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Burford Capital hires arbitration expert and legal finance industry veteran Mick Smith for senior European role

Burford Capital, the leading global finance and asset management firm focused on law, today announces that arbitration expert and legal finance industry veteran Mick Smith has joined as Principal in its London office. He will join over 40 colleagues in London, and more than 140 globally. Smith will focus predominantly on the continued expansion of Burford’s business in Europe and especially its industry-leading role in global arbitration matters.

Mick Smith co-founded Calunius Capital in 2006. Prior to this, he practiced law at Freshfields in both London and Madrid and was an investment banker at JPMorgan Chase, Credit Agricole Lazard and Dresdner Kleinwort. Smith earned a degree in Mathematics and Law at Cambridge University, followed by postgraduate study in Law. More recently, he has also completed MSc modules in Data Science and Mathematics.

Christopher Bogart, CEO of Burford Capital, said: “I’m delighted that Mick is joining Burford in a senior role to help with the continued growth of our European and arbitration businesses. Burford already has a $1.2 billion European portfolio and is the world’s largest arbitration funder, and we are excited about Mick growing those numbers further. I have known Mick for many years as a collaborator and friendly competitor and am very pleased that he has decided to join the world’s leading legal finance platform.”

John Lazar, Managing Director of Burford Capital in London, said: “We are truly excited to welcome Mick to Burford’s London office, and I am personally looking forward to being able to work with him side by side after spending many years collaborating on a number of opportunities. Mick will serve in the senior role of Principal, where he will be focused on all aspects of our UK and European business. Mick adds to our over 40 employees in London, in addition to those in the DACH region, as we continue our investment growth both geographically and in scope.”

Mick Smith, Principal of Burford Capital in London, said: “I am thrilled to be teaming up with Chris, John and other colleagues, many of whom I have known and worked with for years. The opportunity to join Burford, the leading global finance and asset management firm focused on law, was too good to forgo and I look forward to playing a role in its continued expansion in Europe.”

Smith’s start date is 5 January 2021.

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.

Case Developments Commercial

$1M+ Divorcee Litigation Funder Clawback

Litigation finance is a tool for justice, even in divorce. But, when a divorcee bypasses the funder, justice will follow the failed nuptials all the way to the bank.  Lawgazette.co.uk reports that a litigation funder lent capital to a spouse who needed help disposing of her $3M+ marriage. But, her husband countered, and the obligation of the court was to entertain the proceedings. Then, the husband submitted a last minute deal to absolve himself of the situation.  All the while, negotiations were structured to leave the soon-to-be ex-wife without access to liquidity to navigate the split. A funder helped her in her time of need, seemingly a successful venture given the ex-husband’s folding under pressure.  However, given the complexity of the matter, it would appear that the successful party to the claim is not returning the funder’s favor. Now, the court is taking another gander at the outcome, deliberating if the funder is due its fair share.  
Commercial Regulatory Issues

Truckers Cheer Highway Fairness Act 

Louisiana truckers pay the highest premiums, according to a new report on trucking litigation finance. The 2021 Highway Fairness Act is hailed by many long-haulers on America’s highways. ‘Justice driving litigation’ is the phrase everyone is talking about, in reference to the act.  Trucking.org profiles the act as a curb to third party litigation abuse, which is rampant across the industry. Primping the National supply chain pump is the key to keeping people happy across America. The act is sure to tip the balance of fairness in trucking litigation.  The aim is to squash hazards on the highway and protect trucking operators from the deliberation headaches of questionable claims. However, the litigation funding in support of North American trucking is not going to dry up anytime soon.  The Act prompts the trucking companies to consider the following:
  • Legitimate trucking litigation shall support accident victim compensation 
  • Federal courts shall embrace no regulatory arbitrage tricks for claims across state lines  
  • Supply chain harmony is key to keeping the trucking industry profitable, hence no funny business should be promoted leading to litigation finance fraud 
  • Litigation finance firms should champion transparency in trucking claims, setting a new standard for the industry
The Act is especially important to protect insurers from defending dubious claims resulting from staged incidents. Likewise, the Act is expected to protect law enforcement from the headache of rogue truckers gaming the system.
Commercial Regulatory Issues

