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Commercial

Montero Receives Litigation Funding for Case Against Tanzanian Government

Last year, mining and exploration giant Montero, announced its intention for arbitration after accusing the government of violating several provisions of the Bilateral Investment Treaty. The dispute pertains to acts and omissions by the Government of Tanzania that allegedly breached BIT and caused harm to Montero and others. Mining Review explains that the Canadian arm of Omni Bridgeway is providing more than $2.3 million in funds to cover fees, expenses, and legal costs, including enforcement if necessary. Jeantet, who represents the plaintiff, plans to aggressively pursue appropriate compensation in relation to the illegal acts of the Tanzanian Government. Montero declined to comment on the case. It is believed, however, that Montero lost the entirety of its investment in the project in question when its retention license was canceled in 2018. This occurred as part of amendments to existing mining acts, that ultimately gave licensing back to the government. Compensation, if awarded, is expected to include the original investment value, the value of the project itself, and the damages suffered by the company itself. Filing a notice of intent begins a six month consultation period where parties are encouraged to settle out of court. Tanzanian Government officials allegedly made no effort to find a compromise.
Commercial

Scandalous Allegations in Class Action Against Australian Government

A boy sent to Christmas Island in spite of being only 14 is now leading a class action against the Australian government. He is one of at least 100 children prosecuted during a 2-year period beginning in 2010. Ali Yasmin was judged to be an adult after using wrist X-rays, a now-discredited method of determining age. The class action is being funded by an undisclosed litigation finance firm. Yasmin et al are represented by Ken Cush & Associates. The Guardian details that Yasmin’s conviction for smuggling asylum seekers was overturned eventually, but not before he spent more than two years in an adult prison. The Australian Human Rights Commission had already determined that multiple breaches of international human rights laws had been committed. Solicitors for the Australian government are calling the allegations ‘vague’ and needlessly sensationalized, despite breaches detailed in the AHRC’s 2012 report. Yasmin also asserts that nearly 100 days of his prison stay were an unlawful breach of the Migration Act and its requirement that detention only be applied to minors in extreme circumstances. This case illustrates yet again the power of litigation funding to increase access to justice to the marginalized. Without financial backing, class actions like this would be unlikely to move forward.
Commercial

New Talent Flocks to Litigation Finance

New year, new job. Litigation Finance has been expanding as an industry for over a decade. Investment size is growing, more and more clients are seeking out funding, and big names in law, tech, and finance are clamoring to get in on the action. Westlaw reports that Delta Capital Partners Management LLC has brought in a new president. Peter Cornell is formerly of Clifford Chance, and joins the Chicago-based private equity firm this year. A new legal finance firm, Contingency Capital, has hired Jeff Cohen—formerly of Greenwich, Connecticut firm Southpaw Asset Management. Cohen joins the New York firm as a partner and managing director. Some say that legal finance came into its own with the formation of the International Legal Finance Association—an advocacy organization made up of funders from around the world. If these two hires are any indication, prominent law firm and investment professionals are eager to join the growing industry. 
Commercial

What’s Ahead in 2021 for Litigation Funding

As COVID, politics, and financial uncertainty continue into a new year, savvy predictions are the order of the day. With that in mind, CEO of Validity Finance, Ralph Sutton, shares his predictions for third-party legal funding in the coming year. Bloomberg Tax details that in 2020, Litigation Finance saw increased transparency as well as the formation of the industry’s first international association. Portfolio funding and monetization of cases grew in number and sophistication. And of course, returns have been exceptional across the industry. COVID has brought about much in the way of innovation. Communications have become more reliant on digital, long-distance tech. Privacy and security infrastructure has been expanded due to the absence of face-to-face meetings. Mediation also replaces litigation more often, when possible. Litigation Finance is poised to increase its engagement with large corporations and in-house counsel. The ongoing need for liquidity brought about by COVID will likely continue as businesses and firms require ready access to operating or expansion funds. Right now, litigation funders are flush with cash. Investments in the industry are staggeringly high, which means competition for high-profit cases may become robust. More funders will likely find themselves with fewer strong cases to choose from, creating a market where greater risk-taking is necessary. In the coming year, more mergers are expected, as well as the addition of complementary business to existing funding firms. Litigation funders might do well to add economic experts to their repertoire. Ditto claims management professionals, asset recovery specialists, and tech experts, who might all add value to existing litigation funding firms. Ultimately, relationships will play a key role in the success or failure of litigation funders in 2021. Building trust, a reputation for fair dealing, and strong client relationships will make all the difference.
Commercial

