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Announcements Commercial

New Research: CFOs Increasingly Aware Of Commercial Litigation Assets And Poised To Unlock More Value From Legal

Burford Capital, the leading global finance and asset management firm focused on law, today releases new independent research probing how CFOs and senior financial officers influence corporate legal departments, legal spend and their companies' success in recovering value through affirmative recoveries. Christopher Bogart, CEO of Burford Capital, commented: "CFOs bring a commercial mindset to other areas of the business—and the legal function should be no exception, particularly given the amount of working capital potentially at stake, measured not only in the many millions now spent on commercial claims but also the even greater opportunity costs of diverting corporate resources and the untapped opportunity to pursue valuable claims altogether." The research suggests that companies are on the cusp of a paradigm shift in how they approach legal assets, and that financial officers understand their value and have new opportunities to more fully leverage tools to unlock them.  Key findings from the research include: Affirmative recovery and cost management programs are extensive—and ready for growth
  • 73% of financial officers report extremely/very extensive affirmative recovery programs, and 84% report extremely/very extensive legal cost management programs
  • 46% report a need for improvement in these programs
Companies have extensive opportunities to enhance liquidity
  • 75% of companies with over $1 billion in annual revenues reported unenforced judgments worth $20-$100 million in 2020
  • Companies with inadequate affirmative recovery programs are 27% more likely to leave money on the table
Financial officers have new ways to apply the same financial approach to legal as other business areas
  • Just 24% say they apply quantitative financial modeling to make decisions about litigation as they do in other areas of the business
  • 39% say litigation variables don't lend themselves to quantitative analysis—revealing an untapped opportunity to utilize tools and partners to quantify legal risk
Bringing a commercial mindset to legal will reinforce more commercial behaviors—benefiting the business
  • 59% believe that pending litigations are assets because they represent future cash flow, even if they don't show up on the balance sheet, and 56% believe that the legal department should have commercial targets
  • However, a significantly large percentage of financial officers aren't yet bringing a commercial mindset to legal
  • Those who conduct quantitative analysis of litigation are significantly more likely to say that their companies need to place greater priority on their affirmative recovery programs—suggesting the kind of appetite for improved performance and financial innovation that leading companies value
The 2021 Legal Asset Report: A Survey of Finance Professionals can be downloaded on Burford's web site and includes snapshots of energy, food, healthcare and other industries. Its findings are based on the online survey responses from 378 senior financial officers of companies with annual revenues of $50 million or more in the United States, the UK and Australia, conducted in March and April 2021 by Bauman Research and Consulting. Over half of respondents hold CFO titles and all are in roles that include knowledge of their companies' litigation expenditures. About Burford Capital
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. For more information, please visit www.burfordcapital.com.
Announcements Commercial

Legaltech leaders Disputed.io raise further funding

LegalTech company, Disputed.io, has increased investment to over £1.5m from its latest round of investment. The latest funding follows on the back of significant growth for the business after the launch of its first product, CaseFunnel, an automated claims solution 13 months ago. Eighty per cent of the investors followed-on, on the back of the soft-launch of the business’ latest product, FinLegal the first online marketplace for litigation funding.

The latest investors in the business include new investors Perry Blacher a FinTech specialist with 25 years’ experience building and operating online businesses and Alan Falach, the co-founder of Global Legal Group, a London-based global company specialising in the legal market.

Commenting on the investment Alan Falach says, “There are still huge opportunities for the legal sector to use technology and improve the economics of claims and access funding for litigation and ATE insurance. Disputed.io is at the forefront of this evolution and I’m excited to be involved in the venture.”

Founder and Chief Executive Officer of Disputed.io Steven Shinn, adds: “It is a real testament to the vision and products at Disputed.io that we have secured more investment. Perry brings a wealth of experience in start-ups which is invaluable as a high growth start-up and Alan’s knowledge and network in the legal sector further increases our brand equity in the legal sector.

“We have exciting plans for the business over the coming months as the demand for the platforms have grown. We also have ambitious international growth plans and the latest funding enables us to tackle our bold targets.”

Commercial

Litigation Finance Transparency is On the Rise

The regulations surrounding the practice of third-party legal funding are ever-changing. As the practice becomes more popular as a product and an investment—interest in legislating litigation funding grows. Recently, Roy Strom discussed what we can expect in the coming months.   Bloomberg Law business columnist Roy Strom details his early experiences as a journalist covering Litigation Finance. After learning of the practice from a New York Times piece, Strom found a local startup that was starting its own funding practice. That group eventually became the powerhouse funder, Longford Capital. Strom advised funders to advertise their offerings and let the public know that funding is an option. He found that neither funders nor the legal firms that utilize them wanted to talk openly about their business practices. So while third-party funding is a net gain for society, the shroud of secrecy invites suspicion. Dai Wai Chin Feman, Parabellum Capital’s director of commercial litigation strategies, explains that in jurisdictions that have clear rules regarding funding, funders and legal teams are more comfortable discussing their relationship. A perfect example is the Willkie-Longford pact, in which Longford Capital struck a deal with Willkie, Farr & Gallagher to fund about $50 million in cases.  Laws surrounding disclosure vary from one jurisdiction to another, and no lawyer wants to invite court interference into a funding agreement unnecessarily. Rule changes like New Jersey’s new disclosure requirements might actually be helpful for third-party funding—in that it invites greater transparency into the process, though opinions vary widely. Litigation funding can be beneficial to clients, legal teams, and justice itself. It seems counterproductive to be anything less than transparent. 
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.