Trending Now

All Articles

3220 Articles
Consumer

California Lawyer Joseph Hoats Avoids Prison Time After Perjury

Joseph Hoats, a California attorney, has been stripped of his ability to practice law following a guilty plea for perjury. He will, however, avoid prison time after lying to a judge about his knowledge of a lawsuit filed in his name. Prosecutors sought a 15-21 month sentence for the crime. ABA Journal explains that Hoats’ wrongdoing comes as part of a fictitious settlement with auto giant General Motors. Two of Hoats’ clients, Christopher and Susan Hammatt, solicited litigation funders seeking funds based on a non-existent settlement of over $16 million from GM. The couple received $30,000 of $75,000 promised in a signed funding agreement in 2016. Lawyers for Hoats characterized his illegal actions as ‘an aberration,’ and lauded his long career in law. They pointed out that Hoats spent his time in law improving the legal response to the intellectually disabled, and by taking on pro bono work. Hoats himself stated that his actions were ‘foolish’ and a sad ending to a long career. Justice Paul Gardephe of the Southern District of New York determined that leniency was appropriate, because Hoats did not directly profit from the crime.  These events might lead one to wonder if laws are needed to protect third-party funders from those who would seek funding based on lies.
Commercial

Tech Giant Apple Embroiled in Class Action Asserting App Store Overcharges

Apple has been accused of flouting UK competition laws by overcharging UK customers for products from its app store. The London case, filed in the Competition Appeal Tribunal today, involves about 20 million customers in the UK. Global Legal Post explains that third-party litigation funder Vannin Capital is backing the case. The legal team includes barristers from Brick Court and Monckton Chambers, and is led by specialist firm Hausfeld. Hausfeld partner Lesley Hannah notes that Apple has a captive market that they’ve exploited for years. The legal team claims that the fees Apple charges are excessive and do not reflect the costs associated with providing services. Apple has called the claim “meritless.” A spokesperson claimed that 84% of available apps are free—conveniently omitting that they are in fact ‘freemium’ games that offer extensive in-app purchases with fees passed down to consumers. Another Hausfeld partner, Antony Maton, speculated that last year’s class action against Mastercard—which also dealt with overcharging--has opened the door for collective cases in the UK.
Commercial

Shattercane Decision Appealed

Claimants have launched an appeal in the Shattercane class action. The Queensland Supreme Court decision came down last month in the case, which involved contamination by shattercane weeds in seeds sold to produce sorghum. Queensland Country Life details that in April of this year, the court ruled in favor of Advanta Seeds on the question of accountability. One key question in the case was whether Advanta’s duty of care was negated by a disclaimer. Should a disclaimer alleviate responsibility for selling contaminated products? Lawyer Dan Creevey says no. Creevey said this would prove to be a key point in the appeal. He is adamant that a disclaimer should not allow the company to avoid repercussions for the contamination—which impacted farmers financially for years after the initial planting. Another point may revolve around the cause of contamination. The class action is funded by Balance Legal Capital. Barry Croker of Advanta stated that the company will be defending the appeal—but would not make further comments about the case, as the appeal is in progress.
Commercial

India Confronts Litigation Finance

Members of the IALF Working Group met to discuss seven agenda items including filling leadership positions within the organization. Seven members attended via video, and six via Email. Indian Association for Litigation Finance details their minutes including a reading of the charter. Alain Grec expounded on his feeling that self-regulation may not be the best path for Litigation Finance. He asserted that core issues facing the industry should be deferred to a non-participating entity. Most attendees agreed that there are benefits to external regulation—credibility of the industry being a vital concern. Caveats were discussed as well. Overregulation was an ongoing concern for many members, as was unnecessary bureaucracy that could hinder efficiency to the detriment of clients and cases. Matters impacting collective action cases were discussed here as well. Agenda item #2 concerned capitalizing on the momentum COVID has given the industry, and how that can be used for growth. Item #3 discussed whether the IALF should be a non-profit company. Most members agreed that it should. Division of responsibilities and leadership within the organization made up agenda item #4, while #5 addressed scheduling for document placement for discussion by members. If litigation funders plan to welcome external regulation, agreeing on regulator qualifications is crucial for success. Litigation Finance is a complex and nuanced industry that requires sophistication and experience in the legal and financial fields. Agenda item #6 involved suggestions for leadership roles and committees. This included a board of advisors, directors, judicial and regulatory liaisons, public relations, education, global affiliations, and handling concerns from members of the community at large. Finally, members celebrated the successful launch of the organization—noting the significant industry interest in joining the organization. This includes law firms, legal services providers, and funders. The IALF is expected to formally accept applications for membership in the near future.
Commercial

