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Commercial Deals

European Funding Predicted To Account for 15% Of Global Market By 2025

While the US and UK are most often in the news for their high profile litigation funding cases, the European continent is seeing an equally impressive rise in the number of funding agreements, and there is plenty of reason to expect this upward momentum to continue. New research and analysis from Deminor, the global litigation funder, suggests that in the next five years, the European market alone could see annual growth of 8.3% and account for 16% of the world’s litigation funding market by 2025. In a feature for The Global Legal Post, Erik Bomans, the CEO of Deminor, speculated that this rise would be driven by a combination of factors including economic instability, a rise in shareholders holding companies to account over ESG targets, and human rights violation claims. Going beyond the growth in funding itself, Mr Bomans argues that this increased volume in the number of cases will likely be accompanied by a more significant proportion of successful claims by litigants, as the breadth of legal advice available is widened. In addition to this booming market share, it is also expected that we may see a broadening of the number of jurisdictions in Europe that will see an increased uptake in third-party funding. Lianne Craig, the managing partner of law firm Hausfeld’s London office, highlights that the firm has seen real interest and engagement from funders towards participating in previously underserved markets such as Italy, Portugal and Spain.
Commercial

Clarion Remains on Top for Litigation Costs Services

UK law firm Clarion is riding high in 2022, after being placed in the top tier of legal cost services by Chambers & Partners for a third year in a row. Having been highlighted for their breadth of knowledge, pragmatic approach and praised by clients for their responsive services; the firm remains a UK leader in the field of costs services and litigation funding. Speaking with Business Up North, Andrew McAulay, the partner at Clarion in charge of this practice area, highlighted the firm’s nationwide approach, and ability to work with London firms, as well as being able to assist on cases with a global scope. Mr McAulay’s team are regularly engaged by parties on either side of cost disputes, and have an experienced bench of professionals with expertise working alongside both small and large business entities, as well as lay clients. Mr McAulay and his colleague, Stephanie Kaye, were also both listed by Chambers & Partners in the top band for individual practitioners for Costs Lawyers, with McAulay having been recognised as such for three years consecutively.
Commercial

Claimant And Enforcement Require Equal Appraisal, Says Top Funder

When evaluating the potential of entering into a funding agreement with a prospective client, funders must weigh a number of factors, when evaluating the merit of a case and what any potential outcome could entail, whether that be financial return or loss. In the latest of a series of analysis, Glyn Rees of Augusta Ventures, has provided two new articles with insights into how funders should evaluate both a claimant’s legitimacy and what enforcement factors could affect the funder’s return on investment. When analysing the potential client’s merit, Mr Rees argues that any prospective funder should first consider whether the claimant has experience in pursuing proceedings, and if so, what their motivations are for this latest claim. Additionally, it is worth assessing the claimant’s financial situation in case there is a risk of insolvency, which could affect proceedings and what their expectations are for any final settlement. On the enforcement side, Mr Rees primarily focuses on the point that no funder should engage in a case where success would come with only symbolic return, rather than financial gain. Moreover, he highlights the need to undertake detailed inspection of the defendant’s resources and consider where the seat of arbitration is, as this may be the biggest factor in determining how enforceable any settlement is.
Case Developments Commercial

Therium Funds High-Profile Claim By Malaysian Royal Heirs

A litigation funding giant has found itself in opposition to the Malaysian government, by funding a lawsuit by the heirs to the Sultanate of Sulu, in a claim valued at $14.92 billion. Whilst high-profile cases are not foreign to the world of litigation finance, it is certainly a unique position for a funder to be involved in a dispute between a country’s royal family and the state’s government. Profiled in an in-depth feature by The Edge Markets, the claim by the heirs of the late Sultan Jamalul Kiram II comes as a result of an arbitration judgement by a French court, which ruled the Malaysian government was required to pay the nearly $15 billion in damages. This was a result of the state failing to make an annual payment agreed to in an 1878 accord over sovereign land rights, which the government ceased paying in 2013 due to armed militants occupying the area. When the government refused to compensate the heirs of the Sultan for those stated damages, bailiffs working on instruction from the plaintiffs seized two companies belonging to the state-run oil corporation Petroliam Nasional Bhd. While the Paris Court of Appeal has issued a temporary halt on the initial arbitration ruling, the heirs’ legal team led by Paul Cohen, of 4-5 Gray’s Inn Square chambers, have stated that the halt is only enforceable in Paris. While this matter is far from resolved, it is clear there is an appetite among high-profile funders to attach themselves to such cases where the opportunity to gain a significant financial return is available.
Commercial Deals

