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The LFJ Podcast
Hosted By Grant Farrar |
On this episode, Grant Farrar of Arran Capital discusses his firm's value proposition as the only litigation funder focused solely on public sector financing. Grant explains why public sector funding merits its own categorization, what the sticking points are in convincing politicians and others of litigation funding's value, and what his expectations are for future growth in this rapidly-evolving space. For a more in-depth look at public sector legal funding, check out this contribution from Grant and Ed Truant, founder of Slingshot Capital, which explores the various drivers of the public sector legal funding market. [podcast_episode episode="7237" content="title,player,details"]
Commercial

Omni Bridgeway Expands into Latin American Markets

Omni Bridgeway has been a leader in Litigation Finance for over 30 years. In that time, they’ve made a name for themselves in the US, Canada, the Middle East, Asia, and Australia. Now, the company is making a move to Brazil, Chile, Peru, Mexico, and Argentina with the formation of the Omni Bridgeway Latin America Group. Omni Bridgeway details that the group includes Senior Investment Managers Oliver Gayner and Tim DeSieno, Associate Investment Manager Cheng-Yee Khong, Legal Counsels Dana MacGrath, Nilufar Hossain, Dr. Gian Marco Solas, and managing Director Wieger Wielinga. The focus will be on bringing Omni Bridgeway’s services to new populations. This will include financing for commercial arbitration and litigation, award enforcement, insolvency and other distressed debt matters. The expansion is sure to be a boon to new clients and investors alike.
Commercial Covid-19

Australian Insurers Unified in Denying Policy Claims for COVID

There’s no apparent end in sight to the legal battles between insurers and policyholders with regard to business interruption and COVID. At least five law firms are looking at potential class actions against insurers denying that their business interruption policies do not cover pandemics. ABC details that business interruption policies exist to help companies when the unforeseen happens. This might include natural disasters or fires. Most reasonable people would agree that a pandemic is exactly the sort of calamity business interruption insurance was meant to cover. Insurers disagree, however. An early test case relied on a single sentence to make a determination. Whether or not to cover losses for disease depends on whether the disease itself is ‘quarantinable under the Quarantine Act 1908 and subsequent amendments’. But this act was repealed and replaced in 2016 with the Biosecurity Act. The issue now comes down to whether ‘subsequent amendments’ includes the Biosecurity Act. Not surprisingly, a consensus is yet to be reached. Litigation funder John Walker of Investor Claim Partner stated that on some level, he feels bad for insurers who may not have intended to pay out in the event of a pandemic. But that, he says, does not relieve them of their ethical, legal, and moral obligations to their policyholders. In the year since the pandemic began, very few claims have been paid. Walker finds this unacceptable. It’s unclear how insurers can make a claim that payouts for pandemics are not normally covered. Obviously, pandemics are not a normal occurrence, so insurers, courts, and policyholders are all treading in uncharted territory. Further test cases are expected soon. The sad truth is, these cases could drag on for years, leaving business owners without the protection they paid for.
Commercial Covid-19

Turning Litigation into an Advantage in the Wake of COVID

Most business owners are feeling the pressures of COVID. Startups and established brands alike are finding new challenges to overcome as they negotiate lower sales figures, supply chain hassles, and budget shortfalls. But solutions are available if you know where to look. Real Business UK explains that while some companies are relying on high-interest emergency loans, there are better options out there. Litigation might be the key to financial solvency during trying economic times. How? Pending litigation doesn’t have to be a drain on time and resources. In fact, with proper planning and backing from an experienced legal funder—litigation can become its own revenue stream. Often, financial pressures mean not following up on viable litigation. When the markets are down, it may feel like there’s just not enough revenue to go around. In fact, the Litigation Finance industry is not correlated to the rest of the market. Even during COVID, funders are flush with investable cash, and in search of meritorious cases to fund on a non-recourse basis. By sharing risk with funders, companies can pursue litigation without adding additional legal fees to the budget. In the UK and around the world, insolvencies and business closures keep coming. Third-party legal funding, now an increasingly viable asset class, can help companies pursue legal action, and even help with enforcement of awards or managing insolvencies.
Commercial

