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Commercial

Former Client Sues Legal Team for Damages for ‘Gross Overpayment’

Law firm King & Spaulding, along with partners Craig Miles and Reginald Smith, are being sued by former client, Trinh Vinh Binh. The firm is accused of failing to follow client instructions, and of ‘erroneous allocation’ of funds. Claims include breach of fiduciary duty, fraud, and negligence, as Binh seeks fee forfeiture in addition to damages. Law.com details that Binh, a resident of The Netherlands, hired the firm in 2015, and entered a fee agreement with litigation funder Burford Capital. King & Spaulding would represent Binh in arbitration with The Socialist Republic of Vietnam. Burford agreed to provide up to AU $4.678 million. All told, more than AU $3.5 million was available for legal expenses. The legal team assured Binh and Burford Capital that this would be enough to effectively resolve the arbitration. As of May of the following year, Binh’s legal team had been paid nearly $2 million, with slightly less than that remaining in the team's coffers. According to the filing, Miles and Smith allegedly colluded with Burford to seek ways to impose more fees. Burford Capital is not a named defendant and declined to comment on the case.
Commercial

Northern Territory Stolen Wages Class Action Seeks Claimants

Shine Lawyers is seeking claimants for a newly launched class action on behalf of indigenous Australians whose wages were stolen. Wage control legislation led to wages being withheld in the period between the late 1800s and the early 1970s. This may include farmworkers, domestic staffers, laborers, stockmen, and others. Shine details that to join the class action, the following conditions must be met:
  • Impacted parties must be Aboriginal or a Torres Strait Islander.
  • Claimants or their families must have worked in the Northern Territory prior to the law change in 1972.
  • Claimants or their family members were not paid all owed wages.
Thanks to third-party legal funding from Litigation Lending Services, there is no cost for claimants to sign up for the case. Fees and costs will be deducted from any settlement or award. Shine Lawyers estimates that millions in unpaid wages may be owed to claimants. The case seeks to reconcile payments with everyone who was shorted.
Announcements Commercial

Apex Litigation Finance are delighted to announce the appointment of two new Advisors to its team.

The appointment of Jan Buza and Jozef Maruscak provides key support for Apex’s growth strategy, strengthening resources to meet a significant increase in case numbers. Jan Buza led Business Development at Exponea, a data company that raised over £30m and was later acquired by Bloomreach, the leader in Commerce Experience. He then worked on employing AI (artificial intelligence) and predictive analytics in litigation at CourtQuant and was part of Deloitte’s Legal Tech accelerator program. Most recently, he co-founded and heads product development at Trama, a Legal Tech company that is building an AI-powered trademark registration service. Jan says: “It is great to be on board with Apex. I have watched them over the past eighteen months or so as they established themselves as a leading provider of litigation funding solutions. Their innovative use of AI in this field mirrors my own background and I look forward to making a valuable contribution to their capability.” Jozef Maruscak co-founded various Legal Tech projects while studying law at Cambridge University. He then continued as the CEO of CourtQuant, a start-up specialising in predicting key attributes of legal cases using AI and predictive analytics. He is now a partner and Head of Business Development in Sudolabs, a company building software products for Silicon Valley start-ups and Y-Combinator founders. Jozef says: “The legal market is increasingly driven by AI, and I wanted to bring my experience in this area to a company that fully embraces its potential, and that’s definitely true of the senior team at Apex. There is a bright future for AI as a tool to support better decisions by litigation funders and I am confident that Apex is in the best place to disrupt the market.” Commenting on these appointments, Apex CEO Maurice Power expresses confidence in the company’s strengthened resources: “We recently announced that we were looking to expand our team with talented individuals and Jan and Jozef exceed our expectations. “They both have a CV and skillset that fits perfectly with our continuing journey of employing AI in litigation finance to drive up efficiency and performance for our clients and investors. Jan and Jozef will both combine their contribution at Apex with exciting commitments in complementary roles.” About Apex Litigation Funding: Apex Litigation Finance Limited brings together experts from the legal and finance sectors to provide third party litigation funding to litigants (corporates, liquidators, and individuals) who are unable to pursue a claim due to the prohibitive cost of litigation. Although the claim may have merits, uncertainty over the total costs and the potential risk of being ordered to pay the defendant’s cost, should they lose the claim, prohibits access to justice for many claimants. Our process is augmented by artificial intelligence systems to assess risk. As a professional litigation funder, Apex will make available funds to pay legal and other costs associated with a claim in return for an agreed share of any successful return. If there is no recovery, or if the claim is lost, there is nothing to repay. For details, please see www.apexlitigation.com  
Litigation Finance News
Announcements Commercial

Special Digital Event — 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 (LCM, Omni Bridgeway, and CASL).   

