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Announcements Commercial

Australia: The Evolution of a Litigation Finance Market

On Tuesday, June 15th, 6pm EST, Litigation Finance Journal is hosting a roundtable discussion on the evolution of Litigation Finance in Australia. Topics will include the increasing threat of industry regulation, the Joint Parliamentary Committee's perspective on litigation funding and class actions, how Australia may serve as a blueprint of sorts for global jurisdictions including the US, UK and EU, and the structural and cultural differences inherent to running a litigation funding firm in Australia.

As followers of the lit fin industry are well aware, Australia is the nation where Litigation Finance was born. The funding industry has come a long way since then... so far, in fact, that there is increased talk of regulation given the massive class actions that are taking place. But will such regulation be fruitful or counterproductive? And what about the many benefits Litigation Finance brings to Australian society, such as increased access to justice and a more robust legal landscape?

Hear from prominent founders and CEOs of major Australian-based litigation funders, including Omni Bridgeway, LCM and CASL, as they discuss the evolution of the Litigation Finance market in Australia, as well as the lessons other jurisdictions such as the US, UK and EU can learn from Australia.

This is a can't miss digital event!

  • When: Tuesday, June 15h, 6pm EST (Wednesday June 16th, 8am Sydney time).
  • What: Panel discussion and Q&A with attendees. Audio-only event.
  • Who: CEOs and Founders from three major Australian litigation funders.  

This 1hr and 15min event will be recorded, and all ticket holders will receive a recording of the event. So if you can't make the time, you can still access the conference!

The event will be moderated by Ed Truant of Slingshot Capital. 

For more information and tickets, please visit this link.

We hope you enjoy! - The LFJ Team

Commercial

LIDW Looks at Litigation Funding and Class Actions

London International Disputes Week 21 includes numerous discussions on dispute resolution. This year’s theme, Looking forward: Change, Challenge, and Opportunity, encapsulates how the legal and financial worlds have had to adapt to a rapidly changing landscape. LIDW2021 details that Tuesday’s sessions included a variety of relevant topics, from collective redress and class actions to litigation funding and the agreements that govern them. The group brought attention to some of the recent innovations the industry has made, including those pertaining to class actions. These include leveraging tech to sort through potential claimants, enabling similar smaller claims to share costs and risks, and opt-out provisions. The group discussed the recent Merricks vs Mastercard case, which led to a landmark judgment for consumers. The discussion featured Boris Bronfentrinker of Quinn Emanuel. This case, Bronfentrinker explained, ignored other classes of consumers—such as intermediate purchasers. While dissecting the issues, Bronfentrinker suggested that courts should develop the common law while innovating and adapting—but in an incremental way. Hausfeld’s Lucy Pert explained why litigation funding is unlikely to result in a glut of frivolous lawsuits. Adverse costs orders will dissuade some, but overall, funders aren’t interested in bankrolling frivolous lawsuits. Insurers are also unlikely to offer coverage for such suits. David Walker of Deminor, in his speech, juxtaposed the altruism of increasing access to justice with the pragmatism of the need to make money for investors. As he explains it, the goal is to use economic know-how to develop funding models that work for funders, lawyers, and clients. The session wrapped with an enthusiastic defense of Damages Based Agreements, and a generally positive tone about the future of Litigation Finance.
Announcements Consumer