Remote Legal Tech Leads to Increased Competition

With remote work now mainstream, it’s become the norm for Legal Tech firms to hire well outside their physical location. While this opens up new opportunities to recruit talent, it also increases competition for job seekers, and companies looking to hire. What might this mean for Litigation Finance? Law.com details that physical offices are not a thing of the past just yet—but that day may be coming. Remote work, flexible office time, and teleconferencing are all being normalized thanks to a pandemic that’s still raging one year on. The talent pool for many firms has gone from local, to state-wide, to national, and even global. This applies not just to tech professionals, but to legal teams and those who specialize in legal finance. Some legal tech companies were already hiring remote workers before COVID hit. But many are still hiring with the expectation of filling their office spaces eventually. The level of training and expertise expected from remote workers may not need to expand, as some had predicted. Because staffers work remotely on a part-time or as-needed basis, it’s less essential to gain many skill sets with a single hire. That means that while competition is growing, so is the number of available positions. Ultimately, the expansion and growth of legal tech is good news for attorneys, clients, and the litigation funding industry on the whole. This ecosystem of coexistent entities will continue to adapt to support the goals of the industry.
Commercial

Law Firm Declares that Vauxhall Owners Will Not Pay for Legal Action

Millberg London has stated that, along with the assistance of third-party litigation funders, they will assume all upfront charges in order to begin legal action against Vauxhall. This will ensure that class participants will not bear any costs associated with the case, minimizing their personal liability. Express reports that clients will not be charged if the case is unsuccessful, and that insurance has been taken out to cover costs if there is no award. The case itself revolves around ‘defeat devices’ installed in a car’s engine management system in order to falsify emissions readings. According to the complaint, drivers were told they’d receive an environmentally safe car with a level of performance that’s literally impossible under normal conditions. Vauxhall maintains that they do not use defeat devices, and stresses that their vehicles comply with existing regulations.
Commercial Covid-19

Thoughts on Legal Tech and COVID

Senior Investment Manager and Head of Omni Bridgeway’s offices in New York, Jim Batson, recently hosted Omni's Beyond Hourly podcast. Batson is a former commercial litigator and law firm partner. The podcast features Ariana Tadler, founder of Tadler Law. Omni Bridgeway’s Beyond Hourly podcast shares insights about gender in law, being a consumer advocate, and the ways in which COVID continues to impact the pursuit of justice. Tadler describes an early case she worked as plaintiff’s coordinating counsel for an IPO Securities Litigation. The case began in 2000 and was related to more than 300 different class actions that were coordinated together, dealing with more than 50 investment banks as defendants. This led to discussion of an amendment to the Federal Rules of Civil Procedure, which was needed to update laws to include modern technology like the internet. Tadler herself was instrumental in the amendments process, eventually being appointed by Chief Justice Roberts to the Federal Civil Rules Advisory Committee. Talk of technology led to a discussion of COVID, and how the legal world simultaneously came to appreciate the value of high-speed internet. The need for remote working conditions, teleconferencing, and virtual document sharing has led to upgrades in tech across the industry. Tadler expresses that she’s confident in the tech choices she made for her firm, acknowledging that such decisions are easier in a smaller firm. When asked if she had advice to share with anyone contemplating founding a firm of their own, Tadler’s answer was unsurprising. She recommends tapping into existing network connections and then branching out into new ones. Never underestimate the value of a good Listserv and a diverse workforce. Seeing other firms and products as networking opportunities rather than as competition elevates everyone involved, while providing a framework to recommend and share information that ultimately helps legal teams and clients alike.
Announcements Commercial

$2.47 Billion of Capital Deployed Last Year Across U.S. Commercial Litigation Finance Industry, As Growing Sector Weathers Pandemic Storm

The number of litigation finance providers in the United States, their assets under management (AUM), and the dollars they committed to new financing deals, all grew over the last year, according to a new report from litigation finance advisory firm, Westfleet Advisors. According to The Westfleet Insider: 2020 Litigation Finance Market Report, between June 2019 and June 2020, 46 active funders managed a combined $11.3 billion in assets allocated to US commercial litigation investments, an 18% increase from the previous year. Despite the onset of a global pandemic and resulting disruption to the justice system, the total dollars committed to new investments by funders also grew by 6% – to $2.47 billion.

