Trending Now

All Articles

3325 Articles
Commercial Regulatory Issues

Australian Chief Justice Weighs in on Class Action Debate

Chief Justice James Allsop has a lot to say about class action reform in Australia. He asserts that class actions have an inherent public benefit—one that’s in constant danger of being minimized or even forgotten. This came within days of AG Michaelia Cash revealing that the government would not continue its quest for litigation funding reforms. This includes the proposed 30% cap on payouts to third-party funders. Financial Review details Chief Justice Allsop’s statement that Parliament and other interested parties put aside personal prejudices and preconceived notions about the industry when deciding how to move forward. It’s essential, he said, that people keep in mind that class actions are vital to the public good. Some have suggested that a 30% cost and funding cap would reduce the number of spurious or low value class actions being launched. But is that happening? Evidence suggests that it isn’t. Logic suggests that no funder wants to bankroll a case without merit. Legal author Jason Betts suggests that giving claimants 70% of an award seems more fair. But is it? Especially given that funders take on 100% of the financial risk? Would this change even make a difference, or would cases simply be filed in Victorian Supreme Court instead? It’s been suggested that judges be given leeway to make or approve decisions regarding the division of award funds, because they’re able to look at each case individually rather than relying on broad mandates. We'll have to wait and see how the Aussie regulatory system shakes out. 
Commercial People Moves

Omni Bridgeway Expands Employee Roster in Australia

Litigation Finance giant Omni Bridgeway has announced some new appointments in its Investment Management team and Investment Committee in Australia. Omni Bridgeway is a global leader in legal finance and risk management, with offices across the world. Since 1986, Omni Bridgeway has offered assistance from the first case filing through award enforcement and recovery. Market Screener details the new additions to the Omni Bridgeway team:
  • Michelle Painter SC brings decades of experience to her new position on Omni Bridgeway’s Investment Committee, where she will evaluate cases for funding with the rest of the team.
  • Christopher Kahwaji joined the Sydney team in 2021 as an Investment Manager. Formerly a class action specialist at Herbert Smith Freehills, Kahwaji’s experience managing commercial disputes and complex litigation is significant.
  • Chris Liscica, formerly of the litigation and regulatory team at DLA Piper, brings extensive experience to Omni Bridgeway. His specialties include general liability, personal injury cases, and professional indemnity.
  • Phillipa Briggs joins the Sydney team as an Investment Manager where she will engage in due diligence and management of funded cases. Her experience includes time at Hunt & Hunt, and in private practice at Minter-Ellison.
  • Grant Covington, formerly Special Counsel at Wotton & Kearney, joins the Sydney team as an Investment Manager. He was also Special Counsel with Moray & Agnew.
Omni Bridgeway CIO Tania Sulan expresses delight in welcoming her new colleagues, and is confident of their ability to improve the client and investor experience.
Consumer

Choosing the Right Consumer Legal Funding Company

You have a meritorious case with a good chance of winning. That’s good news, right? But did you know it could be months or even years before that money is in your hands? Appeals, delayed negotiations, unwillingness or inability to pay...all of these can contribute to an even longer wait to get what you’re owed. By availing yourself of the services of a Consumer Legal Funding company, you can get that money when you need it most. Finance Monthly details what you should look for in a Consumer Legal Funding company, and how to determine which is the best one to meet your specific needs. The first thing to keep in mind is that before signing any contract—speak with your lawyer. They will have a solid understanding of how lawsuit loans work in a pre-settlement context. There are three main factors that deserve consideration:
  • Duration for transferred funds. Many plaintiffs are in a tight financial spot while waiting for a case to be resolved—and therefore may require immediate funds. Ideally, the funding process from application to approval shouldn’t take more than a few business days once the funder has received the necessary information from your legal team. It’s vital that you ask how long the loan process will take from start to finish.
  • Transparency. A reputable company will be clear and concise when explaining interest rates, the payoff table (what you’ll pay, and under what circumstance). This will allow you to easily compare the various companies you’re considering.
  • Interest rates. Obviously, the amount you’ll ultimately pay back is important. Companies should be open about rates and be willing to provide numbers in writing. Be suspicious of any company that doesn’t.
Knowing what to look for and which questions to ask is an essential part of finding the right legal funders for your situation.
Commercial Legal Innovation