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

Austria May Now Allow Pacta de Quo-ta Litis

As more countries allow the use of third-party funding, more courts are tasked with clarifying how the practice should work with existing law. In Austria, questions regarding ‘pacta de quo-ta litis’ arose with regard to Austrian Civil Code section 879, and section 16 of the Austrian Attorney’s Code. Lexology explains that these laws exist to maintain the independence of counsel, and protect clients from potentially unscrupulous legal counsel. Generally speaking, an agreement to share a portion of a recovered debt with the specialist tasked with its recovery is frowned upon in Austria. But this ‘pacta de quo-ta litis’ is not technically illegal. Recently, the Austrian Supreme Court ruled that ‘pacta de quo-ta litis’ does not apply to litigation funders in the following circumstances:
  • Funders do not provide legal advice to counsel or clients.
  • Clients remain in charge of decision-making at all times.
  • Litigation funders follow normally expected business procedures.
  • Client’s free choice of an attorney is implied—but not specifically affirmed in the ruling.
The court further found that so long as these provisions are followed, there is no unfair competitive advantage.
Commercial

Australia Considers Arbitrary Price Cap for Class Actions

It’s no secret that the Australian government is concerned about class actions—especially those with potentially high awards. In recent months, a law requiring third-party litigation funders to hold specific licenses came into effect. Disclosure obligations were formalized and may become permanent. Now there is talk of imposing a 30% cap on how much claimants can be charged by funders in collective actions. Burford Capital explains that it’s very likely that the figures used as the impetus for these changes are being misinterpreted--specifically, data published last month by Professor Vince Morabito regarding Australian class actions. For example, the study shows that 54 class actions were filed in one year, and 69 filed the next. That seems to suggest that class actions are rising in number. Except that many of the filings happened in a rush before new funder regulations were instituted in August—11 cases were funded in the two days leading up to the deadline. The study also did not control for duplicate class action filings, which are common. It’s also been suggested that shareholder class actions are up—but in fact, they’re roughly half of what they had been since 2017. Not only that, but the actual number of funded class actions is down as well. Class actions backed by funders were roughly 75% in 2017; that number has fallen to around 46% this year. With that in mind, why focus on funding and class actions? When using data to dictate public policy, it’s essential that the data is properly interpreted by industry insiders. There’s nothing to support the idea that 30% is the appropriate amount for a funder’s share, nor is there evidence that courts need more power to evaluate and approve or reject funding agreements. Here’s hoping there’s more discussion before an arbitrary, and potentially harmful, regulation is passed.
Commercial

What is Esoteric ABS and Why Does Everyone Love it?

As the world economy inches toward some sense of post-COVID normalcy, asset-backed securities are demonstrating their resilience. Unlike traditional ABS classes like leases, car loans, student loans, or credit card debt, the term ‘esoteric ABS’ can be applied to assets that can be traded for non-recourse funding. CFO Magazine explains that the ABS market can provide low-cost funding on the basis of assets like aircraft, rental car fleets, or say—a catalog of popular music. Litigation Finance is a rapidly growing industry that aids businesses and consumers in a number of ways with the use of this ‘esoteric ABS.’ Oasis Financial, for example, provides funding for injured parties to cover lawyers and medical fees on a non-recourse basis. Its success during the height of the COVID pandemic demonstrates the desire for esoteric ABS in the capital market. Global Jet Capital and Sunnova Energy have also made use of this marketplace. During the first month of COVID-related shutdowns, court stoppages, school and business closings, financial professionals were in panic mode. But esoteric ABS markets in “niche” areas like litigation funding are largely recession-proof. In fact, investors flocked to invest in litigation funding as it is uncorrelated to the market as a whole—bolstering litigation funding to a multibillion dollar industry. It is now possible to use non-recourse legal funding to pursue litigation businesses couldn’t otherwise afford, or to monetize assets that would normally be considered illiquid. The market for esoteric ABS is maturing and expanding with no signs of slowing.
Commercial

Prairie Mining Files Energy Charter Claim Against Polish Government

Since 2018, Prairie Mining has maintained that actions committed by the Polish government deprived the company of the value of its investment in the Jan Karski and Debiensko mines. Mining News details that the mining company’s case is funded by Litigation Capital Management, an Australia-based, UK-listed funder. The case will be heard under the United Nations Commission on International Trade Law Rules. The claim for losses could reach AUD $1.5 billion. The investment made in the two mines costs an estimated AUD $1.3 billion to develop.  
Commercial

Legal Funding in Global Jurisdictions—How are They Different and What’s Next?

The acceptance and mainstreaming of litigation funding are happening at different times and speeds in different parts of the world. Much of Europe has made use of the practice for nearly two decades. Other locales, like Singapore and Hong Kong, have only welcomed legal funding in recent years. Omni Bridgeway explores how a jurisdiction that is new to litigation funding can take its cues from those who have had more time to refine their procedures and requirements. In common law jurisdictions like those in Australia, moving away from antiquated concepts like champerty was an important first step. As the practice of third-party funding grew in popularity and scope, Australia took steps to add legitimacy to the industry. First was a review by Lord Justice Jackson, which served as a precursor to new regulations and legislation surrounding the practice—as well as the formation of the Association of Litigation Funders. In Singapore, emphasis is not on the courts to clarify the roles and duties of funders, but on legislation abolishing champerty while facilitating the funding of cross-jurisdictional and multi-jurisdictional cases. Case law is also used to inform the development of legislation and policy regarding funding—particularly funding of actions other than those expressly permitted. While some countries like Australia are allowing courts greater control over approval of legal funding agreements—Singapore case law establishes that a funding agreement is not an abuse of process and that these agreements will only be found unacceptable under extreme circumstances. Meanwhile, UK governments are still loathe to formally regulate litigation funding. Looking ahead, it’s clear that third-party legal funding will continue to grow and adapt to a changing world. Recognition of pending or possible litigation as an asset is commonplace in the UK. Defense-side financing is also gaining steam. It does appear that courts, funders, lawyers, and investors can all work toward the goal of increased access to justice and financial flexibility.