Legal-Bay Reports Class Action Filings in Peloton Treadmill Defaults

Legal-Bay, The Pre Settlement Funding Company, reports an update in the lawsuit filings against exercise equipment company, Peloton. Class-action suits have been filed in courts of both the Northern District of California and Eastern District of New York; as a result a recall has been initiated on the Tread+ model treadmill. Peloton's exercise machine is allegedly responsible for accidents involving pets and children. The high-end treadmill company is being accused of fraudulent advertising, as the images in their media and print ads show young children near the machines, indicating the product was safe for use around them. However, according to the lawsuits, pets and children can easily be trapped underneath the treads causing injury, and in one case, even death. Legal-Bay is prepared to assist with the numerous Peloton plaintiffs who may be seeking settlement loans. They are considered one of the best lawsuit loan funding companies in the industry, and offer a lightning-fast approval process. Chris Janish, CEO, commented, "We are deeply concerned with the injuries that the Peloton treadmill can cause.  As a result of the recent recall, Legal-Bay is actively considering cash advances for plaintiffs on select cases at this time." If you're a plaintiff involved in an active Peloton injury lawsuit and need an immediate cash advance against an impending lawsuit settlement, please visit Legal-Bay HERE or call toll-free at 877.571.0405. Legal-Bay remains dedicated to helping clients with their Peloton injury claims. Any new clients that need cash now can apply for loan settlement funding to help get through their financial crises. Legal-Bay funds all types of loans for lawsuits including car accidents, personal injury, medical malpractice, and more. Legal-Bay's settlement loan funding programs are designed to provide immediate cash in advance of a plaintiff's anticipated monetary award. The non-recourse law suit loans—sometimes referred to as loans for lawsuit or loans on settlement—are risk-free, as the money doesn't need to be repaid should the recipient lose their case. Therefore, the lawsuit loans aren't really loans, but rather cash advances. To apply for a loan on lawsuit now, please visit the company's website HERE or call toll-free: 877.571.0405 where agents are standing by.
Commercial

UC Budget Approval Focuses on IP as a Budgetary Source

The University of California Board of Regents passed the 2021-22 budget at its most recent virtual meeting. The budget includes mental health support for students, open access for research, and finding new ways to innovate and support entrepreneurship. How will the university accomplish these goals without raising tuition? Partially through litigation funding. The Daily Californian details that the new budget is nearly $100 million larger than that of the previous year. Updates to cybersecurity are paramount, especially with the ongoing adoption of remote learning. Some say that the recently passed budget will not cover the necessary upgrades for the schools’ cybersecurity needs. Also added to this year’s budget will be vaccine support for unvaccinated students, and updates to the school’s Eligibility in Local Context (ELC) program that fosters socioeconomic and geographic diversity. The board also approved a special committee that will advance entrepreneurship and innovation while reducing obstacles caused by bureaucracy. This will include revising older, outdated policies and focus on the success of undergrads and faculty. UC regents recognize that some communities need more help than others to succeed. To expand available funding without raising tuition, regents are looking into litigation funding in order to monetize existing IP. By using third-party legal funding to support IP lawsuits, the university can pursue litigation with capital from funders—reaping the benefits without taking on risk. Funders get a cut of any award, and UC receives payouts they wouldn’t have pursued without funding. These cases take time, but can provide a much-needed boost to university budgets. If UC decides to go this route and utilize Litigation Finance, it may allow them to pursue all the changes and upgrades in this year’s plan without burdening students with higher tuition. In that way, litigation funding increases access to education, as well as justice.
Commercial

Morgans Agrees to $5.5 Million Settlement Payout

One of the largest wealth management entities in Australia, Morgans, has agreed to settle its lawsuit with clients. The issues allegedly  stemmed from one Brisbane-adjacent branch of the company that repeatedly caused concern for compliance officers. Financial Review explains that even though Morgans has defended itself against accusations of bad advice and poor management, their own internal investigations were spurred by suspicion of problems at the branch. The case has been active for more than two years. Spokespeople for Morgans maintain that the proposal for a settlement payout is not an admission of wrongdoing or liability on their part. David Wilkins once promoted a scheme called “Income Machine,” before his ASIC reprimand. He’s accused of providing misleading information (for example—that options trading carried almost no risk) and inappropriate advice—such as giving investors of limited means strategies more appropriate to high-end investors. Eventually, Wilkins received a five-year ban from ASIC. It is unclear how many claimants will share in the $5.5 million settlement, though Shane Roberts of Holman Webb has been involved with more than 40 claims with clients regarding the Springwood branch. Of those, 37 shared a similar set of facts and circumstances. If the case were to go to trial, claimants would almost certainly need support from a litigation funder, which means this case may be ripe for funding.   In the last 12 months, Morgans has earned more than $10 million in profit, which is down from the previous year. Spokespeople for Morgans maintain that they have a strong defense against the accusations against them.
Commercial