Bribes, Grease Payments and Global Litigation Finance 

Both competition law and consumer protection law focus on eliminating global marketplace manipulation. Deceptive acts and practices in many offshore businesses are byproducts of illegal bribes, or legal grease payments. Exclusionary price fixing of international virtual currency markets suggests that innovation is necessary to level the playing field.  Boston College International and Comparative Law Review researchers have suggested that ‘greasing the palms’ of international regulators is not necessarily forbidden. During the COVID-19 pandemic, many virtual currency firms made significant efforts to increase earnings via marketplace manipulation. Conditional regulatory approvals have prompted deceptive advertising practices which led to marketplace fraud and earnings manipulation. Famous international banks have made a business out of regulatory arbitrage frameworks … allegedly issuing bribes when necessary.  To navigate such bad behavior, price fixing agreements can be negotiated as a litigation finance tool. Engaging virtual currency fixing, as with Proof of Transfer (POX) powering NYCCoin and MIA Coin, supports the idea of government “donation bounties.”  Such practices are a hot topic of discussion for United States innovation policies.  The Department of Justice has recently begun to consider various instances of litigation finance solutions to help eliminate cross-border bribery and marketplace manipulation architectures.  For reference, we highlighted 32 key points in“The Foreign Corrupt Practices Act: It’s Time to Cut Back the Grease and Add Some Guidance.” Feel free to scan the doc and see our key takeaways (highlighted inside). 
Commercial

Podcast: The Litigation Finance Asset Class 

With the litigation finance industry experiencing meaningful growth, many investors are finding the space to be an attractive alternative asset class. The United Kingdom has witnessed litigation finance investment increase twofold, now valued at £2B a year.  A new podcast from Robert Rothkopf, Managing Partner of Balance Legal Capital, explores industry trends driving venture capital and private equity investments in litigation finance. Rothkopf is credited with being a pioneer in the UK’s third party funding industry.  Balance Legal Capital is a member of the Association of Litigation Funders (ALF). ALF serves as an independent association engaged by the Ministry of Justice in self-policing England and Wales litigation funding agreements. Listen to the podcast to learn more about Rothkopf’s insights.
Commercial

Pandemic-Powered Third Party Funding 

During the COVID-19 pandemic, world economies came to an abrupt halt. Nearly every industry was forced to reimagine itself in a bid for survival. Two years into the new normal, litigation finance’s exponential growth has been buttressed by an onslaught of COVID-19 related litigation claims.   Bill Tilley of Amicus Capital Group recently published a LinkedIn essay exploring third party funding trends witnessed during the pandemic. Tilley highlights that a large number of new litigation investors have joined the market to meet the demand for claims. With industry awareness on the rise, many regulators are looking to introduce third party funding mandates with consumer protections in mind.  Tilley forecasts that quality litigation will continue to experience increased costs, spawning a need for alternative litigation lenders. The time to a verdict is slowing, as the pandemic has contributed to litigation supply chain disruptions. Third party investors must be willing to devote time and resources and be patient as they await resolution.   Tilley says, with the pandemic waning, third party investment is continuing to surge with exponential year-on-year increases well into 2030. 
Announcements Commercial Fundraising

BALANCE LEGAL CAPITAL COMPLETES FIRST CLOSE AT GBP130M IN NEW LITIGATION FUND

BALANCE LEGAL CAPITAL LLP, a London-based provider of litigation and arbitration finance, today announced it has raised a further GBP 130M from 8 institutional investors in the first close for a new UK fund, bringing Balance’s total AUM to over GBP 250M. Balance is targeting Q2 2022 for a second and final close.

The investors in the new fund include repeat investors from Balance’s prior vehicles plus further global institutional investors located across the UK, US, Switzerland, the Nordics, and Australia. In addition to its discretionary capital pools, Balance has direct access to significant further co-investment capital from its investors, enabling it to fund the largest litigation budgets.

As ever, Balance has delegated authority over its litigation investment decisions.  Balance will use the new funds to continue to invest in commercial disputes and class actions with a focus on disputes in common law jurisdictions (ex. USA), particularly the UK and Australia.  Balance invests across all sectors and commercial claim types including contract, tort, shareholder disputes, joint venture disputes, competition, class actions and more.