Sydney’s Family Court of Australia Can Cost Clients Millions

In Australia, Litigation Finance may have found a new niche—Family Court. Some would say that the Sydney registry of Australia’s Family Court is already highly adversarial. The court is known for wealthy divorcing couples playing out their acrimony in a public setting. Legal teams often seem to encourage this. The Sydney Morning Herald details one couple whose legal fees topped $6 million in less than five years. The wife in that couple ultimately signed away 30% of her settlement in exchange for third-party litigation funding. She claimed that her ex’s lawyers made multiple ‘ludicrous’ applications meant to drain her resources. One family law attorney, Daniella Ruggero, decried the normalization of litigation funding in Family Court. She explained that many family lawyers advise their clients to seek out litigation funding because it gets them an upfront payment for legal fees. It’s been asserted that the Sydney registry is weighed down with protracted legal skirmishes between wealthy divorcing couples—and that they’re using time and resources at the expense of less-wealthy litigants. Runaway legal fees are a growing concern in Australian courts. Jacoba Brasch QC, president of the Law Council of Australia, has said that the law does not allow fees that are not fair, proportional, or reasonable. She affirms that the Law Council takes allegations of overcharging very seriously. Still, one man unknowingly retained a lawyer who had been sanctioned by a judge for running up unnecessarily high legal fees on spurious matters. An assessor found that the man had been charged nearly twice what he should have. Another client was charged nearly $60,000 in legal fees in under two months—which included time spent on matters a judge called ‘immaterial.’ John Walker, chair of the Australian Association of Litigation Funders, explains that Litigation Finance is unlikely to become a major player in Family Law. Most litigants would find the 15-25% fees that funders charge to be excessive and outside their budgets.
Consumer

Lawyer Accused of Misappropriating Litigation Funding Faces Charges

The Attorney Grievance Committee for the First Judicial Department brought disciplinary charges against Don Anthony Carlos Jr. He had been admitted to the State Bar of New York in 1993. The case, listed at Justia explains that Carlos has had an office at the Second Judicial Department for some time. In late 2018, Carlos was suspended from the practice of law. This came after a joint motion alleging the misappropriation of escrow funds, tax evasion, and giving false testimony while under oath. The suspension was initially expected to last two years. At the time of this suspension, Carlos had already received three official admonitions—including misuse of escrow funds, lax bookkeeping, and failing to file retainer statements. The following year, Carlos was served with seven charges. These allege that prior to his suspension from the practice of law, Carlos forged his client’s signatures on documents without their knowledge. The documents included agreements with third-party litigation funders. He was also accused of using someone else’s notary stamp without authority or permission—falsely notarizing the signatures of his clients. It was further alleged that Carlos misappropriated the fraudulently obtained funds meant for client litigation for personal use, and that he mishandled as many as eight personal injury cases. When served with notice of a sanction hearing, Carlos declined to appear. The Referee noted that Carlos had received adequate notice of his obligation to appear, but chose not to do so. It was at this point that disbarment was suggested by the AGC. The Referee agreed. The recommendation for sanction was ultimately granted, and Carlos is effectively disbarred. His name is therefore stricken from the State of NY list of attorneys and counselors-at-law, and must not practice law in any jurisdiction. As of January 5th, Carlos must also relinquish secure cards and other proprietary security items.
Commercial