Top Australian Funder Sees Opportunities in a Post-COVID Market

The impact and the effects of the COVID-19 pandemic are still unfolding across the globe, and its disruption of key industries may result in a follow-on surge in class action cases. Whilst most businesses fought to stay profitable or even afloat, the financial support offered by many governments around the world also helped support businesses that had fundamental flaws or failings pre-pandemic. Interviewed by The Australian Financial Review, the executive chairman of CASL, John Walker, predicts an influx in class actions now that businesses will once again come under tight scrutiny of their activities. This prediction comes with the added weight of CASL building a sizable war chest of $155 million to fund such litigation, with Mr Walker highlighting the area of ESG as a potential firestorm of future claims. Mr Walker also linked the expected rise in claims to the potential for even greater levels of third-party funding due to the continuing increase in inflation, and with investors looking for safer bets than equity investments. Despite regulatory tightening on the funding industry by the previous Australian government, he also expects the new administration to make gradual, if not immediate, changes that will widen access and opportunity for claimants seeking external funding.
Commercial Deals

The Stage Is Set For A Boom In Litigation Funding in Scotland

With instability at the highest levels of government in Westminster, and an economic downturn preoccupying the minds of everyone from Canary Wharf to the small business owner on the high street, flexibility in third-party funding legislation is likely to drive a surge in litigation. This is particularly true in Scotland, where previous regional legislation had prevented a wider adoption of litigation financing. But now local as well as national funders are standing by to support a rise in the number of claims being filed. Writing in The Scotsman, Edward Gratwick, a legal director at Addleshaw Goddard, sees the industry moving in one direction: upward. He notes that since Scotland’s Civil Litigation Act came into law in 2020, the types of litigation finance agreements that have been allowed in this jurisdiction have significantly expanded. As a result, potential claimants who were shut out of the system due to a lack of capital, are now able to seek justice with the help of an enthusiastic cadre of funders. Mr Gratwick also highlights that while under previous regulatory structures, these funding agreements mostly revolved around insolvency cases, we should expect to see a variety of commercial cases take advantage of funding opportunities. This is further reinforced by the growth of new startup funders specifically catering to regional UK markets, as well as London-based firms hoping to find new revenue channels outside the capital.
Commercial Legal Innovation

2022 Thought Leaders in Litigation Finance 

Since 1996, Who's Who Legal has been examining the International legal scene to decipher trends in litigation finance innovation development. In a new research report, WWL Thought Leaders: Third Party Funding 2022 explores the latest cutting edge insights into the global litigation investment marketplace.  WhoseWhoLegal.com features Eric Blìnderman (CEO at Therium Capital Management) and James Little (Principal of Drumcliffe) in Q&A sessions on the evolution of litigation investment. Blinderman and Little are considered LF pioneers, well-regarded within the industry. Click here to read more.
The LFJ Podcast
Hosted By Jason Bertoldi |
In this episode, we spoke with Jason Bertoldi, Head of Contingent Risk Solutions for WTW, one of the world’s largest insurance brokers. Jason discussed the marketplace for contingent risk insurance and the various uses cases for contingent risk insurance products, why claimants and funders would want to insure a case that has a high probability of success, how insurance carriers weight the different underwriting factors, and how he sees the contingent risk insurance sector evolving from here. [podcast_episode episode="10179" content="title,player,details"]
Commercial

Omni Bridgeway on Defense Side Financing

The vulnerabilities of being on the defense side of litigation are immense. According to a new Omni Bridgeway research report, there are opportunities for claimants to leverage world class defense side opportunities as part of portfolio strategies.  Jason Levine (Investment Manager and US Legal Counsel at Omni Bridgeway) highlights that settlement is normally the likely outcome of litigation; funders can express returns in a variety of ways. Shifting upfront litigation exposure to the funders is oftentimes a worthwhile investment for claimants looking to diversify their risk exposure.  Similarly, defense side funding opportunities hedge against abusive litigation from opportunistic adversaries. Check out Omni Bridgeway's conversion on defense side litigation here.