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Consumer

NFL Concussion Lawyer Fights Order to Repay Litigation Funder

Craig Mitnick is a New Jersey lawyer who represented hundreds of current and former players in a settlement with the NFL. After taking part in a $1 billion settlement, Mitnick is now fighting an order to repay loans from a litigation funder amounting to more than $2 million. He has asked a federal judge to vacate the award to the finance company Balanced Bridge (formerly Thrivest), which also made settlement advances to former NFL players.

Legal Newsline reports that in his filing, Mitnick alleges that Balanced Bridge and its Fox Rothschild legal team took advantage of him, violating the canons of ethics. Mitnick is a former client of Fox Rothschild, which represented him in a dispute with his co-counsel in the NFL case, Locks Law Firm.

In a statement, Fox Rothschild noted that Mitnick’s arguments had largely been rejected by the arbitrator already. Balanced Bridge is owned by Joseph Genovesi. Thrivest is one of the companies the Consumer Financial Protection Bureau focused on after it provided high-interest loans to concussion victims in the NFL case. A judge ruled that the funding agreements were invalid.

The Third Circuit Court of Appeals eventually reversed that ruling, saying that the judge overstepped when she invalidated all financing contracts. Meanwhile, Chris Seeger of Seeger Weiss was accused of persuading class members to accept high-interest loans from Esquire Bank, where he served as director. Seeger is also known to have accused Mitnick of persuading his clients to partner with Thrivest, despite only two of his 1,000+ clients borrowing from Thrivest.

Mitnick had taken money on multiple occasions from Genovese, and the two discussed financing his firm. Mitnick’s argument is that the contracts with the funders were unenforceable because they were described as non-recourse, while including provisions that were not consistent with non-recourse loans. The arbitrator found that this was true of the first loan, but not the subsequent funds.

Commercial

Financing Affirmative Recovery Programs

Affirmative recovery programs are a growing trend, and with good reason. ARPs involve monetizing existing litigation once believed to be too costly or time consuming to pursue. Burford's 2021 Legal Asset Report has some telling insights on ARPs. This year’s survey includes 378 senior financial officers of companies whose revenue is at least $50 million annually. Burford Capital details that a growing number of companies have vigorous affirmative recovery programs— with 73% calling their ARPs “extensive.” Still, almost half of those say that their current programs don’t meet the needs of the company completely. Companies with revenue over $1 billion annually are among the most likely to claim that their ARPs need improvement. Nearly half of those surveyed stated that their companies left judgements unpursued, due to how much it would cost to enforce. Not surprisingly, companies who said their ARPs were inadequate were 27% less likely to enforce judgements. How does one set up an affirmative recovery program? And won’t doing so add cost and risk to the business? What about duration risk? By working with a litigation funder, companies receive non-recourse funding to pursue cases in exchange for a portion of any awards or settlements. A financed ARP shifts costs and transfers risk in exchange for a portion of a judgement that would have otherwise remained unpursued.
Case Developments Commercial

Court Rules in Case of the REAL Katie/Katy Perry

What happens when two women using similar names both want to sell branded clothing lines in the same country? When that name is Katy or Katie Perry, the result is a trademark infringement suit. Canberra Times details that clothing designer Katie Jane Taylor (DBA Katie Perry) is suing pop star Katheryn Elizabeth Hudson (DBA Katy Perry), arguing that the singer has infringed on her trademark. Both women have clothing lines sold in Australia. Taylor trademarked her name in 2008—the same year Katy Perry’s first single debuted to much acclaim. While Taylor did purchase the single, and describes it positively in an interview, she denies there being any connection between the song and her choice of name. The case will be heard by Justice Brigitte Markovic. The American pop singer is not expected to appear. Taylor’s case is funded by LCM. She describes her case as a “real David and Goliath fight.”
Commercial Regulatory Issues

