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Pre-Settlement Funding Conditions

It’s not unusual for plaintiffs to need extra money before their case is adjudicated. An accident victim, for example, can’t wait years to pay medical bills or replace their car. Pre-settlement funding can help those who find themselves needing an influx of cash as they await the outcome of their lawsuit.

Legal Desire explains the conditions that must be met in order to secure pre-settlement funding, and how repayment works. If your case is successful, you’ll pay a portion of the settlement or award plus attorney fees. If your case is not successful—the non-recourse structure of the funding means you don’t have to repay the funded money.

In order to get pre-settlement funding, you need a meritorious case. The lawsuit must be filed with the court and be in progress. Personal injury claims are the most common case to qualify for pre-settlement funding.

You must also have legal representation in place to get pre-settlement funding. Funders will often work with lawyers when crafting a funding agreement. However, not all case types are eligible for pre-settlement funding. But many, mostly relating to personal injury issues, are. These include:

  • Auto collisions and accidents
  • Pet-related injuries
  • Defective products, including medical equipment
  • Medical malpractice and nursing negligence
  • Slip and falls

Once approved for pre-settlement funding, money can be deployed as quickly as one business day. Anyone interested in pre-settlement funding should discuss it with their attorney before approaching a funder.

Announcements Consumer

Legal-Bay Lawsuit Funding Announces Renewed Focus on Wrongful Termination Cases

Legal-Bay, the Pre-Settlement Funding Company, reports increased funding for victims of wrongful termination. In light of a recent lawsuit brought against popular gaming company Activision Blizzard, Legal-Bay is expanding their underwriting department to handle the increase in applications being filed by women. California Department of Fair Employment and Housing (DFEH) has filed suit against Activision Blizzard, alleging sexual harassment and gender discrimination against female employees. Activision is certainly not the first gaming company to be accused of fostering a "frat boy culture" among its employees; a mostly masculine atmosphere that's been excused considering most products are developed for their main consumer base of male gamers. However, the demographic is no longer solely male. More than 4-in-10 gamers in the United States are female, a stat one would think would be reflected in gaming companies' hiring practices. But in 2020, women comprised only 16% of all executive positions within the industry, a likely contributor to several recent examples of discriminatory behavior against women. Chris Janish, CEO, commented on the situation, "The face of gaming has undergone a massive shift in recent years. Almost half of all gamers are now female, yet it's been an uphill climb for women who want to make a career within the industry. Plaintiffs who have lost their jobs due to gender-related discrimination can reach out now for monetary assistance in order to compensate lost pay, emotional stress, punitive damages, and legal fees." If you're a plaintiff in an ongoing lawsuit and require an immediate cash advance from your anticipated settlement, please visit our website HERE or call 877.571.0405. Legal-Bay's settlement loan programs can offer immediate cash in advance of a plaintiff's anticipated monetary award. The non-recourse lawsuit loans are risk-free, as the money does not need to be repaid should the recipient lose their case. Therefore, the law suit loans aren't really a loan, but rather a cash advance. If you require an immediate cash advance loan settlement from your wrongful termination, whistleblower, or gender discrimination lawsuit, please visit the company's website HERE or call 877.571.0405 where skilled agents are standing by to hear about your case.
Announcements Commercial People Moves

Augusta Ventures brings in SYZ Capital’s Uncorrelated Strategies lead as new Chief Investment Officer following earlier £250m fund raising

