Trending Now

All Articles

3325 Articles
Commercial Regulatory Issues

Enforcing and Monetizing Arbitral Awards in Brazil

Understanding the difference between monetization and enforcement is essential when developing a strategy to navigate a situation requiring an award to be enforced. This was discussed by Annie Lespérance, Head of the Latin American group at Omni Bridgeway. Also speaking were Henrique Forssell and Wieger Wielinga. Omni Bridgeway details that from a funding perspective, enforcement involves a funder who provides non-recourse financing to pay the cost of enforcement. After a successful recovery, expenses and a return on investment will be collected by the funder. A monetization agreement involves funders paying an advance to the claimant, plus the costs of enforcement. Funders will still receive a share of the award—or they may buy out the award or judgment to become the primary award holder. Ideally, most funders would prefer to keep their relationship with award holders active, since they are likely to have information that’s helpful to enforcement. How does enforcement work? Claimants are encouraged to consider how to enforce a judgment at the beginning of a case. Precautionary measures can then be taken early on, including stopping the sale or transfer of assets. An investigation is vital, and building a team of experienced investigators specializing in enforcement is a good start. Once the team gathers strong evidence with which to convince a court, many courts are willing to take steps to compel defendants to pay a judgment. A strong team can induce even the most reticent debtor to pay. The Brazilian economy is expansive and complex. Debtors can use sophisticated means to hide assets from creditors—offshore accounts, trusts, foreign bank accounts, and unscrupulous third parties devoted to helping clients avoid paying their debts. Courts in Brazil also tend to recognize and enforce judgements made in global jurisdictions. The ability to freeze accounts without going to banks directly, for example, is one way Brazil succeeds in defeating reticent debtors.
Commercial Fundraising

London Startup Legal Utopia Begins Crowdfunding for GBP 200K

Legal Utopia, a London LawTech startup, recently launched a Seedrs crowdfunding campaign. It is hoping to raise GBP 200,000 in capital to further its mission to disrupt the legal industry. B Daily News reports that Legal Utopia uses AI to empower small businesses and consumers, and will use the funds to branch out into litigation funding, collective actions, and to grow its workforce. The startup uses analysis of over 100,000 cases to find the best legal services matches for clients. Legal Utopia received its first grant in 2018, and has since developed cutting-edge AI in collaboration with respected global law firms.
Commercial

What’s Ahead for 2022 in Islamic Litigation Finance?

Last year was uneventful as far as UK disputes in the Islamic Finance sector. COVID has impacted funders and borrowers, as businesses and potential plaintiffs all seek to lower risk and preserve funds. Islamic Finance News suggests that 2022 will be a busy year. The use of third-party legal funding is on the rise, and ESG issues are capturing the attention of funders and investors. Meanwhile, as national moratoriums on insolvency expire, an increase in defaults and insolvencies is expected soon. Perhaps the most notable judgement of last year came down from Justice Zacaroli in the Golden Belt case. In it, Golden Belt claims that the Saad Group defaulted on a $650 million loan, bringing about questions as to how the case addresses Shariah principles—and how this might relate to the larger Islamic finance sector. The judgement focused on contractual interpretation and whether Golden Belt was legally able to enter settlement negotiations or restructuring in Saudi Arabia without a go-ahead from certificate holders. This question, which was answered with a resounding Yes, took precedence over Shariah principles. Other factors sure to make 2022 even busier include:
  • Increased use of litigation funding, both globally and in the Islamic finance sector in particular. Funding is largely regarded as being Shariah compliant.
  • A growing trend toward class action cases thanks to the proliferation of litigation funding. All sectors will likely be impacted by this, including Islamic finance.
  • ESG investing will continue to grow, spurring more litigation on issues relating to environmental protections, social justice and civil rights, and government-related litigation and activism.
Commercial Legal Innovation

 Blockchain Technology: Emerging Legal Use Cases 

Multiple use cases are emerging for the integration of blockchain technology into modern global law practices. Traditionally, many legal enterprises start out as small to medium businesses which have been risk averse when it comes to new technologies.  The Spanish publication ObservatorioBlockchain.com reports that while the infancy of blockchain technology is obvious, the benefits for the legal community and litigation finance are real. The programmatic facilities of blockchain technology allow for litigation finance contracts to be more or less automated.   Document manipulation in litigation finance agreements is somewhat of an unspoken problem today. Blockchain technology could help small law practice businesses evolve into proper global enterprises, complete with enterprise document management systems. Smart legal documents are the forefront of law, many argue.  Check out Observatorio’s full outline of blockchain technology and law. Use your browser's translation tool to toggle between Spanish/English, or your preferred language.
Commercial Deals

Bloomberg Reports on Patent Litigation Financing  

Patent litigation growth is expected to increase, with innovation gracing the sector. In terms of a risk/reward profile, IP litigation is one of the most profitable areas of litigation finance.  Bloomberg Law reports an expected uptick in investment across patent litigation claims. Bloomberg notes that 2020 patent law funding saw a 19% increase. 2021 saw a 24% increase in patent litigation funding.   Investment firms have started to hire in-house patent experts to weed out and invest in best-in-class cases. One such case in 2021 was LSVI vs. Intel, scoring the second largest patent verdict in history at $2.19B.  Bloomberg forecasts that 2022 will usher in investment dollars to explore funding patent licensing, as well. Not only will patent litigation grow and evolve, but so too will enforcement of patent licensing claims, according to experts. Bloomberg outlines that the top level patent litigation investment houses are developing bespoke due diligence frameworks to help set the foundation for long-term success. To see all of Bloomberg's findings, click here to access their survey results.
Commercial