Non-Attorney Ownership of Law Firms Attracts Litigation Funders

With the elimination of ethics Rule 5.4, the state of Arizona loosened regulations prohibiting non-attorney ownership of law firms. Not unexpectedly, this has attracted interest from several prominent litigation funders. Comparable legislation is expected in multiple states in 2022, with Michigan, North Carolina, Illinois, New York, and California already considering it. Bloomberg Law explains that the first wave of outside investment in law firms is likely to come from heavy hitters in the Litigation Finance space. The experience and insight that large-scale funders can bring to legal firms cannot be underestimated. Burford Capital and Longford Capital Management executives expect law firm partners to be more open to the benefits of non-attorney ownership. While all eyes are on the big firms and funders, mid-size and boutique firms may also look toward ownership offers from litigation funders. Forward-thinking firms will be looking for ways to innovate and improve access to legal services. Sharing risk with a funder over time is mutually beneficial. The so-called “Arizona experiment” began a year ago when Rule 5.4 was abolished, allowing non-lawyers to hold an economic interest in a legal firm or legal service company. With the goal of increasing access to legal services for non-wealthy Arizonans, a dozen legal firms have been approved to join its alternative business structure program since its beginning in January of last year. Globally, non-lawyer ownership of law firms is uncommon—but not unheard of. Burford Capital assumed a minority ownership of PCB Litigation in 2020. If these experiments are successful and more states loosen their rules for non-lawyer ownership, investing in legal firms is likely to become a hot trend. Burford’s recent high-profile successes include the $103 million it will receive for its funding in the Akhmedova divorce enforcement, and the so-called Petersen case, which brought them $236 million as of March.
Case Developments Commercial

Collective Action Likely as UK Customers Overcharged for Car Delivery

This week, a hearing was held to determine whether a collective action against five car carriers based in Japan, Sweden, and Chile. The action will allege that more than 17 million cars were impacted by a price-fixing scheme run by the five firms that ship internationally. The case is being funded by Woodsford Litigation Funding. Fleetpoint reports that the hearing is expected to last three days, and will be live-streamed for public consumption. Mark McLaren, formerly of Which?, hopes to recoup losses affecting millions of consumers and businesses who purchased or leased cars. If the collective proceeding order is successful, all those who bought or leased an affected car will be automatically eligible for compensation. Cars impacted include Ford, BMW, Mercedes-Benz, Toyota, Vauxhall, Volkswagen, Nissan, Citroen, and Renault. The impacted time frame is October 2006 – September 2015. The facts of the case were settled in 2018 when the European Commission ruled that the shipping companies in question did violate EU competition law. The commission found that the companies coordinated rates and capacity reductions in the market. They also shared confidential or sensitive information to maintain artificially high pricing. The shippers saw fines of over EU395 million. Outside the EU, the shippers saw additional fines of over $755 million due to investigations in Australia, Japan, Mexico, China, South Africa, the United States, Chile, Brazil, and Korea. McLaren explains that consumers couldn’t realistically claim their losses individually, yet most people agree that compensation is due when people are harmed by intentional unlawful behavior. Eligible participants pay no fee to become claimants, thanks to support from Woodsford Litigation Funding.
Announcements Commercial People Moves

Burford Capital’s industry-leading legal finance team continues to grow

Burford Capital, the leading global finance and asset management firm focused on law, today announces it is further enhancing its industry-leading team and legal finance offerings to clients. In addition to new hires in New York, Washington and Chicago, Senior Vice President Dr. Jörn Eschment has relocated to Switzerland to oversee the growth of Burford’s substantial business in the DACH region of Germany, Austria and Switzerland.

Christopher Bogart, CEO of Burford Capital, said: “As the industry leader with a $4.8 billion portfolio, we continue to build Burford’s team to meet the needs of our clients and the continuing growth of our business.

“At Burford, we place significant emphasis on a collaborative culture, with strong intellectual and interpersonal dynamics at the heart of our organization. As we add experts to our team, we look for intelligent, thoughtful and creative individuals who always try to expand upon what is possible—which we believe we have found with each of these new additions.

“We are pleased to announce these new hires and Jörn’s move to the DACH region, which continue to amplify our position as the gold standard in commercial legal finance.”

The composition of Burford’s global team of over 140 employees – 66 of whom are lawyers – reflects its category leadership as well as its commitment to diversity, equity and inclusion, as half of Burford’s team are women, racial minorities or self-identify as LGBTQ.

