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Commercial

Manolete Appoints Lord Howard Leigh as New Chairman

Manolete, a leader in insolvency litigation funding, recently announced that Lord Howard Leigh of Hurley has been appointed as Chairman designate and senior independent director. Accountancy Today details that Leigh founded Cavendish Corporate Finance in 1988, where he is still a senior partner. Thirty years later, Cavendish merged with FinnCap to form FinnCap Group plc—now listed on the London AIM market. Leigh expresses delight at the new appointment and states that he’s looking forward to growing the business.
Commercial

Richard Dietz Continues Fight in Pakistan Asset Recovery Case

The ongoing legal action between the Pakistani government and asset recovery firm Broadsheet experienced a new development on June 9. Richard Dietz withdrew an application to have attorney Stuart Newberger give testimony about VR Global’s litigation funding agreement with Broadsheet—the asset recovery firm Dietz funded. Broadsheet was handed a multi-million dollar payment by the government of Pakistan in January, yet Dietz is still seeking compensation. Intelligence Online reports that Broadsheet was hired to recover assets concealed by Nawaz Sharif, the former prime minister, in a 2000 contract with the National Accountability Bureau. In 2017, VR Global provided $6 million in funding to Broadsheet. Once Broadsheet was given nearly $29 million, VR expected at least $21 million in repayment. Yet, representatives for Broadsheet petitioned a DC federal court to sanction VR for this filing—calling it ‘unnecessary.’ The case and its surrounding issues have necessitate the formation of a complicated web of recovery professionals, government agencies, and funders, as well as the Broadsheet Inquiry Commission. Ultimately, the NAB was found to have negotiated an ineffective contract without proper oversight. Dietz’s case against Broadsheet remains ongoing.
Commercial

Interview with Burford Capital’s Connor Murphy

Connor Murphy is currently a Director at Burford Capital. His focus is on new business origination with corporates and firms in the US. Before this, he was General Counsel for Capstone Advisory Group. Burford Capital reveals that many GC’s don’t even realize that legal finance is an option. But they should. since most companies could put funding to good use if they were aware of its capacity to turn legal departments into a profit center. As the impact of COVID grew around the world, it was predicted that the pandemic would bring about a massive spike in bankruptcies. So far, that hasn’t happened. Murphy explains that while some companies are still vulnerable, and inflation seems inevitable—the damage to the world economy is less severe than anticipated. Murphy expounds on litigation funding in Canada, particularly for bankruptcy cases. Canadians may now use litigation funding as a source of liquidity, enabling them to pay creditors while retaining funds to carry on normal business operations. Litigation funding can have a particularly transformative impact on GC’s, as Murphy is well-equipped to comment on. In fact, it can transform a defensive GC’s office into a proactive, commercially-minded hub that generates revenue for the company rather than draining it on legal actions. Education appears to be key in the future of litigation funding. As more GC’s understand the benefits legal funding can provide, the more widespread the impact will be.
Commercial

Megan Mayers Ranks UK Litigation Funders

Litigation funding has taken off in the last decade, largely due to its utility and benefits—but also spurred by the financial unrest caused by COVID. In the ten years since its inception, the Litigation Finance industry has grown, adapted, and flourished as an investment and a product. Legal 500 takes a long look at the UK litigation funding scene and has assembled a list ranking the leaders of the industry. This list does not include insolvency specialists such as Monolete Partners, Innsworth, or others with a more narrow offering. In overall rankings, the top tier funders are Burford Capital, Harbour Litigation Funding, and Therium. In the second tier, according to Mayers, are LCM, Omni Bridgeway, Vannin Capital, and Augusta. Third are Bench Walk Advisors, Balance Legal Capital, and Woodsford. The funding industry began as a way to increase access to justice for those of modest means. Leveling the playing field in ‘David v Goliath’ situations is a net gain for all consumers—especially in terms of holding corporates and even governments accountable. Third-party legal funding has expanded and adapted to meet the need of law firms, clients, investors, IP holders, and even legal services. Along with these developments are regulatory changes, often spurred by those who are wary about legal funding. This is one factor that led to the creation of the Association of Litigation Funders (ALF)—a professional group that advocates, educates, and self-regulates the legal funding industry. Most of the largest funders have joined. But as the playing field widens, newcomers to the industry seem less likely to join, stating that the rules made by ALF are not enforceable or legally binding. Still, it’s entirely possible that the next ten years will be just as transformative to the Litigation Finance industry as the last.
Commercial

Litigation Finance Sees Regulatory Changes in Germany

The Legal-Tech Act has recently been passed in Germany and will take effect in October of this year. Essentially, it allows attorneys more flexibility with regard to contingency agreements. This act is the opening move in a series of planned reforms to Germany’s legal service market. Pinsent Masons details that the intent of the Legal-Tech Act is to address discrepancies in how legal tech companies are regulated, as opposed to how laws are applied to lawyers. Debt collection out of court is typically handled by legal tech companies—and they are treated differently than lawyers even when seeking to accomplish the same goals. This means that debt collectors aren’t subject to the same set of rules as attorneys. The Legal-Tech Act addresses this in several important ways. Contingency fees may now be used in out-of-court collections cases. Lawyers can make agreements to take on the costs for collections. This applies only to our court collections and judicial dunning (a German-specific rule that makes enforcement easier). This differs from the proposed act, which would have allowed litigation funding for all monetary claims under EU 2,000. These changes necessitate new disclosure, so the Legal-Tech Act covers that too. Debt collection companies are required to tell clients about other options, and to explain why collection agencies seek out contingency agreements. Debt collection agencies, in general, will face more scrutiny in Germany under the new law. Registrations will be required, and German authorities will confirm that their stated business model adheres to the new guidelines. The German government is confident that consumer protections will be strengthened by the Legal-Tech Act. Transparency will increase, particularly in collective actions. One litigation expert expressed concern, however, that the German parliament’s decision is reactive and incomplete. As it is only the first in a list of upcoming changes, any shortcomings in the Legal-Tech Act will soon be addressed.
Announcements Commercial