Augusta Ventures, a specialist asset manager focussed on the litigation and disputes funding sector, has appointed SYZ Capital’s current Uncorrelated Strategies lead – Gian Kull – as its new Chief Investment Officer. The move follows Augusta’s closure of its third pool of funding in June 2021 which brought the firm’s AuM to £585m.  This enabled the firm to continue to fund an unprecedented pipeline of opportunities in high value litigation and dispute scenarios. Gian Kull, currently based in Switzerland, managed Legal Assets platforms as a part of SYZ Capital’s Uncorrelated Strategies. He began his career at Merrill Lynch and has since focussed on investing in complex special situations and legal assets on behalf of firms including Multiplicity Partners, Brigade Capital and JANA Partners.  Gian will be based in Augusta’s London office and will report to Chief Executive Louis Young and Board Chairman Hitesh Patel. Louis Young, Chief Executive Officer of Augusta Ventures, said: “We are delighted to attract someone with Gian’s experience to Augusta Ventures.  This comes on the back of our new £250m capital raising earlier this year as Augusta builds on its expansion in capital resources to meet the increased demand for legal related finance across all sectors and geographies. We have never seen so many strong opportunities. Gian’s investing background and wide skillset will make him a huge asset to the firm as our Chief Investment Officer.” Gian Kull, upon welcoming his appointment to Augusta Ventures, said: “Augusta has deep expertise in the litigation funding market, and I am excited about working with the talented team at Augusta and its institutional investors to offer creative funding and risk solutions to Claimants seeking access to justice.”
Announcements Commercial Legal Innovation

Burford Capital earmarks $100 million in expansion of award-winning economic incentive to promote diversity in law, now to include racial diversity

Burford Capital, the leading global finance and asset management firm focused on law, today announces the launch of phase two of The Equity Project, its groundbreaking initiative designed to increase diversity in the business of law.

As part of this expansion, Burford is earmarking a further $100 million to The Equity Project and broadening its mission to address both female and racially diverse lawyers who have been historically underrepresented in the business of law, especially in leadership and partnership positions. In earmarking capital through The Equity Project, Burford provides these lawyers an edge as they pursue leadership positions in significant commercial litigations and arbitrations and eases pathways towards origination and client relationship credit. Legal departments committed to diversity can use Equity Project funding to further incentivize their firms to appoint diverse teams to represent them, and law firms and companies alike can use The Equity Project as part of their ongoing ESG efforts.

In a further expansion of its commitment to providing an economic incentive for change, when Equity Project-funded matters resolve and generate their expected returns, Burford will contribute on its client’s behalf a portion of its profits to organizations that promote lawyer development for female and racially diverse lawyers.

Burford first launched The Equity Project in October 2018 with $50 million in legal finance capital earmarked for matters led by women. Having committed well in excess of that amount to Equity Project matters as of December 31, 2020, Burford has now broadened the initiative to include racial diversity and thus address a deficit in representation that is even more acute than the gender gap. Burford has already made a multi-million commitment under the newly expanded Equity Project to a matter led by a female in-house lawyer and a racially diverse outside litigation team for a Fortune 100 company.

In the last few years, many general counsel have publicly called on their law firms to appoint more diverse teams to represent them, including 170 GCs who in 2019 signed an open letter advising law firms that diversity will influence which firms they hire. According to independent research commissioned by Burford in 2020:

  • 52% of GCs say they are entirely unaware of how origination credit is awarded when they hire a law firm
  • 48% of GCs and senior in-house lawyers say their companies have asked a firm to put a woman on a litigation or arbitration team
  • 55% of GCs say knowing about The Equity Project will change how they think about future affirmative litigation

The Equity Project is a global initiative led by Burford’s Aviva Will, co-COO and formerly a senior litigation manager and Assistant General Counsel at Time Warner Inc. and a senior litigator at Cravath, Swaine & Moore.

Ms. Will states: “We review thousands of commercial disputes annually and vanishingly few are led by female and racially diverse lawyers. We at Burford are providing tangible means to change this so that these groups can have easier pathways to generate additional business.

There is no question that diversity is good for business. The question is, how can we promote and incentivize faster change in commercial litigation and arbitration, both of which have been particularly resistant to it? Our goal is not just to work to bridge these gaps but to do so quickly. To achieve this, we must change the economics.”