Further growth of Burford’s industry-leading investment team

  • Apoorva Patel has joined Burford in Washington, DC, as a Vice President with a focus on assessing legal risk in international arbitration, a topic about which he writes and speaks regularly as a leader in several global and national lawyers’ organizations focused on international dispute resolution. Prior to joining Burford, he was most recently Counsel in WilmerHale’s international arbitration and international litigation practices. Mr. Patel graduated from Harvard Law School, where he served as editor-in-chief of the Harvard Negotiation Law Review. He earned his bachelor’s degree in public policy from Duke University, where he graduated magna cum laude. 
  • Gabriela Bersuder has joined Burford in New York as a Vice President. She previously practiced as a litigator at Patterson Belknap Webb & Tyler, where she represented Fortune 500 companies, food and beverage manufacturers and large corporations in complex commercial litigations, arbitrations and mediations. She clerked for the Honorable John G. Koeltl (Southern District of New York) and Honorable Christopher F. Droney (Second Circuit). Ms. Bersuder earned her law degree from Duke University School of Law and her bachelor’s degree in political science from Columbia University.
  • Peter McLaughlin has joined Burford in Chicago as a Vice President. Prior to Burford, he was a litigator at Sidley Austin, where he specialized in conducting investigations related to securities and healthcare regulation and served as counsel for jury trials, bankruptcy proceedings and arbitration hearings. He clerked for the Honorable James B. Zagel of the US District Court for the Northern District of Illinois. Prior to earning a law degree from Northwestern University School of Law, he was a trading analyst at Credit Suisse. Mr. McLaughlin is a graduate of Georgetown University.

Dedicated staff to pursue business opportunities in DACH region

  • Dr. Jörn Eschment, Senior Vice President, has relocated to Zug, Switzerland, to oversee the growth of Burford’s substantial business in Germany, Austria and Switzerland. Prior to joining Burford’s investment team in London in 2018, he practiced international commercial arbitration and litigation at Herbert Smith Freehills in Hong Kong and at Schellenberg Wittmer in Zurich. Dr. Eschment read law at the universities of Freiburg, Liverpool, Marburg and Passau, graduating with the German Staatsexamen, an LLM in European law and a doctorate in public international law, all with distinction. He also holds a master’s from the War Studies Department at King’s College London.

Additional talent augments new business origination team 

  • Bill Walker has joined Burford in Washington, DC, as a Director, building on a career spanning consulting, in-house and law firm roles. Most recently he expanded Deloitte’s law-focused business development efforts with key clients at Fortune 500 companies, publicly traded middle-market companies and law firms. Previously he founded Ansun Management Partners, a boutique professional services firm, was a corporate attorney specializing in complex corporate transactions at several large multi-national law firms and was an in-house lawyer at the American Red Cross. Mr. Walker earned his JD from the University of Connecticut School of Law, where he served as articles editor of the Connecticut Journal of International Law, and his bachelor’s in economics from College of the Holy Cross. 

Global organization strengthened with top talent across business functions

  • Chermia S. Hoeffner has joined Burford as Vice President, Human Resources. Prior to joining Burford, she was Head of Human Resources at the National Audubon Society, where she led the human resources team, implemented organization-level job architecture and developed policies, procedures and initiatives crucial to the overall strategy at Audubon. Ms. Hoeffner has also worked in human resources roles at TIAA-CREF, Mercer and Osler, Hoskin & Harcourt LLP. She has over two decades of experience managing a broad range of HR functions at global organizations. Ms. Hoeffner graduated with an MBA in management from Pace University and a bachelor’s in English from SUNY-Albany.
  • David Helfenbein has joined Burford as Vice President, Public Relations. He has over a decade of experience in litigation and legal communication, crisis management, public affairs, government relations and public policy. Prior to joining Burford, he worked as an Associate Director at Finsbury Glover Hering and held senior roles at several public relations firms and branding agencies. He began his career working in the US Senate, followed by the US Department of State. Mr. Helfenbein earned his law degree from the School of Law at Washington University in St. Louis and his bachelor’s degree, magna cum laude, from the University of Pennsylvania.
  • Ilya Podolskiy, CPA, CGMA, CRMA, Cr. FAC, has joined Burford as Vice President, Sarbanes-Oxley (SOX) Compliance. Mr. Podolskiy has over a decade of experience implementing audit and SOX strategies. He was previously a SOX Manager for Sirius Group and for Assured Guaranty. Prior to that, Mr. Podolskiy held roles with internal audit functions including Senior Internal Auditor for American International Group (AIG) and Tokyo Marine North American Services (TMNAS). Mr. Podolskiy earned his bachelor’s in accounting from CUNY Hunter College and his master’s in taxation from Villanova School of Law.
  • Phillip Lu has joined as Head of Burford’s Project Management Office, with responsibility for Burford’s program/project management, business analysis and strategic planning capabilities. He was previously a Director at KPMG, where he evaluated and developed new digital and data strategies, technologies and business models; he also served as a Senior Manager at EY. Mr. Lu began his career as a management consultant and held technology strategy and project management roles at Morgan Stanley and Merrill Lynch. He earned his bachelor’s in economics from New York University.