Litigation Capital Management agrees to fund Comet liquidation claim

Dispute financing solutions provider Litigation Capital Management said it had agred to provide litigation funding to Geoffrey Carton-Kelly, a partner of FRP Advisory, additional liquidator of CGL Realisations Ltd, formerly known as Comet, seeking to recover £83 million from Darty. Kelly alleges that a transaction with Darty - a subsidiary of FNAC Darty, a multinational electrical retailer based in France. - that occurred prior to Comet entering into administration had reduced the amounts that would otherwise have been available for Comet's creditors. The litigation finance agreement would cover proceedings issued in the High Court against Darty.
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Announcements Commercial

Longford Capital Teams up with Willkie Farr & Gallagher LLP to Offer Litigation Funding to Willkie’s Clients Involved in Commercial Disputes

Longford Capital Management, LP today announced that it has entered into a $50 million funding agreement with Willkie Farr & Gallagher LLP to provide equity capital to fund attorneys’ fees and litigation costs, and to monetize the value of meritorious legal claims for Willkie’s clients involved in commercial litigation cases handled by lawyers based in Willkie’s Chicago office.

Willkie is an international law firm of approximately 850 attorneys with offices in New York, Washington, Houston, Palo Alto, San Francisco, Chicago, Paris, London, Frankfurt, Brussels, Milan, and Rome.

The agreement provides Willkie’s clients with an alternative method of funding litigation and enables clients to treat meritorious legal claims as corporate assets capable of being monetized.  Longford provides funding for disputes in several areas of law, including antitrust, patent, trade secrets, subrogation, health care reimbursement, and a variety of contract and fraud claims.

In addition, Craig C. Martin, Chairman, Midwest, a member of Willkie’s Executive Committee and a partner in the firm’s Litigation Department, will join Longford’s board of Independent Advisors. For many years, Mr. Martin has known and worked with members of the Longford legal team, including William P. Farrell, Jr., co-founder and managing director, and Justin A. Maleson, director.

Mr. Martin said, “Our new agreement with Longford will provide our clients with an alternative funding model for high-stakes commercial disputes, especially those with outcome determinative trials, for businesses as plaintiff or as defendant.  We have a talented group of trial lawyers with diverse skill sets and believe this is a tremendous opportunity for the firm to offer corporate and private equity clients a new level of service.”

Mr. Farrell said, “We have known Craig Martin and his Chicago-based trial team for many years. They are successful litigators and trial lawyers representing sophisticated clients.  We look forward to assisting Willkie by providing its clients with attractive financial options in connection with commercial disputes.”

About Longford Capital

Longford Capital is a leading private investment company that provides capital to leading law firms, public and private companies, research universities, government agencies, and other entities involved in large-scale, commercial legal disputes.  Longford was one of the first litigation funds in the United States and is among the world’s largest litigation finance companies with more than $1 billion in assets under management.  Typically, Longford funds attorneys’ fees and other costs necessary to pursue meritorious legal claims in return for a share of a favorable settlement or award.  The firm manages a diversified portfolio and considers investments in subject matter areas where it has developed considerable expertise, including business-to-business contract claims, antitrust and trade regulation claims, intellectual property claims (including patent, trademark, copyright, and trade secret), fiduciary duty claims, fraud claims, claims in bankruptcy and liquidation, domestic and international arbitrations, claim monetization, insurance matters, and a variety of others. For more information, please visit www.longfordcapital.com.

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Commercial

Scotland’s New Rules for Personal Injury Claims

A new court rule in Scotland takes effect on June 30th of this year. The rule allows for QOCS, or qualified one-way cost shifting in personal injury cases. Scotsman explains that until this rule goes into effect, losers in a personal injury case pay costs to the winner. With QOCS, the claimant is not required to pay costs for the defendant, even if the case is unsuccessful. The defendant will pay their own legal fees unless the plaintiff has acted inappropriately in the case. Fees will be capped at a percentage of any award. A spike in new cases taking advantage of this rule is anticipated. More law firms representing plaintiffs are expected to move forward with cases they would not have, prior to the rule being enacted. QOCS is part of a larger spate of civil procedure reforms currently taking place in Scotland, as a move to welcome third-party funding, collective actions, and damages-based agreements. Together, these reforms will no doubt level the playing field between large corporates and common citizens—widening access to justice for those who need it most.
Commercial

Litigation Finance—Helping Plaintiffs Against a Bankrupt Defendant

Is a positive verdict enough once a defendant declares bankruptcy? It may not seem like it, but in fact, plaintiffs may find bankruptcy court a more expedient option in some situations. Omni Bridgeway explains that the focus in a bankruptcy court is on speedy, fair resolutions. Mediation is possible, though less common. Working with a litigation funder is a great move for plaintiffs. Experienced funders can devise ways to lower costs, reduce risk, and may even recommend the best attorney for the situation. Omni Bridgeway’s latest podcast covers these issues and more, including:
  • Settlements under Rule 9019
  • The role of funders in maximizing recoveries
  • Why bankruptcy-specific counsel is so important
  • How bankruptcy court may be the best venue
  • Rule 2004 exams to help assess whether a judgment can be collected
  • Pre-bankruptcy litigation counsel