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Commercial

Innovation and Litigation Finance—A Winning Combination

Current economic conditions are making it more challenging to run a business regardless of industry. In the legal world, budgets are shrinking and GCs, already stretched to the brink, are taking on even more costs. An ability to adapt to circumstances while finding ways to save money is of the essence. Burford Capital explains that when money is tight, the last thing firms want to do is take risks. At the same time, the need for innovation is greater than ever. The solution? Legal Finance. Innovation in the legal world is nothing new. But now, increased efficiency and time-saving techniques aren’t just desirable—they’re mandatory. Clients and customers require digital signatures, electronic billing and payments, secure virtual meeting spaces, and protected file transfers that maintain the privacy of clients and firms. A 2019 Legal Finance Report shows that more than 70% of in-house counsel chose not to pursue meritorious cases because they didn’t want to take the financial risk. Not only that, over 60% of in-house lawyers are failing to collect judgments or awards to the tune of tens of millions. In these instances, Litigation Finance can make all the difference.
Announcements Consumer

Law Finance Group Offers Answer to Challenging Question Law Firms Now Face: “When Will We Get Paid?”

August 27, 2020—It’s a question many are now confronting, and it has nothing to do with the law: “When will we get paid?”

As the pandemic and other macro factors continue to impact the economy, law firms’ efforts to collect from their clients present a real challenge. On one hand, firms need steady revenue to meet their operating expenses and other obligations; on the other, they need to put client interests first. With clients facing their own financial stresses, lawyers must show extreme sensitivity to their clients’ challenges, arguably before their own. Law Finance Group, a leading litigation financier and provider of capital to law firms for more than 25 years, has recognized this dilemma and stepped in with a solution—AR Now: Accounts Receivable Financing.

A first-of-its-kind product, AR Now will:

  • Immediately advance 50% of a client’s outstanding bill.
  • Allow law firms to maintain the billing relationship with the client, while Law Finance Group stays in the background.
  • Offer facilities up to $20 million or more, giving law firms peace of mind to focus on their work.
  • Avoid personal guarantees that law firm lenders typically require.

When clients pay their invoices within six months, law firms keep 93% of the amount billed. When invoices are paid within a year, law firms keep 88%. The full program terms allow law firms to give clients up to 18 months to pay outstanding bills.

“You don’t need to read about furloughs and cost-cutting to know that firms and their clients are under great stress right now,” said Dan Bush, Law Finance Group’s chief investment officer. “We’re happy to offer a product that relieves a lot of that stress on law firms, while also benefitting their clients.”

AR Now also holds the promise of relieving any tension that may exist between law firm partners and management and provides a strategy to navigating this reality together. Often, compensation plans incentivize partners to offer overly generous discounts that get funds in the door, but work against the broader firm goal of maximizing revenue. AR Now aligns the interests of partners and management, while offering attractive advantages to both groups.

Partner benefits: Partners can offer clients extended payment terms, further establishing themselves as valuable problem solvers in a time of crisis. For them, AR Now also allows the firm to book revenue that could contribute to partner distributions.

Management benefits: AR Now gives chief financial officers, chief operating officers, pricing professionals, and client services managers immediate capital without having to offer clients substantial new discounts or tapping their lines of credit.

“Our AR Now product has other applications for law firms and their clients—for instance, facilitating new alternative fee arrangements,” Bush said. “Ultimately, we’re here to help both firms and their clients get through this challenging moment, and, as always, are willing to get creative to get that done.”

For detailed terms and more information about AR Now, click here.

About Law Finance Group

For more than 25 years, Law Finance Group has been a leader in the litigation and law firm finance industry. We have provided over half a billion dollars in financing for individual lawsuits and litigation portfolios to parties and their law firms. Our innovative financing solutions are based on our deep understanding of the civil justice system and the realities of the modern law firm business model. Law Finance Group maintains offices in San Francisco, New York, and Austin.