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.

Announcements Commercial Deals

Law firms eye up the IPO market

A survey of law firm partners commissioned by Harbour on post pandemic strategies revealed that:

  • 31% of those surveyed said their firms are actively considering an IPO in the next 12-18 months
  • 50% said the pandemic had presented new opportunities for their firm
  • 80% felt their senior leadership team should embrace innovation to deliver growth
  • Only 22% of respondents said their firms had ruled out credit facilities with third party funders over the next 12-18 month

30th NOVEMBER 2021: In a recent nationwide survey of over 200 law firm partners, 31% stated that their firm is actively considering a stock market listing in the next 12-18 months with a further 44% saying an IPO was under consideration.

Coupled with this, 78% of law firm partners said their firms were either in active discussions or considering whether to pursue a credit facility indicating that there is greater demand than ever before from partners at UK firms to seek external capital to complement their own equity.

Ambitious plans for growth are the catalyst for this sentiment change, with more than 50% of those surveyed saying the pandemic had presented new growth opportunities to expand existing practice areas or develop new business lines with several firms acquiring talented teams to spearhead growth.

Many law firm partners felt that adopting innovative practices was key to accelerating growth or maintaining market position, with 80% of respondents observing that senior leadership teams should incorporate innovation in the firm’s post pandemic strategies.

Whilst 86% of respondents highlighted some continued downward pressure from clients on costs for certain services, innovation and attracting external investment are expected to counteract this pressure and to meet the growth agenda.

Ellora MacPherson, Chief Investment Officer at Harbour said: “This survey shows a real desire by firms to access external finance to support their growth ambitions.  IPOs are one way of doing this but won’t be the best fit for all firms.

The survey reveals an expanding appetite amongst firms to source credit facilities from established litigation funders.

For more information, please contact harbour@thephagroup.com

About Harbour

Harbour is the largest privately-owned, dedicated litigation and arbitration funder in the world. Since its foundation in 2007, Harbour have become trusted advisors and providers of capital to law firms, corporates and claimants, supporting them in progressing high-value commercial disputes all over the world. So far, the organisation has funded 126 cases, with a total combined claim value of US$19billion, in both common and civil law jurisdictions, and in several arbitral forums.

About the survey

The survey was conducted by Censuswide and commissioned by litigation and arbitration funder Harbour. Through a survey of over 200 partners at law firms with 50 + layers, the survey sought to deduce the key challenges and opportunities law firms are facing, and what their priorities are post-pandemic.

Commercial Legal Innovation

LegalPay: India’s First Homegrown LitFin Company

LegalPay bills itself as India's ‘first homegrown litigation finance company.' The business was founded in 2020 by Kundan Shahi, and strives to expand the reach of legal funding as both an alternative asset class and a means to increase access to justice. Financial Express details that LegalPay focuses on cases nearing completion, or in the latter stages. Most funds are raised through large family offices in India. What’s unique about LegalPay is that it broadens the range of investors that can allocate capital into Litigation Finance. Shahi explains that regardless of net worth, anyone can take part in this alternative asset class. Democratizing access via a proprietary tech platform was instantly popular—as the first SPV launched was oversubscribed, then closed in an uncommonly short amount of time. LegalPay is a data-driven, tech-focused funder with a high bar for those seeking funding. Every case must pass a 15-point vetting system via a unique algorithm which ensures that only the most viable reach the legal team. In the short term, LegalPay hopes to create a banking system within the legal industry similar to what’s happening in the Indian agricultural sector.
Commercial

Who is Litigation Funding Really For?

When litigation funding began in earnest, funded cases tended to be those against deep pocketed corporations and governments. While Litigation Finance is a boon to justice, it’s also a business, with capital concerns. As such, most funded cases were chosen based on their ROI potential. MONDAQ details that the growth of the litigation funding industry is leading to an expansion of the potential client base. In the last three years, assets held by funders have more than doubled. Investors are flocking to legal funding seeking uncorrelated assets that can generate impressive returns. As new players enter the field, funders are casting a wider net. Rather than funding only large class actions, funders are bankrolling medium and even small cases, individual plaintiffs, and portfolios held by a company, university, or corporation. As opportunities to enter funding agreements increase, cases that were once viewed as too expensive to pursue are more likely to move forward. As a result, small businesses in particular stand to benefit from new funding opportunities. With the evolution of the industry in full swing, it's likely the client base will expand even further to encompass a wider range of potential claimants.