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Commercial

Mastercard Case Moves Forward as UK Inches Toward US-Style Class Actions

Litigation Finance received a holiday gift in the form of a new UK Supreme Court decision allowing a GBP 14 billion case to proceed against credit giant Mastercard. The claim, which could involve over 46 million claimants, alleges that the credit card group charged excessively high fees and overcharged customers regularly. Proactive Investors explains that the ruling opens the door to a bevy of new collective claims. A similar claim was filed last year against five big banks alleging price manipulation. Many have presumed that litigation funders are salivating at this news. Neil Purslow, CIO of Therium Capital, has stated that Therium will be making investments in these types of cases as a result of this ruling.
Commercial

Arbitration Against Tanzanian Government Begins

Indiana Resources, an ASX-listed gold mining company in Australia, is proceeding with its case against the Government of Tanzania. The case involves the alleged illegal expropriation of a nickel mining project. The action is led by two incorporated UK companies: Ntaka Nickel Holdings, and Nachingwea UK. Mining Review explains that the case, which is funded by Litigation Capital Management, is expected to convene in the first quarter of next year. An arbitral tribunal will be appointed, followed by filing the claimant’s evidence and supporting documents. Original estimates of losses are close to $1 billion. The government of Tanzania has allegedly been reticent to participate in every step of the process. Plaintiffs claim they refused to come to the negotiation table when claimants invited them to negotiate in good faith, and that they refused to engage concerning the formation of the tribunal. Bronwyn Barnes, executive chair at Indiana Resources has stated that she is pleased to see such progress in recent months. She goes on to affirm that there is adequate litigation funding in place and that the memorial is well underway. According to Barnes, $95 million is the minimum claim for expected compensation.
Commercial

Litigation Funding Ethics in the US

The Third Annual Ethics Summit from Frankfurt Kurnit was held last month. The litigation funding panel covered a host of ethical and legal points of interest. These include coverage of the back-and-forth between the industry and the NYC Bar Association, and the ever-evolving rules of professional ethics. MONDAQ begins with an overview of the practice of Litigation Finance, including the non-recourse nature of funding and how it differs from traditional loans. This detailed the many advantages of litigation funding, including helping average citizens see their day in court without financial barriers. It also affirmed the risks—such as pushing the boundaries of attorney-client privilege, or funders attempting to make decisions about the cases they fund. The NYC Bar Association turned heads in 2018 when they asserted that Rule 5.4a disallows fee-sharing with non-lawyers—and therefore renders litigation finance prohibited. This stance has been debated, sometimes vehemently, by legal professionals. However, the opinion is not law, and litigation funding agreements have not changed because of it. The question of disclosure remains in flux. How much should a lawyer tell a potential funder? What should they be obligated to reveal? This is especially relevant in single-case funding. It only makes sense that funders want details to properly vet cases they fund, but the question of what they’re legally entitled to know remains up in the air.   When states refine professional ethics and rules regarding litigation funding, they help ordinary citizens gain access to the justice system. While questions about disclosure and privilege remain, it cannot be denied that anyone who has been wronged deserves their day in court. Further, it should not be denied that litigation funding is the most effective way to secure the rights of citizens to pursue a case even when they lack the financial resources to do so.
Commercial

Insights into Funding International Collective Proceedings

The first day of the Global Class Actions Symposium brought with it new considerations for claims filed in the US and EU. In the United States, champerty is still an issue, as nearly half of all states do not allow the practice of Litigation Finance. Some have even said that regulatory trends are moving in two directions at once—with some seeking to restrict or heavily regulate the use of litigation funding, and others laying the groundwork for its mainstream acceptance. ISLG explains that regulatory developments are often focused on changes within the industry, and mitigating their impact. In the last few years, litigation funding has shifted from funding single large cases, often class actions, to portfolio funding. This reduces risk for funders while helping legal firms manage budgets. Some have suggested that this funder-friendly approach is incongruous with the foundational concept of Litigation Finance—increasing access to justice. Disclosure is an ongoing sticking point in litigation funding, as is the fear that funders will hold sway over decision-making in the cases they fund. This, despite existing law typically requiring that funders not control any aspect of the case. In the EU, class action cases are called ‘collective redress’. The EU is expected to strengthen the laws that impact such actions. Typically, the use of litigation funding must be disclosed to the courts, regardless of which side is utilizing it. Meanwhile in Germany, Litigation Finance has been legal since 1999, but it has never gained the popularity it has elsewhere. Day one of the symposium concluded with Melissa Ferrari, president of Verein Global Justice Network, who affirmed the importance of funders not controlling any aspect of a funded case.
Commercial