 U.S. Supreme Court and Congress Assess Patent Law 

Just as Moderna faces a potential COVID-19 patent infringement lawsuit, the Supreme Court and Congress are assessing sweeping changes to United States patent law. All this with a new Patent and Trademark Office director priming the pump for consequential changes to patent eligibility.  Reuters recently outlined a report on the questionable reliability related to patent infringement claims. One such instance explores American Axle and Manufacturing Inc.vs. Neapco and the potential for the Supreme Court to weigh in on the timeless question of when a new invention can earn patent protection. Similarly, Congress is picking up the baton on patent infringement eligibility, as a group of Senators has stated that it was way “past time that Congress act to address this issue.” The question is, will new and broadened legislation engage more patent and trademark litigation?  Meanwhile, two new patent claims are on the desk of Moderna’s CEO:
  • The question of whether the National Institutes of Health scientists should recieve credit for vaccine patent applications has the government and Moderna at odds. 
  • Moderna may also be pressed on who should be credited for mRNA technology via patent protection. 
Pfizer has similar headwinds, facing patent litigation on the origin of fluorescent proteins. Time will tell if Pfizer is held responsible for corresponding patent infringement related to its COVID-19 vaccine design.  All this said, President Joe Biden has signaled his intent to lobby the World Trade Organization to forego intellectual property concerns specific to COVID-19, in an effort to increase vaccine production worldwide.
Consumer

Market Insights: Pre-Settlement Lawsuit Funding 

Pre-settlement funding is a financing tool for claimants who need access to capital in order to invest the necessary resources to succeed at litigation. Prudence requires all members of a pre-settlement agreement to consider a holistic approach to the funding agreements, and any potential ethical actions by all parties during litigation.  Advance Market Analytics has announced new industry research, titied “Pre Settlement Lawsuit Funding Market Insights, to 2027." The 232-page text charts leaders in the pre-settlement space, and makes global predictions on drivers of trends, opportunities for stakeholder and predictions on target markets, that enable funders to direct research and development budgets in order to capture market share.   Here are some key pre-settlement funding topics the report covers:
  • Market trends outlining growing demand for pre-settlement funding to avoid claimant bankruptcy 
  • Demand of pre-settlement funding will continue exponentially industry market growth  
  • Immense public awareness opportunities for funders to educate the border public about pre-settlement funding and associated benefits  
  • Educational demands are necessary to mitigate risks associated with pre-settlement disasters that could hinder the broader market
  • Exploring process oriented techniques to finesse the time complexity of successful litigation 
  • Broader pre-settlement funding market awareness of pitfalls associated to non-compliance of data privacy and cybersecurity
Checkout the report for a full outline of Advance Market Analytics’ predictions for the future of pre-settlement funding. 
Announcements Commercial

CIO Magazine Recognizes Kerberos as the “Very Best of Institutional Investing”

Kerberos Capital Management was named as a finalist in the private credit category of the 2021 Industry Innovation Awards by Chief Investment Officer (CIO) magazine. The Innovation Awards celebrate the “very best of institutional investing” and recognize management firms that have “truly and reliably enhanced the portfolios of their clients” using innovative approaches to asset management, according to CIO. Finalists and winners are chosen by the CIO editorial team in conjunction with an advisory board of chief investment officers.

“We are honored to be named a finalist for the Innovation Award, given especially the pedigree of prior Innovation Award winners and finalists,” said Joe Siprut, CEO and CIO of Kerberos. “I am proud of the work our Investment and Operations Teams have done to continually evolve our client offerings and seek opportunities to improve our investment platform. We think of ourselves as innovators who provide white-glove service to our clients while generating consistent results.”

About Kerberos

Kerberos Capital Management is a boutique alternative asset manager. Kerberos’ flagship strategy is providing innovative capital solutions to law firms. The firm’s differentiated offerings leverage an extensive network of industry relationships, creative financing capabilities, broad credit structuring, and special situations expertise. The depth of our private credit and direct lending platform has enabled us to generate differentiated absolute and risk-adjusted returns in litigation finance markets, regardless of the business cycle or economic environment.

Kerberos’ investment team is comprised of senior members from both the legal and private credit industries, including former principals of the world’s leading law firms and multi-billion dollar private credit funds. In 2020, the independent, London-based Private Debt Investor magazine named Kerberos Capital Management one of its Top 3 Global Newcomers in the private debt fund category. Kerberos manages both separate accounts and pooled vehicles for institutional and high net worth investors worldwide.

