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Case Developments

ANZ Bank and Ross Asset Management Reach Settlement Agreement

Investors in Ross Asset Management have recently reached a settlement with ANZ, a joint statement revealed. The case alleged that the bank knew, or should have known, that David Ross was essentially engaged in a Ponzi scheme. RZN reports that all involved parties affirmed that they were misled by Ross, but declined to comment on the matter further. One spokesperson did mention that investors looked pleased while exiting the meeting. The RAM group received funding from a specialist third-party litigation funder, who will likely receive a share of the settlement.
Deals

Binance Traders Acquire Funding for Class Action

One group of Binance traders has asserted that they lost $20 million in cryptocurrency trades earlier this year. Bitcoin prices dropped by as much as 30% last May—following the announcement of a Chinese crackdown on cryptocurrency. Today UK News details that a steering group has recently been launched, poised to bring an action against Binance for losses suffered during a platform outage. The group is backed by Liti Capital, a third-party litigation funder based in Switzerland. According to a statement by Liti, at least 700—but perhaps thousands—of traders were negatively impacted. Together, losses may total more than $100 million. NBC’s Olivia Solon points out that crypto traders are now trying to hold a company to account—despite the fact that the largely unregulated company maintains no headquarters to approach. The case will prove difficult, but Liti Capital is funding the international arbitration to the tune of $5 million. A spokesperson for Binance stated that it is the company’s policy to compensate trader losses caused by platform issues. However, unrealized profits fall under the heading of ‘what ifs’.   The FCA warned consumers that Binance is not legally able to carry out regulated activities. Banks, including Barclays, no longer allow customers to make transactions with Binance.
Commercial

Burford Capital Caseload Delayed by COVID

Leading litigation funder Burford Capital has revealed that nearly 50% of its current cases have experienced delays relating to COVID. Law Gazette details that a recent performance disclosure filed with the London Stock Exchange showed that delays are slowing the progression of cases. Christopher Bogart, Chief Executive at Burford, explains that no clients have ended their relationship with Burford over delays. He also stated that some clients are reticent to settle cases while delays are still happening. Deployments are way up—with AU $399 million deployed group-wide. Despite this, Burford is looking at a net loss of as much as AU $70 million, owing to non-cash accruals. Burford shares are currently at 847p.
Announcements Case Developments Consumer

Legal-Bay Lawsuit Funding Announces Roundup Litigation Settlements Still Have No Definitive Timeframe

Legal-Bay, The Presettlement Funding Company, reports that Bayer is reassessing its efforts to settle the numerous lawsuits they are facing due to their Roundup brand weed killer. It is estimated that 30,000 plaintiffs still have outstanding suits against Monsanto (a subsidiary of Bayer), claiming the company's product is directly responsible for making them sick.  Certain cancers are alleged to have been caused by the glyphosate-based herbicide including non Hodgkin lymphoma. Bayer has agreed to pay compensation on some claims, even while disputing liability on others. However, it has already been ruled that it will take $9 billion to settle over 100,000 existing claims—four claims alone had jury verdicts of $2 billion as well but are in appeals. At this time, Legal-Bay's sources report that they are unaware of any victims who have been paid any actual funds from Monsanto, despite the settlement being reached over a year ago. There are no guarantees that the company will settle these suits, and no exact numbers can be provided for payout amounts at this time. Chris Janish, CEO of Legal-Bay, commented, "We continue to assist and fund victims of Roundup despite no timeline as to when settlements will be ruled upon or when payouts will actually occur.  It is clear that Covid has slowed the payment process, but at this point the defendant seems to be dragging their feet unnecessarily." If you are involved in a Roundup weed killer lawsuit and need an immediate cash advance against your pending settlement, you can apply HERE or call: 877.571.0405 Legal-Bay's pre settlement funding programs are designed to provide immediate cash in advance of a plaintiff's anticipated monetary award. The non-recourse law suit loans—sometimes referred to as loans for lawsuit or loans on settlement—are risk-free, as the money doesn't need to be repaid should the recipient lose their case. Therefore, the lawsuit loan isn't really a loan, but rather a cash advance. To apply right now, please visit the company's website HERE or call toll-free at: 877.571.0405 where agents are standing by.
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Announcements Commercial Legal Innovation