For the second year, Westfleet analyzed data collected directly from litigation funders to calculate the size of the U.S. litigation finance market. The most complete and revealing picture ever painted of the sector, The Westfleet Insider features data and commentary on the size, scope and focus of U.S. commercial litigation finance. This year’s report builds on the 2019 edition by adding historical context and new metrics that contribute additional depth to the overall market analysis.

“One of our core beliefs is that reasonable industry transparency serves to educate the public and increase comfort with, and ultimately utilization of, litigation finance,” said Charles Agee, founder of Westfleet Advisors. “Because of the aberrational nature of 2020, we are wary of drawing sweeping conclusions about the trajectory of the market, however, it is quite clear that investors continue to be drawn to the sector, attracted by equity-like, non-correlated returns.”

It remains to be seen whether the pandemic and the dramatic slowing of the U.S. economy that followed will be an intermediate-term boon to the litigation finance industry. As highlighted in this year’s report, the disruptions in global business operations likely created a lag in litigation funders’ investment processes that caused deals to extend just outside Westfleet’s data collection period. Regardless, the report’s findings make clear that those who predicted a massive growth year for the litigation finance sector may have underestimated the impact COVID-19 would have on the efficient operation of the nation’s litigation infrastructure.

“Time—and hopefully a rapidly-approaching return to normalcy—will tell what the litigation finance industry’s precise trajectory is,” Agee added. “The challenges of the last year have brought into sharp focus the myriad inefficiencies and opportunities to improve, across the sector, which should drive growth and innovation for a long time to come.”

Additional significant findings from the 2020 edition of the Westfleet Insider include:

  • The average size of the transactions Westfleet Advisors analyzed was $7.8 million. Single matter deals averaged $4.5 million, while portfolio transactions averaged $12.8 million.
  • The distribution of deals between law firms and corporations remained relatively constant from 2019 to 2020.
  • Litigation funding commitments to AmLaw200 firms remained consistent year-over-year, falling slightly from 30% to 28%.
  • Eighteen percent of all capital deployed last year was for patent litigation matters, and 80% of client-directed portfolio transactions involved patent infringement litigation.

About Westfleet Advisors

Westfleet Advisors is the leading litigation finance advisor in the United States. It was founded in 2013 to bring greater transparency and efficiency to the litigation finance market by equipping users of litigation financing with expertise and resources. Our core mission is to ensure claim holders and lawyers have all the information they need to be successful with litigation financing. Our senior leadership has been active in the litigation finance industry since 1998.

Litigation Finance News
Announcements Commercial

Litigation Finance Journal to Host Digital Conference: “Investor Insights into Litigation Funding”

An upcoming digital conference hosted by LFJ promises to uncover how LPs and institutional investors think about their Litigation Finance investments. The February 4th conference begins at 11 am EST, and will feature a panel discussion, Q&A with attendees, and a keynote speech from Charles Agee of Westfleet Advisors.
  • How do university endowments, PE firms and private wealth managers evaluate litigation funding opportunities?
  • How do they select managers to partner with?
  • What are their pain points?
  • And how do they feel about the future of the industry?
Panelists include: Jonathan Rix: Senior associate at Partners Capital. Mr. Rix holds a BA from Oxford and Level 3 CFA certification. David Demeter: Investment Director at Davidson College since 2018. Prior to Davidson, Mr. Demeter was manager of Investments at the University of Michigan for 12 years. Kendra Corbett: Principal on the Investment Team at Cloverlay. Prior to Cloverlay, Ms. Corbett was an Investment Advisor at Veritable for 15 years. The panel discussion will be moderated by Ed Truant, seasoned litigation funding investor and founder of Slingshot Capital. Additionally, the event will feature a keynote address from Charles Agee, founder of litigation funding advisory firm Westfleet Advisors. Mr. Agee co-founded one of the first-ever Litigation Finance companies back in 1998. He was instrumental in building funding portfolios and ensuring that ethical guidelines were followed in an industry that was still largely unregulated. He founded Westfleet Advisors in 2013, with the intention of bringing third-party funding to a wider range of clients. Mr. Agee’s keynote presentation will cover highlights from Westfleet’s 2020 report on the litigation finance market. Tickets for the event can be found here. All ticket holders will receive a recording of the conference post-event, regardless of ability to attend.  We look forward to seeing you at the conference!