it takes to be rewarded with justice in Brazil, according to research data released by Brazil’s National Council of Justice (CNJ). Four years to win a claim can then lead to a lifetime of seeking to execute any monetary judgements. Four years is a long time for the potentially guilty to shift cash and assets across Brazil and abroad, in a bid to exhaust any potential victims.  Fecomercio.com recently profiled the idea of claimants having the opportunity of selling their claim, or having a third party investor cover legal costs on their behalf. The benefits of this are twofold, 1): The claimant does not have to worry about funding the claim throughout the judicial system, and 2): Oftentimes, when the claimant is funded by a reputable third-party, the potentially guilty cave to pressures related to facing the heavy hand of justice.  Fecomercio.com is right to suggest that litigation funders are tasked with the responsibility of evaluating the merits of cases that come before their review. More and more, technology is being engaged to assess the validity of a claim being investable. As litigation finance continues to flourish, it may become a powerful cross-border exercise in linking technologies, where appropriate. 
Commercial

The Czech Republic’s First Litigation Funder

The Czech Republic is beginning to embrace litigation finance with the announcement of the country's first litigation investment firm, LitFin. According to Ondřej Tyleček, a partner at LitFin, the agency plans to model itself after other successful European Jurisdictions such as Germany and the United Kingdom.  Pravniprostor.cz recently profiled LitFin’s journey in the Czech Republic. Basically, LitFin is taking a successful blueprint for litigation finance and promoting the concept with hopes of exponential rewards. LitFin seems to be funding personal injury claims, which the firm itself represents (legally) in some cases. LitFin suggests that their investment in the space is a legacy play, with hopes that access to justice in the Czech Republic will increase, given the company’s funding initiatives. As litigation funding is a novel practice in the Czech Republic, LitFin’s emergence may help usher in standardized regulation. We’ll have to wait and see. 
Consumer

Politician Alleges “Lawsuit Abuse” Against Consumer Legal Funders

Is there “lawsuit abuse” happening in Iowa and elsewhere? If so, is Consumer Legal Funding to blame? One former trucker and current Iowa state senator alleges exactly that—and Governor Kim Reynolds is on board. Several bills are in the works to limit award sizes and prevent litigation funders from increasing access to justice for those who have been hurt in traffic accidents. Transport Topics News details that Republican state senator Adrian Dickey (owner of a transport company and board member of Iowa Motor Truck Association) wants to outlaw the use of litigation funding to sue trucking companies. But isn’t there a conflict of interest when the owner of a trucking company introduces a bill which protects his own company from well-funded lawsuits?  According to “experts,” consumer legal funding is on the rise and puts defense attorneys at a disadvantage. While it’s true that the funding industry is growing, it’s equally true that funders seek out cases with merit. Funding a weak case is financially irresponsible and would deplete cash reserves that could be used to support stronger, more meritorious claims. At present, Dickey’s bill SF 2085 has not moved forward. Some felt the bill required a clarifying amendment defining the ‘litigation funding’ it hopes to ban. If passed, the bill would make Iowa the only US state to outlaw third-party legal funding, leaving many average citizens without recourse should they require legal representation. Governor Reynolds spoke out in favor of the bill that advocates for a $1 million limit on awards in cases involving trucking accidents and medical malpractice. But who does this bill protect? Not legal professionals, and certainly not those who have been injured by medical malpractice. The question then becomes, who is advocating for them?
Commercial Fundraising

Funders Continue Raising Large Capital

The litigation funding boom continues. LionFish (owned by RBG Holdings) recently agreed to a GBP 20 million funding deal. Balance Legal Capital recently raised GBP 130 million for a new fund—tapping eight institutional investors. With this, Balance’s total assets under management have surpassed the GBP 20 million mark.

Legal Futures UK explains that Balance now has access to even more co-investment capital from investors. Robert Rothkopf, managing partner, stated that this is the second multi-investor fund launched in two years. He went on to say that this demonstrates an ongoing and fervent demand for the services the company provides.

LionFish, which is part of RBG Holdings PLC, funds cases run by lawyers outside RBG. Its recent deal with a sizable alternative investment firm means that the firm will fund 75% of all cases over the next two years. LionFish then would be eligible to collect a significant share of returns after the return hurdle is met. This could provide the potential for high returns well beyond LionFish’s initial investment.

LionFish will also have sole discretion on the cases they pursue, and exercise great capital flexibility. This allows the funders a more diversified risk portfolio while moving away from the current investor sales model. Managing director Tets Ishikawa explains that the new arrangement will allow for greater funding investment without returning to deployment-focused management with lower margins.

Burford Capital has made over AU $1.1 billion in new funding commitments, deploying roughly AU $841 million. Case realizations have remained lower than expected, however, due to court delays and stoppages caused by COVID. Still, as Chief executive Christopher Bogart details, writing over a billion dollars in new commitments during a pandemic is an impressive feat. It also bodes well for future returns, as these cases come to fruition.

Commercial Regulatory Issues

Should We Be Concerned About Funder/Law Firm Partnerships?

As the litigation funding industry grows, many newcomers are flocking into the sector. This in turn has led to a number of mergers and new partnerships between funders. But what about partnerships between legal firms and litigation funders? Is this a conflict of interest? Will clients be limited in their choice of funders? MONDAQ reports that there are strong arguments to be had on both sides of the issue. While it can be true that clients may feel some pressure to accept funding from those associated with their legal firm of choice, these partnerships can also increase the client’s chances of getting appropriate funding for their case. This, of course, increases access to justice. Most clients are looking for fast access to funding capital, and to fully understand the terms they’re agreeing to. If clients are getting this, choice of funders will likely take a backseat. Some jurisdictions may still maintain prohibitions on champerty and maintenance, which then have to be excised or diminished in order to allow legal funding to operate effectively.