Liti Capital’s Wrapped LITI (wLITI) Lists on Bitcoin.com Exchange

Liti Capital’s wLITI token, a wrapped version of the Swiss company’s LITI equity token, has been listed on the Bitcoin.com Exchange on 24 August at 10:00AM UTC. wLITI is trading with BTC and USDT pairs. Liti Capital, a Swiss-based blockchain private equity fund specializing in raising capital for legal cases, is making waves in traditional investing by bringing litigation financing to the masses, an investment practice traditionally monopolized by hedge fund heavyweights and elite investors. Just last week, 19 August 2021, Liti Capital announced that it was funding a claim (www.binanceclaim.com) against Binance, which would enable affected individuals to pursue claims, including, if necessary, in arbitration, for compensation in relation to the exchange failing on 19 May 2021. This failure resulted in the trading accounts (including Futures, Margin, and Leveraged Token products) of at least 700 and potentially thousands of individuals being effectively untradeable for hours, causing traders to suffer losses that could exceed one hundred million dollars. Litigation financing is the practice of bringing in investors to cover the cost of a lawsuit or arbitration in exchange for a portion of the profit. Litigation financing specialists, such as Liti Capital, purchase litigation assets for cases they deem to have a high chance of winning. While litigation financing often requires an initial investment of $500,000 to $1 million from an investor, Liti Capital makes it accessible for anyone with as little as $50. It does this by tokenizing shares in Liti Capital and paying out dividends to Liti Capital (LITI) equity token holders when a case in Liti Capital’s portfolio is won. Liti Capital has already secured a healthy case portfolio with its largest case potentially worth more than $1 billion when it finally settles. Cases like these, which tend to be commercial rather than consumer or personal lawsuits, usually target large-scale corporate disputes valued at more than $10 million. While they could take years before a settlement is reached, successful litigation funders can expect to pocket between three and five times their initial investments, according to estimates by litigation finance expert Steven Friel. What is wLITI? wLITI is an ERC-20 token that is the wrapped version of the LITI equity token. Launched on June 29, 2021, the wLITI token is suitable for trading on exchanges such as Bitcoin.com, whereas the LITI token is only available through liticapital.com after meeting KYC requirements. Liti Capital uses the blockchain to manage its share registry. Development of its own blockchain-based case management tools is on its roadmap. Switzerland-based Liti Capital creates wLITI at a LITI token buyer’s request via Liti Capital’s app or website, which converts the LITI to wLITI at a 1:5000 ratio. The tokens will always maintain this ratio. The buyer is then able to trade their wLITI freely. Liti Capital does not directly sell wLITI. LITI is a true digital share of Liti Capital that has voting rights, pays dividends and is protected under Swiss law. LITI is purposely not designed to be on exchanges at this time. Both tokens represent Liti Capital, whose mantra is “private equity for all.” Liti Capital works exclusively in a single form of private equity – Litigation Finance, also called third party funding. This asset class has remained almost entirely exclusive to hedge funds and venture capitalists since its inception several decades ago. Litigation Finance is the practice of financing all or part of a legal case on behalf of a plaintiff for an agreed upon percentage of the court award. Once Liti Capital purchases a portion of ownership of a case, it provides capital that can be used in many ways: legal fees, case management and strategy, expert witnesses, intelligence work and whatever else is needed to give the plaintiff the best chance of winning the case and collecting the award. The portion owned by Liti Capital becomes a “litigation asset” that backs the LITI token. A Strong Endorsement Danish Chaudhry, CEO of Bitcoin.com Exchange, shared his views on wLiti’s listing, saying,“The Liti Capital team are providing an equity token which is the first of its kind, focused around easy-to-access private equity investment opportunities for basically anyone with the help of blockchain technology.” Chaudhry continues on by saying: “We’re very excited to see how Liti Capital will continue to empower their vision, and gain further outreach with our outstanding community at the exchange.” Jonas Rey, CEO of Liti Capital, said, “Listing on Bitcoin.com Exchange is an excellent opportunity for us, and a milestone we are proud of. We have full confidence that once the public discovers just how valuable the litigation assets we are able to purchase on behalf of LITI investors are and how powerful blockchain-backed private equity trading can be, that wLITI will become a very popular token indeed.” Listing details Trading Opening: Aug. 24, 2021, 10:00AM UTC Deposit Opening: Aug 24, 2021, 09:00AM UTC Trading Pairs: wLITI/BTC wLITI/USDT About Bitcoin.com Exchange The mission of Bitcoin.com Exchange is to empower people from all over the world to trade cryptocurrencies with ease and confidence, from first-time traders to advanced trading professionals. With high liquidity, 24/7 multilingual support and dozens of trading pairs, complemented with a high level of security, we offer an attractive platform for trading any cryptocurrency. Within one year since launch, on average, the exchange has been visited by more than 500K active traders per month, and this number continues to grow by the minute. About Liti Capital Switzerland-based Liti Capital is a Swiss limited liability company specializing in litigation finance and fintech. Liti Capital buys litigation assets to fund lawsuits and provides a complete strategic solution along with connections to top law firms to help clients win their cases. Tokenized shares of the company lower the barrier of entry for retail investors and give token holders a vote in the company’s decision-making process. Dividends are distributed to LITI token holders upon the success of the plaintiff. Jonas Rey, co-founder of Liti Capital, also heads Athena Intelligence, one of the most successful intelligence agencies in Switzerland. His two co-founders, Andy Christen and Jaime Delgado, bring operational, innovation and technical skills to round out the leadership team. Liti Capital recently onboarded seasoned industry leader David Kay as chief information officer and executive chairman. Boasting more than a decade of experience as funding partner and portfolio manager of a billion-dollar private equity fund in the litigation financing space, Kay successfully enforced what was at the time the largest international arbitration award in history, bringing in over $1 billion in cash and securities.
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Regulatory Issues

Insolvency Funding in Hong Kong and Singapore—Key Developments

In Asia, legal funding has been used in insolvency cases for over ten years. Since Hong Kong and Singapore adopted a funding framework for third-party arbitration, appreciation for funding has grown.