Christopher Bogart, CEO of Burford, states: “The diversity problem in law desperately needs innovative economic levers to solve the problem and The Equity Project is an example of Burford Capital putting this plan into action. Burford’s work will not only help to increase diversity at law firms but will also augment companies’ and law firms’ existing ESG initiatives. We are eager to continue our work with our law firm and corporate clients to bolster their progress in their own diversity initiatives.”

The earmarked pool of capital will be reserved for commercial litigation and arbitration in which female or racially diverse lawyers are first or second chair; a female or racially diverse lawyer earns origination credit or is the client relationship manager; clients are represented by firms that are owned by women or racially diverse lawyers; or a female or racially diverse lawyer serves as plaintiffs’ lead counsel or chairs the plaintiffs’ steering committee.

Burford has also expanded its cadre of Equity Project Champions, corporate and law firm leaders who will support and spread awareness of the initiative. The expanded list, which is currently in formation, includes the following returning and new* Champions:

  • Alexandra Rose, Partner, Clayton Utz
  • Amy Frey, Partner, King & Spalding
  • Brenda Horrigan, International Arbitrator
  • Caren Ulrich Stacy, Founder & CEO, Diversity Lab
  • Carolyn Lamm, Partner, White & Case
  • *Daniel Winterfeldt MBE QC (Hon), Founder & Chair Interlaw Diversity Forum, Managing Director & General Counsel – EMEA And Asia, Jefferies
  • Faith Gay, Founding Partner, Selendy & Gay
  • Jonathan E. Goldin, Chief Operating Officer and General Counsel, Teneo Capital
  • The Honorable Katherine B. Forrest, Partner, Cravath, Swaine & Moore
  • *Keith J. Harrison, Partner and Co-Chair, Litigation, Crowell & Moring
  • Maria Ginzburg, Partner, Selendy & Gay
  • *Maria Eugenia Ramirez, Partner, Hogan Lovells
  • Megan E. Jones, Partner, Hausfeld
  • Mylan Denerstein, Co-Chair, Public Policy Practice Group, Gibson Dunn & Crutcher
  • Dr. Nadine Herrmann, Managing Partner and Chair, EU and German Competition Law Practice, Quinn Emanuel
  • Nicole D. Galli, Founder, Women Owned Law; Managing Member, ND Galli Law LLC
  • Noradèle Radjai, Partner, Lalive
  • Roberta D. Liebenberg, Senior Partner, Fine, Kaplan & Black
  • *Rufus Caine III, Co-Founder & Partner, DEI Strategic Advisory Firm
  • Sophie Nappert, International Arbitrator; Co-Founder, ArbTech
  • Stephanie l. Carman, Shareholder, GrayRobinson
  • Sue Prevezer QC, International Arbitrator, Mediator and Consultant, Brick Court Chambers
  • Tara Lee, Partner, White & Case
  • *Veta T. Richardson, President & CEO, Association of Corporate Counsel
  • Wendy J. Miles QC, Barrister, Twenty Essex

In addition to committing capital, The Equity Project will continue to organize events and generate thought leadership that draw attention to diversity in law. Since first announced, Burford has organized 16 events, ranging from business development bootcamps for emerging female litigators to panels with leading in-house lawyers. Burford has also partnered with organizations such as the InterLaw Diversity Forum and Equal Representation in Arbitration, and sponsored events devoted to changing outcomes for female and racially diverse lawyers. Burford will continue this work, aimed at bringing together in-house lawyers, law firm leaders, rainmakers and emerging legal industry leaders in furtherance of this cause. Burford will also continue to study outcomes and efficiencies in matters financed through The Equity Project. 

About Burford Capital

Burford Capital is the leading global finance and asset management firm focused on law. Its businesses include litigation finance and risk management, asset recovery and a wide range of legal finance and advisory activities. Burford is publicly traded on the New York Stock Exchange (NYSE: BUR) and the London Stock Exchange (LSE: BUR), and it works with companies and law firms around the world from its principal offices in New York, London, Chicago, Washington, Singapore and Sydney.