DLA Piper Looks Toward Cryptocurrency and NFTs

It was only a few years ago that most people thought cryptocurrency was a passing fad. Non-fungible tokens (NFTs) are similarly misunderstood among consumers—but that may be about to change. Financial Times details that trailblazers like Scott Thiel are doing their part to bring cryptocurrencies into mainstream consciousness. Now that bitcoin’s value has increased dramatically and NFTs are pulling in hundreds of thousands apiece, all eyes are on the blockchain. Thiel has suggested that it’s possible to issue digital tokens that are connected to real-world objects like property or art. In effect, that takes any physical asset and makes it tradable on blockchain. DLA Piper has taken this concept and run with it, creating Toko—an engine that can create fractions of physical assets and makes them tradable digitally. This is likely to attract a new class of investors—those who are looking for alternative assets unconnected to traditional markets. Toko’s debut project was a commissioned art piece by Wang Xiaobo. It was divided into 16 shares—each representing a square piece of the painting. Each fraction is the same size and price, though some investors were picky about exactly which piece of the painting they owned. Currently, Toko works with NFTs and digital tokens representing physical assets. But the sky is the limit. DLA Piper is now asking clients how they want to use Toko. Speculation abounds on how illiquid assets can utilize Toko to trade or sell parts of assets with digital tokens. At the same time, digital tokens are a new currency fraught with compliance risks and an unsure status around the world. Do individual tokens have the same status as an investment contract? What are the duties to disclose information with regard to NFTs? We don’t know yet because it’s all too new.
Commercial

Estia Class Action Settles for $12.35 Million

Estia Health announced an agreement to settle a class action over disclosure. Shareholders allege that failure to disclose relevant information to ASX led to inflated stock prices. The Weekly Source explains that shareholders would have paid a lower price for shares had proper disclosure occurred. The case was co-funded by Litigation Lending Services and Investor Claim Partners, and led by the firm Phi Finney McDonald. As the total settlement of $38.4 million was approved by Federal Court—Estia will pay $12.35 million. Estia’s insurers will pay the balance of the settlement.
Commercial

UK Panel on Collective Actions & Litigation Funding

London International Disputes Week recently held a discussion regarding the role of litigation funding in collective actions. As the practice of third-party funding grows in popularity and scope, those in power have been seeking to regulate it.

ICLG.com reports that in 2009, Lord Justice Jackson was instrumental in reforming costs associated with legal cases. Determined to decrease costs as a means to increase access to justice, the Jackson reforms (which became law eight years ago) led to specific regulations about legal insurance and litigation funding. Litigation funding aside, it makes sense that controlling court costs would also increase access to justice for average citizens.

Hausfeld partner Lucy Pert explains that there is no comprehensive class action regime in England and Wales, unlike Australia or the US. However, the Competition Appeal Tribunal holds that an opt-out claim could be used to settle a breach of competition law—and that this would not require active participation by members.

Pert went on to assuage concerns that litigation funding leads to nuisance lawsuits. She explained the many factors that would keep funders from bankrolling frivolous cases—with adverse costs being chief among them.

Senior legal counsel at Deminor, David Walker, noted that in the eyes of funders, cases are economic investments. If the numbers don’t work, funders aren’t interested. A common formula for funders is that the expected payout must be greater than 10 times the funding amount. Funders also consider the book-building process, the legal team and strategy, and finally—the defendants themselves and how their feelings might impact the process.

Elena Rey, a partner at Brown Rudnick, stated that the UK has a better-developed framework than the EU, though that market is advancing and adapting quickly. She believes more syndication deals will be forthcoming in the months and years ahead.

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.