Burford Capital explains that in Singapore, amendments have been made to the existing Civil Law Act. In Hong Kong, the Arbitration and Mediation Legislation Ordinance came into law in early 2019. The introduction of an arbitration framework in both jurisdictions inspired greater interest in developing a more inclusive litigation funding industry across Asia.

Laws regarding legal finance and insolvency cases are constantly evolving, necessitating practitioners to keep their proverbial ears to the ground. As creditors grow more willing to pursue misconduct, fraud, or other claims against company directors—market momentum grows.

Several significant cases have shaped the development of legal finance in Singapore. In Re Vanguard Energy (2015), the court held that a liquidator may sell a company’s own fruits of a cause of action. The judge then affirmed that legal funding can be a vital facet of adjudicating insolvency cases. Two years later, an amendment to the Civil Law Act abolished maintenance and champerty laws. Finally, the IRDA became law in July of last year—which rolled existing insolvency laws into one piece of legislation.

Maintenance and champerty laws are still on the books in Hong Kong. But there have been small steps taken to expand the use of legal finance in insolvency matters. Unlike other jurisdictions, however, there is no wider framework welcoming the expanded use of legal funding.

Currently, Hong Kong courts require approval for the use of funding on an individual basis. In most cases, this part of the process is included in the funding agreement. However, in Re: Patrick Cowley, it was determined that liquidators didn’t need court approval before making an agreement with a funder.

Hong Kong is also overhauling its insolvency law regime in an effort to clarify and expand the use of legal funding in insolvency and restructuring matters.

Regulatory Issues

Litigation Funding and Work Product / Common Interest Doctrines

It’s well known that information loses its attorney-client privilege when shared with a third party. Increasingly, however, rulings are allowing for documents and exchanges shared with third-party legal funders to be protected. Rimon Law explains that confidentiality can be maintained with legal funders under either the common interest doctrine or the work product doctrine. The work product doctrine exception would include information assembled as part of trial prep, or for another party such as a consultant or insurer. Recent rulings have expanded this to include strategy and mental impressions from involved parties. This can logically be applied to litigation funders, as they vet cases on the basis of potential for success, merit, and the defendant’s ability to pay. In Miller UK Ltd v Caterpillar Inc, the court ruled that confidential documents are shared with potential funders, and it would be counter to the interests of justice for clients to lose their right to privilege simply to acquire funding. The common interest doctrine is not applied across the board—and some courts have ruled pointedly against it. But more and more courts are recognizing that information shared with litigation funders is protected, because the third party in question has a common interest with the client. In In Re Intern. Oil Trading Company LLC, a case in US Bankruptcy Court in the Southern District of Florida, the court ruled that sharing information with funders is ‘an essential element to the exception to the general rule’. Ergo, the funder’s involvement in the case depends on an assessment of that case—and sharing that information should not end attorney-client privilege.
Case Developments

Funder and Firm Win Fees from Terminated Client Relationship

His Honor Judge Cadwallader ruled that a couple suing their former solicitors should be held liable for costs. The Liverpool judge also affirmed that Vanessa and Michael Kennedy breached their agreement with law firm Bermans and the funder, Escalate Law, when they misled their lawyers. Legal Futures UK details that the firm and funders were entitled to end their retainers with the couple, as well as the costs of GBP 75,000. Cadwallader also found that the Kennedys instructed their legal team to make inappropriate or unreasonable agreements and amendments to previous agreements. This included instructing lawyers to deliberately mislead the Leicester Diocesan Board of Finance. Escalate Law is registered in Liverpool as an alternative business structure. The case Escalate Law Ltd & Anor v Kennedy & Anor began when the Kennedys hired Bermans and Escalate to sue Peter W Marsh & Co over guidance provided during a land deal. After a failed mediation and renegotiations, the couple was given permission to build a house on the land—provided construction began within three years. It didn’t. After the deadline passed, the firm and funders terminated their working relationship with the Kennedys, claiming the payments owed according to the agreement. Ultimately the Kennedys were found to be acting in bad faith, and that their actions ‘lacked commercial probity.’ HHJ Cadwallader went on to reject the Kennedys claim that the lawyers’ and funder's work was without value. He further rejected the Kennedys’ claim that his lawyer should have advised him to accept a settlement offer.
Case Developments

What is ‘Super Priority’ Financing?

The High Court of Singapore took a dramatic step recently in granting ‘super priority’ status in a corporate restructuring. This is the first time any third-party legal funder has been given such an order since Singapore’s IRDA became law in 2018 Omni Bridgeway details that the complex and expensive nature of arbitration makes it a very high-risk investment. The order essentially guarantees that Omni Bridgeway will be first in line to receive payments from a successful recovery. This ruling represents an opportunity for businesses that would prefer to restructure a struggling company rather than liquidate it. Only the respondent objected to Omni Bridgeway’s application for ‘super-priority.’ This begs the question: should a creditor be allowed to participate in the process of securing funding—leading to a disclosure they might not normally be granted? It will be fascinating to see how this precedent impacts future arbitration.