Eni Will Issue Subpoenas on Nigerian Litigation Funding Arrangements

Eni, the Italian energy company, was recently given court approval to subpoena companies accused of taking part in the Nigeria OPL 245 scandal. This is expected to include asset recovery companies as well as litigation funders. Previously, Eni suggested that the government had taken action under pressure from third parties who are hoping to profit illegally. Premium Times reports that there are seven companies involved, including Poplar Falls LLC, and six Drumcliffe Partners entities, based in Delaware USA. The subpoenas are not expected to require the release of privileged documents. The evidence sought by Eni was largely unattainable by any other method, which is why court assistance was necessary. Eni insists that their request was not intended to circumvent existing restrictions or policies on gathering evidence. In fact, the discovery sought by Eni is narrow and non-intrusive. The scandal itself involves the former oil minister of Nigeria, Dan Etete. Etete is accused of controlling accounts that received more than a billion dollars from Eni and Shell—both multinational oil giants. From those accounts, over $500 million was transferred to accounts controlled by Etete, and Abubakar Aliyu—the owner of AA oil. This 2011 transaction was authorized through several ministers of the Nigerian cabinet, ostensibly as payment for OPL 245—one of the richest oil blocks in Nigeria. Initially, both Eni and Shell stated that they were unaware that the money would go to Etete and his associates. Evidence showing that claim to be false was eventually revealed—as Shell eventually affirmed. Currently, Etete, Shell, Eni, and several oil company officials are being prosecuted in Italy for their alleged roles in this scandal. The deadline to comply with subpoenas will be 30 days from the date it is served.
Commercial

New Scholarship for ASU Law Students Announced by Pravati Capital

Scottsdale, Arizona’s leading litigation finance and consulting firm has established a scholarship in support of gifted students. The scholarship will go to exceptional students attending Sandra Day O’Connor College of Law at Arizona State University. ASU reveals that the Pravati Capital Endowed Scholarship is part of the Dean’s Circle for donors, in support of law students looking for mentorship and networking opportunities. It also provides financial support to gifted students, including those attending ASU on campuses in LA, Washington DC, and downtown Phoenix. Dean of Law at ASU, Douglas Sylvester, stated that they are grateful for such a generous donation and that the money will be used to continue to provide a first-rate law school experience for students. Pravati Capital provides litigation funding to firms on a non-recourse basis.
Commercial

Therium Capital: Identifying Claims

 In an insolvency situation, a company and its legal department will have to structure an affirmative recovery program. After that comes building a framework to identify claims they’ll pursue. In this process, understanding potential claims and being aware that an affirmative recovery program is underway are both critical. That’s why keeping everyone in the loop is essential. Therium Capital explains that how effective an affirmative recovery program is will depend largely on how well the company understands available claims. In-house legal teams can be instrumental in bringing in new claims proactively. Potential recoveries can arise from a variety of opportunities including insurance claims, IP usage, and commercial contracts. It’s vital that business units and legal teams all understand which claims are worth pursuing. Ultimately though, general counsel will make the final determinations. Any employee can serve as the eyes and ears of the legal department if they’re properly trained and motivated to do so. Relationship building, education, corporate culture, and employee incentive programs can all play a part in a successful affirmative recovery program.
Commercial

Temur Akhmedov Reportedly Lost $50 Million in High-Risk Trades

Infighting among members of the Akhmedov family continues, as divorcee Tatiana Akhmedova continues to accuse her son of hiding assets. Temur Akhmedov, London oil trader and son of Farkhad Akhmedov, denies that he hid money from his mother. City AM reports that the younger Akhmedov recently stated that while he was studying at the London School of Economics, he engaged in several risky trades. He claims to have ultimately lost more than $50 million. This was revealed during a London court case over the disbursement of a 2016 divorce settlement. Burford Capital is funding Akhmedova’s case.
Litigation Finance News
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LFJ to Host Special Digital Conference on Commercial Litigation Funding

2020 was a pivotal year for commercial litigation funding, and the industry approaches 2021 on the cusp of massive growth. Litigation Finance Journal is hosting a special digital conference which will cover the most impactful stories of the past year, and offer insights into what next year will bring. This special one-hour panel discussion and Q&A will explore the major events of the past 12 months, including the Omni/IMF merger, the founding of the ILFA, industry innovation (corporate portfolio funding and financing M&A transactions) and more. Our panel of industry experts will also offer their views on what's in store for 2021 and beyond.

Moderator

Ed Truant Founder Slingshot Capital

Panelists

Andrew Saker CEO Omni Bridgeway

  Neil Purslow Co-Founder Therium Capital Management

   Nick Rowles-Davies Executive Vice Chairman LCM

The event will be held on Thursday, December 17th at 5pm ET. It will be audio-only, and comprise a 45-min panel discussion, followed by a 15-min Q&A with attendees. Tickets can be found here. Anyone who purchases a ticket will receive a recording of the event; it is not necessary to attend to receive the recording.  Questions? Write to: jfreund@litigationfinancejournal.com Hope you enjoy the event! - The LFJ Team
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