Akhmedov Divorce Rancor Continues with Funding from Burford Capital

The largest divorce settlement in history is still unsettled. While the ex-wife of Russian billionaire Farkhad Akhmedov was awarded over $600 million in the divorce, she has received next to nothing from her ex-husband. To combat this, she enlisted help from Burford Capital, a publicly-traded legal funder. Baltimore Sun reports that Akhmedova is currently suing her son in a London court for almost $100 million. This includes a significant amount of cash, as well as assets such as art and property. Because Farkhad refused to pay the settlement, Akhmedova’s legal team opted to pursue monies via the couple’s oldest son. Temur Akhmedov is a resident in the UK, which means his assets may be seized to uphold a London court ruling. The Akhmedova lawyers have asserted that Temur was instrumental in helping to hide his father’s assets from his mother—a charge that he strenuously denies. London has long been perceived as a haven for wealthy Russians, many of whom have homes there and even stash their assets in London banks. A “superyacht” owned by the elder Akhmedov was ordered to be handed over to Akhmedova, but the order was refused. This led to the yacht being seized and held in Dubai. Ultimately, Shariah law prevented the enforcement of Akhmedova’s claim to the yacht. Temur has insisted that he was not involved in attempts to hide money from his mother or her legal team. However, the courts appeared to find this suspicious. An assertion that he moved $100 million in paintings to a boat for sheer aesthetic pleasure was scoffed at. Farkhad maintains his refusal to pay the court-ordered judgment against him. Among other things, he specifically mentioned that one-third of all monies given to Akhmedova would go to litigation funder Burford Capital as part of their funding agreement.
Announcements Consumer

New Securitization Fuels Growth for Golden Pear Funding OpCo, LLC

Golden Pear Funding OpCo, LLC announced Kroll Bond Rating Agency (KBRA) assigns a rating to one class of notes from PEAR 2020-1, LLC - an $80 million litigation finance asset backed security (ABS) transaction. The PEAR 2020-1, LLC transaction represents Golden Pear’s first rated security collateralized by litigation finance receivables. “Golden Pear continues to experience tremendous growth and has emerged as a leader in the consumer litigation finance industry. We are excited for this milestone and look forward to continuing to serve our clients and partners,” says Gary Amos, CEO at Golden Pear Funding OpCo, LLC. “Access to the securitization market increases our liquidity and supports our financial performance in this next stage of growth,” says Daniel Amsellem, CFO at Golden Pear Funding OpCo, LLC. The offering was oversubscribed, which represents a recognition of Golden Pear’s strong fundamentals as well as a desire by institutional investors to invest in the growing litigation finance industry. Golden Pear has funded over $675 million in aggregate advances since its inception in 2008. The company’s growth and differentiation in the consumer litigation marketplace have been achieved by industry-leading innovation and a focus on service for both attorneys and their clients. About Golden Pear Funding OpCo, LLC: Golden Pear is one of the largest specialty finance companies in the United States funding legal matters and purchasing medical receivables from physicians and medical centers. The company empowers its clients navigate the legal system and provides them with financial solutions that work. Golden Pear is backed by a partnership of several private equity firms that allow for the stability and continued institutional growth of the firm.
Commercial

Legislative Changes Lead to Increase in Class Actions

It cannot be denied that as acceptance of Litigation Finance increases, class actions increase in number. This is viewed by most as a positive, as it demonstrates that the practice is affording access to the legal system. Increasingly, class actions involving pension fund-related investment losses are cropping up across the US and Europe. IPE Magazine explains that as institutional investors become more active, they’ve also become more litigious when big losses occur. As European investors are seeing more sizable losses for a number of reasons, they are seen as the driving force behind this new wave of litigation. Jeroen can Kwawegen, a partner in New York firm BLBG, explains that European pension funds are markedly different from those in the US. In Europe, pension funds focus on sustainability, environmental concerns, and investing in social programs. In a sense, these class actions are a kind of corporate governance tool to enforce responsible behavior and to recover losses. Some say that litigation is an effective way to engage with a company when informal options are exhausted. But this ‘punishment litigation’ is not always appropriate or effective. After all, investors may not want to break off their relationships with a company—yet it is essential that the misconduct not become repetitive. The recent REST settlement illustrates that litigation can have a positive impact beyond the claimants involved. When the Retail Employees Superannuation Trust settled, they agreed to a net-zero carbon footprint by 2050, along with increased transparency and a more careful assessment of climate change risks as they pertain to investment. Neil Purslow, CIO at Australia’s Therium Capital, states that the REST settlement is unlikely to unleash a flurry of similar cases in other countries. While the Litigation Finance community is well-funded and poised to invest in meritorious cases, it’s unlikely that Australia will see the same type of investor cases.