Robert Rothkopf, Managing Partner of Balance Legal Capital, said “We are thrilled to announce the launch of our new fund, which will further enhance our ability to support claimants and law firms in litigation proceedings.  This is the second multi-investor fund we have launched in two years and demonstrates the strong demand for our capital.  We’re grateful to our investors for continuing to back us in our new fund, to our high-calibre team at Balance, and to the law firms, barristers and insolvency practitioners we partner with to obtain justice for businesses and individuals.” 

Balance Legal Capital LLP was advised on the establishment of its new fund by Herbert Smith Freehills LLP, London.

About Balance Legal Capital

Balance Legal Capital was founded in 2015 by Robert Rothkopf (former Herbert Smith Freehills litigator) and Simon Burnett (a former Freshfields litigator).  Its investment committee includes Lord David Gold (former global senior partner of Herbert Smith and head of disputes) and Ian Terry (former managing partner of Freshfields and global head of disputes).  Fraser Shepherd (former litigation partner at Gilbert + Tobin, Sydney), Donny Surtani (former litigation partner at Herbert Smith Freehills) and Nick Gardner (former head of Intellectual Property Litigation at Herbert Smith) are senior advisers to the investment committee.

Example cases funded by Balance include (1) the audit negligence claim by the Patisserie Valerie Group (in liquidation) against Grant Thornton UK LLP (solicitors – Mishcon de Reya LLP); and (2) group proceedings for vehicle owner clients of Leigh Day in the emissions claims against BMW, Vauxhall, Peugeot, Citroen for selling diesel vehicles allegedly containing unlawful emissions defeat devices.

Balance Legal Capital LLP is a member of the Association of Litigation Funders of England and Wales (ALF) where Robert Rothkopf is a board member.  Balance Legal Capital LLP is also a founder member of the Association of Litigation Funders of Australia (ALFA) where Simon Burnett is a board member.  Balance Legal Capital LLP is authorised and regulated by the UK’s Financial Conduct Authority and by the Australian Securities & Investments Commission.

https://www.balancelegalcapital.com

Case Developments Commercial

Appeal Tribunal Refuses Google’s Request for ATE Premium Disclosure

The Competition Appeals Tribunal recently ruled that requiring disclosure of after-the-event insurance premiums would amount to an unfair advantage. In this case, tech giant Google sought disclosure in the name of transparency. Law Gazette details that the CAT is concerned with transparency as it pertains to funding agreements in collective proceedings. Bridget Lucas, QC referenced the unique nature of class action proceedings—which necessitate CAT approval of a proposed class representative. She explains that this stems from the knowledge that a PCR’s funding arrangement is relevant to CAT’s assessment of the CPO filing. CAT found that funding agreements and ATE premiums must only be disclosed if they are relevant. The ruling stems from a claim brought by over 19 million claimants regarding app distribution and payment processing. The case could be worth nearly a billion GBP. Vannin Capital is funding the collective action. The special regime for collective actions does require claimants to disclose funding agreements. Ultimately though, the court decided that the need for disclosure in this case is outweighed by an unwillingness to give one side a tactical advantage.
Commercial

Why Law Firms Should Welcome Litigation Funding

It’s common for law firms to adopt ‘thin reserve’ strategies to keep budgets lean and liquidity high. But when a pandemic occurs, it can leave the legal services industry in a lurch. Augusta Ventures explains that there are numerous reasons for law firms to consider litigation funding as an option. Litigation Finance can be a valuable tool in terms of working capital. When liquidity issues impact entire industries, collecting on bills can be a challenge. When firms fail to pay their own bills in a timely way, confidence erodes and reputations can be damaged. But litigation funding can be used for working capital, monetizing existing legal assets while alleviating the money crunch so many firms are feeling. Some firms address shortfalls by delaying or lowering partner distributions—which most partners are not generally in favor of. This option can engender bad will among partners and staffers, and may send the signal that a firm is in dire financial straits, thus lowering its standing in the field. Litigation Finance can address these issues in a timely and low-risk manner. Third parties can fund single cases or portfolios, providing non-recourse funds that can be used to address budget shortfalls, or as working capital to ensure bills are paid and partners are compensated. As Litigation Finance continues to grow and adapt to the needs of firms and clients, new and innovative solutions will present themselves. Presently, firms would do well to consider the benefits of Litigation Finance in terms of liquidity and reputation.