For more information, please visit www.burfordcapital.com.

Commercial Regulatory Issues

Multiple Class Action Lawyers Face Allegations of Fraud

Two barristers and two solicitors are under fire for allegedly misappropriating at least $19 million in fees relating to the Banksia class action. Barristers Norman O’Bryan and Michael Symons will be permanently banned from practicing law. Solicitors Anthony Zita and Alex Elliot will be required to show cause for why they too should not be banned from the practice of law. Financial Review reports that the judgement against the men finalizes a lengthy class action into Banksia’s collapse in 2012. Investors lost at least $660 million in the collapse. The case settled in 2018 for $64 million—but the Victorian Court of Appeal declined to allow legal and funder fees of over $18 million, after a claimant challenged what it deemed ‘excessive’ costs. Increasingly, judges are speaking out against funders and legal firms for taking what they claim are inappropriately large cuts of settlements and awards. AG Michaelia Cash applauded the judgement, affirming it as a step toward stopping lawyers from “gouging” class action claimants. While reasonable people can disagree on percentages, the behavior of these lawyers allegedly included gross acts of deception—including intimidating a group member, backdating invoices, and intentionally misleading a costs consultant. Elderly investors, at least 16,000 of them, endured significant financial losses. But does the Banksia judgement, as some suggest, reflect a need for increased regulation? Surely the misdeeds of some don’t impact the honesty of others?  Assistant Minister to the AG, Amanda Stoker, takes a profoundly negative view of funders—accusing them of “gambling” via the legal system. Suggested reforms include a 30% cap on payouts for funders and lawyers, using an opt-in model for class actions, and giving judges the power to accept or reject funding agreements. Not surprisingly, funders and many lawyers responded negatively to these proposed reforms—stating that they aren’t taking the realities of funding into consideration.
Case Developments Commercial

Business Interruption Payouts Still in Question as Appeal Looms

As thousands of small businesses await COVID-related insurance payouts, insurers maintain that their policies were never meant to cover global pandemics. Whether or not claimants get their due will depend on an upcoming appeal. Sydney Morning Herald explains that an upcoming second round in the case will focus on specific policy wording and intent. The outcome here will be an essential part of determining payouts. In eight of nine recent test cases, Justice Jayne Jagot ruled in favor of insurers, affirming key aspects of their arguments. The judgement caused IAG shares to go up 4.2%. However, lawyers on behalf of business owners are set to appeal, which is expected to begin next month. Law firms involved in the case, Gordon Legal, and Berrill & Watson, stated that there are still questions to be answered—such as whether some claimants had a legitimate claim for losses caused by the government’s efforts to contain the virus. A final decision is, one lawyer explained, a long way off. The class actions are expected to resume in February 2022. Omni Bridgeway is funding several class actions against insurers accused of holding back business interruption payouts. Multiple insurers have disputed business interruption claims on a large scale—including IAG, Suncorp, QBE, and Insurance Australia Group.
Commercial Legal Innovation

Delhi Startup LegalPay Offers Opportunity for Claimants and Investors

Bringing a legal case in India is expensive, and can take years from start to finish. This often means the pursuit of justice is out of reach for citizens of average means. Kundan Shahi, who worked in insurance, knew there was a solution. Your Story details that Shahi saw a connection between what insurers did and how legal cases could be funded by third-parties. His initial idea was to set up Advok8—an insurance company dedicated to funding cases. But the legal setup required to start an insurance company was expensive, complicated, and full of regulatory hoops to leap through. In 2019, Shahi set up LegalPay as a legal services company. Cases being considered for funding are vetted by in-house lawyers using a variety of criteria. Cases are run through software that measures and calculates to determine the merits and probability of winning. LegalPay also considers precedence in similar cases, assessing the defendants' ability to pay an award, as well as other factors. Ultimately, LegalPay agrees to fund about 5% of the cases they consider. In addition to litigation funding, LegalPay also offers interim financing for insolvent companies. This practice is welcome by creditors and debtors alike. Investors provide the monies used to fund cases. Shahi estimates that investors can expect an IRR of 25-30%. Because third-party litigation funding is so new to India, regulation of the industry is practically non-existent. The hope is that regulatory oversight is forthcoming. The industry is sure to grow in India.
Case Developments Commercial

