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Consumer

Percent Announces Partnership with Mustang Litigation Funding

Alternative Investment specialist Percent recently announced a strategic partnership with Mustang Litigation Funding. Mustang, founded in 2018, focuses on portfolio litigation funding and personal injury case funding. This includes product liability, auto accidents, and premises liability. The partnership is expected to expand investment options and grow the companies' network of partners. Percent explains that litigation finance is now a well-established alternative asset class that’s gaining global acceptance. Non-recourse funding is provided to pursue meritorious legal matters, with remuneration to the funder coming out of any settlement or award in the case—often calculated based on how long the case takes to be resolved. Jimmy Beltz, Co-Founder and Managing Partner of Mustang Litigation Funding, stated that this partnership will be a boon to investors who can now benefit from this uncorrelated asset class. Alex Pirro, VP of Capital Markets at Percent, details that Mustang’s impressive relationships with partners and firms speak well of the funder's ability to source and manage cases.
Commercial

Tyro Payments Class Action Investigation

A potential class action against Tyro Payments Limited is being investigated by Bannister Law Class Actions. Tyro is Australia’s largest non-bank provider of Point of Sale Electronic Fund Transfer services. Service outages in January of this year impacted hundreds of businesses—causing loss of sales revenue, service fees that provided poor or no service, customer dissatisfaction, and general damage to businesses as they sought to compensate for Tyro’s outages. Bannister Law Class Actions explains that the claim alleges breach of warranties, breach of contract, and that the services provided by Tyro were not of reasonable quality. Further, Tyro allegedly fraudulently claimed that its service worked 99.9% of the time. This potential class action will be funded by Court House Capital. As such, claimants will not endure any out-of-pocket costs. Fees and costs will be deducted from any settlement or award. Eligibility requires the following conditions to be met:
  • Businesses contracted with Tyro payment services before January 5 of this year.
  • Businesses endured connectivity issues beginning in January 2021.
  • Losses were endured due to Tyro connectivity failures.
Potential compensation will be based on loss of revenue, terminal and rental fees, and any damages caused by finding replacement services. Interested parties may contact Bannister Law Class Action Tyro Team.
Commercial

Peking University Founder Group Seeks Litigation Funding

Liquidators of Nuoxi Capital and Kunzhi Ltd are presently engaged in negotiations with potential litigation funders. Multiple sources claim that it will be very expensive to recover various inter-company claims—not to mention the need for a Beijing court to accept a previous keepwell ruling originating in Hong Kong. LinkedIn details that the proceedings are expected to generate recoveries for offshore bondholders. Claims stem from PK Founder allegedly breaching EIPU deeds, as well as the alleged breach of keepwell assurances. Nuoxi Capital focuses on issuing debt securities for credit, refinancing, and acquisitions. Founded in 2017, it operates as a ‘special purpose entity’ in the Tech industry.
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.