Nike Counterfeit Case May Define US Court Reach Against Foreign Banks

Between 2013-2015, sportswear giant Nike won court battles against more than 600 counterfeit shoe sellers based in China. Assets were ordered frozen by a US court. While Nike did win, every counterfeiter defaulted on the judgment. Reuters details that it’s at this point that things become less clear. Nike sold the judgment to a subsidiary of third-party funders Tenor Capital Management back in 2017. The subsidiary subpoenaed various Chinese banks that allegedly held accounts for the counterfeiters—holding them in contempt for refusal to comply with the asset freeze. However, US District Judge McMahon determined that the banks were not in contempt because it was unclear whether the freeze applied to them under New York’s ‘separate entity rule.’ On appeal, lawyers argued that banks were using the separate entity rule to avoid accountability. Attorney Robert Weigel correctly pointed out that there’s no valid policy reason for courts to allow banks to encourage users to break the law or ignore a court order. Weigel also suggested that Chinese banks receive transactions from New York every day—suggesting that they are not, in fact, separate entities—but facets of the same entity working in concert. Meanwhile, lawyers for the banks asserted that routine banking was not the same as active participation in crimes. A three-judge panel will determine whether the banks are in contempt.
Commercial

Australian High Court Rules on Competing Class Actions

Australian courts have had to adapt to the changes brought about by the increased use of litigation funding. The practice is a net gain for the community and clients who gain access to justice they could not otherwise afford. Still, some say that the availability of funding has sparked an untenable number of lawsuits—class actions in particular.

MONDAQ details that a High Court ruling has confirmed how competing collective actions should be handled. While this is an important confirmation, it doesn't differ markedly from the current paradigm. When there are competing class actions, courts can analyze the facts of each case to determine which should progress. Other cases would then be stayed or consolidated as appropriate.

This clarification comes after five class actions from shareholders were filed within five weeks of each other in the AMP claim. In that instance, three actions against the same defendant were stayed and two consolidated. Each case had a different legal team and its own litigation funding in place.

While there isn’t one uniform approach that will work for all competing class action situations, there is a standard approach to address that eventuality:

  • Presume that multiple cases are not needed.
  • Litigation funding should not make or break a case moving forward, but may be a relevant consideration.
  • The first-in-time rule may not apply, but timing can be a factor in determining which case should move forward.
  • Best interests of the group members should be a primary consideration.
  • Courts may consider the likelihood of success.

While legal professionals may disagree on the particulars of the High Court’s decision, adding clarity and some measure of predictability to the process is a good thing.

Will this ruling lead to express statutory power for courts to rule on which and how many collective actions should move forward? Only time will tell.

Commercial

Collective Action Against James Hardie Proceeds

A funded class-action against the group of Australian building companies known as James Hardie is about to begin. Leaks in 376 buildings led to homeowners seeking damages of roughly AUD $220 million. Harbour Litigation Funding provided support for the case early on. Stuff New Zealand details that the issue revolves around a cladding system called “Harditex.” Claimants assert that the cladding is defective, and that James Hardie knew or should reasonably have known about the defects. Instead, they continued selling and installing the product—leaving residents dealing with massive leaks, multiple repairs, and even illnesses after being forced to remain in leaky homes. The claim was originally filed in 2015. The case is expected to involve dozens of witnesses and multiple international experts to prove that the cladding was defective. In all likelihood, the case would not have continued if not for aid from litigation funders.
Commercial

Judge Agrees to Oral Hearing in Possible Revival of BHP Case

BHP is, by market value, the largest mining company in the world. In 2015, the Fundao dam, owned jointly by BHP and Vale (Samarco) collapsed—killing 19 people and contaminating the Doca river, reaching all the way to the Atlantic Ocean over 400 miles away. Reuters reports that the Court of Appeal ruled that the case could not proceed in English courts. The Appeals court agreed with the lower court that the case was, in fact, an abuse of process, as it amounted to a claim of reparations. This led to 200,000 disappointed claimants. Judge Underhill will hear oral arguments that may overturn the Court of Appeal ruling, and perhaps breathe new life back into the $6.95 billion case. Ultimately, the case could be instrumental in establishing whether companies with global reach should be held liable for the actions of their subsidiaries around the world.
Commercial

Battle Over Zhunus Judgement Continues

A $300 million judgment known in legal circles as “The Zhunus Judgement” is still being scrutinized by the parties involved. Harbour Litigation Funding brought several charges against Kazakhstan Kagazy JSC with relation to the judgment. LittletonChambers details that Rupert D’Cruz of Littleton Chambers defended KK JSC against claims made by Harbour. Issues in the case included the execution of multiple versions of the Funding Agreement meant to increase Harbour’s share, an accusation of ‘unjust enrichment,’ and whether the new versions of the agreement were created and executed with proper authority. Justice Moulder, in a 72-page judgment, ruled in favor of KK JSC late last week.