Mercedes Faces Lawsuit Over Alleged Emissions Falsification

Three men from Chorley and one from Leyland are suing auto giant Mercedes over its role in “dieselgate.” Dieselgate impacted multiple car manufacturers, accusing them of using defeat devices to illegally skirt emission standards. National consumer rights firm Slater and Gordon are bringing the claim. The Guardian details that the case is expected to expand into a collective action. At present, Slater and Gordon are also joint lead attorneys in a class action against Volkswagen—also related to ‘dieselgate.’ It has been estimated that 600,000 Mercedes cars in the UK could have been impacted. As many as a million people could be eligible to make claims of up to GBP 10,000 each—as the payouts apply to cars bought new or second hand. The case is being funded by third-party litigation funder Asertis. This funding allows all impacted Mercedes buyers to become claimants without any upfront payment. Claimants are understandably outraged that a luxury car company could engage in such alleged deceit. Eric Kos of Chorley, who has owned multiple Mercedes cars, explained that his trust in the company was destroyed when he realized they’d used illegal means to “dupe” customers like him into thinking they were paying for high quality cars.  Defeat devices were found installed in Mercedes cars in June 2018. The German Federal Motor Transport Authority findings necessitated a recall of more than 750,000 vehicles from across Europe. Later, Mercedes was required to recall about 90,000 more cars in England and Wales. Still, Mercedes intends to fight the claims, making a trial inevitable.
Commercial Legal Innovation Special Features

Key Takeaways from LFJ’s Digital Event on The Evolution of Corporate Portfolio Funding