To learn more, please visit www.kerberoscm.com.

Commercial Regulatory Issues

Reinsurers Clamor for Regulation of Litigation Finance

It’s fewer than two decades old, but Litigation Finance has blossomed into an industry worth $17 billion across the globe. Just over half of that money, 52%, is being spent in the United States. One reinsurer places blame on legal funding for enabling more large legal awards in cases involving medical malpractice and various types of liability. Calling it “social inflation,” reinsurers decry the industry currently hard at work increasing access to justice for those who can afford it least. Insurance Journal explains that over the past ten years, commercial auto lawsuits and general liability cases are ending in multi-million dollar awards far more than in previous years. For claims involving vehicle negligence, the percentage of outsize awards rose from 21% to 30%. Insurers complain that larger verdicts lead to higher loss ratios and larger premiums for all clients. But surely that’s a reason for businesses to behave better, rather than restrict access to judicial relief for those who have been victimized? We hear insurance providers lamenting their losses, as well as the fact that third-party funders are enjoying high returns on their investments. Could that be because funders use their talents to help clients and businesses, while insurers spent much of the pandemic looking for reasons to not make good on their policies? Not everyone agrees that Litigation Finance is the problem. Michael B McDonald of Morning Investments Consulting, explains that funding is used for meritorious claims—so while this may increase the number of lawsuits overall—it does not make individual lawsuits more expensive. McDonald also points out that legal funding can be used by law firms who are typically barred from raising equity as other businesses can. Debate over funding issues like disclosure, percentages, and security for costs are bound to continue. But the evidence that further regulation is necessary appears to be lacking.
Case Developments Commercial

Award for TPF Costs Upheld by English High Court

International arbitration cases are utilizing third-party litigation funding at increasing rates. As this industry grows, thorny legal issues often arise. One such decision in Tenke Fungurume Mining v Katanga Contracting Services is being hailed by funders and the clients who work with them. Overall, the decision affirms that an arbitration taking place in London is authorized to award costs for expenses relating to third-party funding. MONDAQ details that the arbitration involved commercial agreements regarding a mine in the Democratic Republic of Congo. The arbitration was seated in London and governed by ICC rules. After the hearing, submissions on costs and interest were exchanged by the parties. At which point, Katanga Contracting Services revealed that they had a litigation funding agreement. Some disclosure was ordered, while a request from Tenke Fungurume Mining to cross-examine witnesses in the cost claim was denied. Ultimately, TFM was ordered to pay all expenses claimed by KCS. Counterclaims were dismissed. The litigation funding portion of expenses is estimated at about $1.7 million US dollars. The two challenges were brought under section 68 of the Arbitration Act 1996. This rule states that a party may challenge an award where there’s a “serious irregularity” resulting in an intolerable injustice. The grounds for this challenge were that the tribunal was remiss in not adjourning the arbitration to permit a visit to the construction site, and failing to adjourn the arbitration due to a lead counsel getting COVID. The courts eventually determined that the tribunal considered all relevant factors before rendering a decision, as required. It was suggested that some tribunal decisions were made specifically to hasten the case’s resolution. In fact, the arbitration agreement contained a specific clause that the proceedings should be done as expeditiously as possible. In addition to clarifying costs associated with funding, this ruling affirmed a non-interventionist trend in the courts.
Commercial Fundraising

ESG Investors Enable Discrimination and Racial Harassment Litigation

As the Litigation Finance industry matures, leading funding groups have been vocal about the importance of ESG investing. This is investing in support of Environmental issues, Social Justice, and Governance that works for the greater good. With that in mind, a new fund has been made available specifically for racial discrimination and harassment cases. Black Wall Street details that when funding is used in support of ESG cases, there is more deployable cash for cases involving social justice—such as racial harassment and discrimination litigation. This facet of responsible investing is gaining popularity among third-party litigation funders and LPs who invest with them—leading to positive outcomes for those impacted by environmental and social justice failures. In discrimination and harassment situations, it’s vital that the victims have a path toward justice against their abusers. It’s equally important that employers and services providers are brought to account when they do not follow the law. In a recent video, George the Poet eloquently explains that we all have a responsibility to further the interests of justice. In this context, justice refers to public empowerment on ESG subjects that ultimately impact us all.