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Commercial

Manolete Partners’ Profit Takes a Hit

Manolete Partners, a leader in insolvency litigation funding, recently released a financial report. In it, they revealed that shares have lost half their value within the last year. Yahoo Finance reports that Manolete profits have decreased 26% due to higher staffing costs and a reevaluation of case value. As the government’s emergency insolvency stoppage ends in September, it’s likely that insolvency specialist Manolete will see a flood of new cases. At the same time, Manolete’s share of cash from resolved cases increased 113%, owing to a record 135 insolvency cases completed in 2020.
Commercial

Jurisdictional Gambling Debate Gains Attention from Litigation Funders

A recent case involving gambling license jurisdictions and online gaming has gained the interest of Advofin, the oldest litigation funder in Austria. Advofin is seeking EU 40 million to recoup funds lost by more than 2,000 Austrian citizens who gambled online. Gambling News details that many of the implicated operators are well-known names, like PokerStars, Leo Vegas, and 888. When an Austrian resident agrees to the terms of an online gambling site, they essentially enter a legal contract with the operator. This means that operators in Malta targeting Austrian players are breaking local law. Currently, there is one casino, Casinos Austria, that is licensed to operate in the country. Austrian law says only licensed operators in the country may offer casino gambling. Lawyers for Maltese operators said that the claim represents jurisdictional overreach. Article 56 of the Treaty for the Functioning of the EU establishes freedom to, among other things, deliver goods and services across the EU. That would imply that the Malta gambling operators were within the law. This case is one of about 50 currently being funded by Advofin.
Commercial

Abuse Survivor Accuses Dilworth School of Failing to Protect Students

One survivor of sexual abuse in childhood is spearheading a class action against Auckland’s Dilworth School—the wealthiest school in New Zealand. Neil Harding, along with an undisclosed claimant, asserts that the school knew that young boys were being sexually abused by teachers and staff as early as the 1970s. The case is being funded by LPF Group—the leading New Zealand litigation funder. TV NZ 1 News reports that instead of protecting students, the school opted to punish those who complained. Some abusers were moved to other postings, but Dilworth often filed suppression orders in the event that a former employee was convicted of abuse. In addition to the class action against the school, eleven men have been charged with sexual offenses against students. At least 100 former students have reported past sexual abuse by school staffers to police. So far, only one of the abusers has been sentenced. Assistant Principal Ian Wilson was given a sentence of fewer than four years. Harding is adamant that it’s not just the abusers who are at fault. He maintains that the Dilworth School failed these students by perpetuating a cycle of ongoing abuse. Others who have been impacted by Dilworth’s actions can confidentially file their interest. Because the case is being funded by LPF Group, there is no upfront cost to claimants.   Not surprisingly, Dilworth trustees declined to comment.
The LFJ Podcast
Hosted By Ben Phi |
In this episode, we spoke with Ben Phi of Australian class action law firm Phi Finney McDonald. Ben recently penned this LinkedIn post which outlines his comments to the Senate Economics Committee on the proposed regulatory changes to the class action landscape in Australia. Ben joined us on the podcast to further explain his position, including his response to the 'rising D&O insurance' and 'social inflation' arguments being made by Big Insurance, and the negative consequences that could emerge if large class actions are over-regulated. [podcast_episode episode="8148" content="title,player,details"]
Commercial

New Disclosure Requirements for Funders in New Jersey Federal Court

Will a new disclosure requirement in New Jersey federal court ‘create more issues than it solves?’ Some members of the International Litigation Finance Association (ILFA) believe so. On Monday, Chief Judge Freda Wolfson ordered that third parties providing non-recourse legal funding must be disclosed to the court. Reuters explains that the new disclosure requirements will include the funder’s name and address, and especially whether the funder has approval or control over settlement or strategy decisions. Specific aspects of funding agreements may also be sought, but are not required to be disclosed by default. This requirement was the focus of a long skirmish between the ILFA and business-focused entities like the US Chamber of Commerce. Shannon Campagna, executive director of ILFA, expressed disappointment that industry members were not consulted about the impact of the new rule. She went on to say that the rule is contrary to most existing case law, and is likely to complicate—rather than simplify—the issues it’s trying to address. The new rule will lend some certainty to funded cases, as judges often differ on what types of disclosure and how much disclosure should be required.
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.