Emily O’Neill of Deminor Discusses Litigation Funding and IP Claims

Emily O’Neill is an expert in structuring and financing IP litigation in multiple jurisdictions. O’Neill says that an authentic, personal approach to clients is key. Pointing to a 30-year history and an 80% success rate doesn’t hurt either. I am Media asks O’Neill five questions about her approach and experience in IP and litigation funding. First, she explains her methods for building trust with clients, despite third-party legal funding being a comparatively new industry. When asked about her proudest professional achievement, O’Neill reveals that she was recently appointed to the council of the Law Society. This is an opportunity to improve diversity and social mobility within the finance sector, and the legal one. Questioned about her impressions of patent litigation in the UK, she states that like many legal areas, the UK patent court is in recovery from an unpredictable and difficult couple of years. Delays, increased costs, and longer case durations have caused multi-jurisdictional matters to lag. But O’Neill also points out that new IP specialist judges in the UK High Court are bringing improvements. In discussing Spectris plc’s global IP management system, O’Neill details that making employees aware of their responsibility to safeguard IP is the foundation of a successful system. Implementation was then tailored to the needs of specific subsidiaries that could be used between teams—allowing for collaboration while protecting IP. Finally, O’Neill cautions those embarking on multi-jurisdictional litigation to ensure coordination between the different jurisdictions. Not all teams will coordinate well, but having everyone working together is essential to see a successful case through to completion. 
Consumer

Litigation Finance Arrangements in the United States

Like a lot of things in America, the pursuit of justice can be out of reach for all but the wealthy. To pursue a case in the US, litigants have to cover the costs of lawyer fees, out-of-pocket expenses, and any other associated costs. Depending on their situation, potential claimants may be expected to do this while unable to work, injured, or having recently lost significant financial resources. MONDAQ explains that because of the prohibitively high cost of litigation, well-capitalized wrongdoers can deflect lawsuits with threats of high costs, or with lowball settlement offers. Contingency fee agreements may be helpful for plaintiffs in some situations. But rates can be as high as 50%, and still do not cover filing fees, discovery, and deposition costs. So while CFAs can be helpful for some, it’s not a solution to the widespread, runaway costs of modern litigation. Litigation Finance is a rapidly growing industry for good reason. It allows investors to fund individual cases, or a portfolio of several, in exchange for a stake in any award given or settlement reached. TPF can be utilized for consumer and commercial litigation and can be used at any point in the legal process—including enforcement of an award. Before accepting a case, funders conduct due diligence on the case itself, and those involved in it. Essentially, funders are providing funds in a situation where the case itself is the only collateral. The non-recourse nature of funding means that if the case is not successful, funders can lose their whole investment. 
Commercial Regulatory Issues

Singapore Allows No-Win, No-Fee Arrangements in Arbitrations

As of January 12, conditional fee arrangements—once banned outright in Singapore—are now permitted in some case types. No win, no fee agreements are allowed in international and domestic arbitrations, some mediations, and certain proceedings in the Singapore International Commercial Court. Straits Times details that the proceedings in question are those involving high-end commercial disputes. According to Singapore’s Minister for Law, Edwin Tong, allowing conditional fee arrangements will help domestic lawyers compete with lawyers outside the country who are not bound by rules prohibiting CFAs. He also explained that conditional fee agreements increase access to justice, allowing businesses with meritorious claims to pursue cases despite lacking the available funds with which to do so. Conditional fee arrangements could take the form of ‘no win, no fee’ agreements, or ‘no win, less fee’. Lawyers may also choose to charge an uplift fee on successful claims. Singapore is not the only jurisdiction to abolish prohibitions against CFAs. The United States, Canada, Australia, England, and Wales are among those who now allow CFAs in a variety of forms. According to Tong, the Singapore ministry is examining whether the use of CFAs should be expanded to other case types. He notes that CFAs should not be considered a replacement for traditional fee structures. He also affirms that safeguards, such as written agreements signed by lawyers and clients, will be put in place to protect clients from potential abuse.
Commercial Legal Innovation

Litigation Funding via ILO

Litigation finance has a new tech savvy way of doing business, with the emergence of Initial Litigation Offerings (ILO). So far, there has been only one group to gain notoriety employing an ILO. Weed vs. Hemp crop destruction is the controversial ILO investment subject.  RounTabelGroup.com reports that a $1B+ California based hemp operation was allegedly destroyed by agricultural mercenaries sponsored by the government. The operation has launched an ILO to gain investment dollars to start litigation.  The ceiling to the ILO offering is $5M, and is being brokered in $100.00 increments. This is the world’s first approach to litigation funding via ILO.  SEC regulation requires registration of such funding levels under certain conditions related to crowdfunding. However, the SEC has remained silent on the specifics of ILOs.