Last week, Litigation Finance Journal held a special digital event on the evolution of corporate portfolio funding. How has portfolio funding evolved over the years? Why have corporates been slow to adopt the practice? How is COVID impacting that adoption rate? And what can funders do to convince corporates that the benefits of portfolio funding outweigh any perceived drawbacks? A panel discussion led by Ed Truant, founder of Slingshot Capital, addressed these and other questions. The panel consisted of Neil Purslow, Co-Founder of Therium Capital Management, Greg McPolin, Managing Director of Burford Capital, Patrick Molony, CEO of Litigation Capital Management, and Rebecca Berrebi, Founder and CEO of Avenue 33, LLC. Below are some key takeaways from the discussion: Ed: Patrick, can you provide a brief description of the corporate portfolio financing market? Patrick: Sure. This is a part of the market where the litigation financier approaches a large sophisticated and potentially well-capitalized corporate entity, either directly or through another channel—and provides to that corporate a facility in relation to a number of disputes that corporate might have. The capital that’s applied to funding that portfolio of disputes is typically collaterally secured against the outcome of a number of disputes. And through that process, it’s provided to that corporate at a reduced price reflecting the reduced risk of capital. And as you say, it is a part of the market that hasn’t seen a lot of attention from litigation finance, and is something I think the industry is starting to have a close look at now. It’s certainly one of the investment strategy that LCM—the company that I manage—is looking at and focusing on very closely. Greg: The two things I’ll add are that Patrick was right in that the market for corporate portfolio financing is certainly a newer evolution of the Litigation Finance market. For Burford it’s really come into focus over the past 18 months or so. For fiscal year 2020, we noted that about 57% of the capital we committed across our portfolio went to corporations. Not that that all happened in the context of portfolios, but certainly corporates were the majority recipients of the capital that Burford committed in 2020. That’s consistent with what I see in the market, certainly here in the US. That is an increased uptake by corporates of litigation finance, and corporate legal departments and finance professionals coming to realize, after people like Rebecca and Patrick and Neil and I have been out in the market explaining that litigation finance is just another form of corporate finance. Corporates should be looking at their legal assets, those affirmative arbitration and litigation claims as having value—as assets that can be monetized and financed. Ed: Rebecca, through your advisory business you must come across corporations all the time who are looking for some perspective on the litigation finance market. Why do you think corporations haven’t adopted litigation finance sooner? Rebecca: It’s a good question. I think it follows along what Greg said which is—first of all, this market in general, litigation finance, remains relatively new as compared to other types of corporate finance in the world. So I think everybody in this industry recognizes that it’s not a new industry, but still becoming more well-known. I think a large part of it is just education, right? I think a large part of it is that corporates are just beginning to recognize that this type of financing is available to them. So there is a big hurdle in terms of education, but as Greg said, Burford for sure is funding a lot of corporates. I think and expect that that trend will probably continue as more and more corporates become more and more comfortable with the idea of Litigation Finance. Ed: Greg, in terms of those corporates who are looking at litigation funding, what are some typical objections you might hear from corporates? Greg: I think Rebecca made this point, which I think is massively important and that is—this is so much about education, and a mind-shift within corporate legal departments and the CFO suite to think about Litigation Finance as just another form of corporate finance. The number one objection is sort of an unseen one, just lack of awareness...status quo. Treating legal assets the way they were treated years and years ago without thinking about how to bring in Litigation Finance to begin to shift the legal department from a cost center to a profit center. Once you get past that...you come up with the typical objections like...some companies believe, wrongly, that commercial litigation funders are behind many of the litigations that they have to defend. So they don’t feel about using capital from a litigation funder on the affirmative side. Rebecca: I think Greg covered the bulk of what I’ve seen—the emphasis being on ‘we don’t like litigation funders because they fund the people who sue us.’ So I do think there’s a bit of a PR campaign that we as an industry should be working on. That this money is legitimate money that is compliant with all types of rules and regulations. We need to bolster the opinion of what Litigation Finance is, and the legitimacy of what it is. We in the industry know that it’s legitimate, and it’s very real and there are a lot of lawyers now who practice specifically in Litigation Finance law. I also see one thing Greg may have alluded to, it’s hard still to learn about Litigation Funding unless you dig deep and listen to panels like this one. It’s not as mainstream as other types of financing are. So while of course we all know there’s a lot about Litigation Finance in the NYT or Wall Street Journal, it’s definitely not front page news consistently. Ed: Neil, can you comment on the role that law firms play in the decision-making process for corporates. Are they absent or behind the scenes or front and center? Neil: They’ll essentially play the same role litigators would in in originating single case fundings, that’s certainly true. But we’ve certainly seen law firms play a very substantial role in some of these deals. But they won’t necessary litigate because it may well be the corporate folks and the key is going to be people with senior contacts in companies that want to deliver a sort of commercial benefit to the company, and go beyond narrow legal advice. Certainly law firms do play roles, and they can play an important role in bridging the gap between the GC and CFO. Ed: In terms of how corporates approach finding the right litigation funder, Rebecca what’s your experience—are they hiring advisors? Or relying on their law firms to run a process? Can you give us some perspective? Rebecca: I will tell you that I think the way that I’ve heard from corporates historically have been through law firms or people reaching out to me because they are interested in taking on Litigation Finance. But just as a corporate wouldn’t make a big investment in something without having some expertise in house or going outside to find it. I find this is the same thing. I’ve been talking to people who find me to learn how the industry works—‘who do I talk to,’ ‘how do I learn about this.’ On a less frequent basis I get calls from corporates that say ‘I’ve been approached by a funder, what do I do? Is this a good deal? What do these deals look like?’ Sometimes it’s a proactive thing, or they get approached.