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Commercial

Qui Tam Relators Compelled to Disclose Litigation Funding

The FCA or ‘False Claims Act’ has secured more than $3 billion in settlements or judgments in civil cases in the 2019 fiscal year alone. Much of that relates to healthcare claims, and nearly two-thirds involve relators—which is another term for whistleblowers. This is not surprising, given the widespread application of Qui Tam provisions that offer a portion of an award to whistleblowers who assist the prosecution with cases under the FCA. JD Supra explains that rampant fraud in government programs combined with the money to be made under a writ of qui tam means this type of litigation is increasingly popular. Litigation Finance is now entering the fray of FCA cases, though there are no definitive numbers on how much litigation funders have invested in FCA suits. While increased regulation has not yet been called for, the DOJ does appear to have concerns over third-party funding in qui tam cases. With that in mind, the DOJ now requires all qui tam relators to reveal any agreements they may have with third-party funders. Many think this move toward transparency might signal the end of funding in qui tam FCA cases—and that in turn, this will decrease the number of whistleblowers coming forward. The DOJ initially expressed concern regarding FCA cases when the relator is involved in litigating on behalf of their government. At a January 2020 speech, former Deputy Associate AG Stephen Cox explained that the DOJ was looking into whether or not disclosure in such cases was appropriate. Now, a series of questions will be asked of all FCA relators: --Is there an agreement with a third-party funder? --Who is the funder? --What information has been shared with the funder? --What is the nature of the written agreement with the funder? --Does the agreement give the funder control over decision making (this is generally prohibited in all cases)?
Commercial

Does Litigation Funding Turn David into Goliath?

At what point might a David become a Goliath? Some would say that Litigation Finance is the catalyst for such a transformation. Take the case of Akiane Kramarik and the famed portrait of Jesus she painted at age nine. Over the years, she’s been the subject of television appearances, media events, and even a big-budget film. But as she grew up, missing royalty payments and other shady dealings began to emerge. Bloomberg Law explains that the artist recently acquired funding from Legalist, a third-party funder, in order to sue former business partner Carol Corneliuson and her business, Art & SoulWorks. For most people of modest means, Litigation Finance provides a way for those who can’t afford legal representation to have their day in court. Kramarik and her family claim that they need help from funders to finance their case. But Corneliuson claims that the Kramarik’s can now use the funds to make outrageous demands—though there’s no evidence that they have done so. In January 2019, the Kramarik family terminated their relationship with Corneliuson. After a short disagreement about selling existing merchandise, Kramarik’s father decided to look deeper. That’s when he learned that Art & SoulWorks had not paid full royalty payments, and allegedly sold low-quality reprints to counterfeit markets. Referencing items she had already purchased for sale that were now ostensibly worthless—Corneliuson filed a countersuit. Eva Shang of Legalist has stated that Ms. Kramarik is exactly the kind of client who can benefit from litigation funding. The case itself does not appear to be near a settlement. Indeed, Corneliuson’s attorney has said that her client would be unable to afford the proposed settlement of $2 million. A partner at the firm representing the Kramarik’s has said that the firm isn’t pursuing the case any differently than he would have, had no funding been secured.
Announcements Commercial

Significant Legal Win for “David” Canadian Corp in London Court

Global Energy Horizons Corp (GEHC) an alternative energy corporation headquartered in Victoria, British Columbia, Canada has won a significant Judgment against The Winros Partnership (formerly Rosenblatt Solicitors) a City of London based law firm. GEHC’s claims are related to the legality and enforceability of three Conditional Fee Agreements (CFAs) alongside several misconduct allegations against Rosenblatt. A CFA  is a contingency agreement between a law firm and its client whereby the law firm assumes the costs of pursuing a litigation for a reward that could amount to 100% of its customary fee. The case considered GEHC’s claim that all three CFAs entered into with Rosenblatt were unenforceable, and in any event wrongly terminated, and as such Rosenblatt wrongly claimed costs, despite the existence of an unenforceable ‘no-win, no-fee’ CFA. The case also considered numerous allegations of impropriety, including Rosenblatt misrepresenting to its client that monies were owed. The Judgment, handed down on Thursday August 20, 2020, found for GEHC in all its claims. Master James, the presiding justice, noted that Rosenblatt “left GEHC’s best interests in their rear-view mirror” and “favoured its own interests over its client’s.” The Judgment found that Rosenblatt had misrepresented the following to GEHC and/or the court:
    • that one of the CFAs had come to an end, before wrongly and unclearly invoicing the claimant for monies allegedly owed
    • a win had been achieved under a later CFA resulting in additional fee requirements of £7 million
    • GEHC had agreed to gift Rosenblatt in excess of £2 million, including £460,000 in irrecoverable success fees which Rosenblatt maintained they had explained to GEHC that there was no contractual entitlement
    • further, Rosenblatt failed to keep records of the alleged advice or the alleged agreement
The conduct of the matter was punctuated by poor or non-existent written communications, on which Master James remarked: “This is one of a number of occasions upon which a very important event, involving a large sum of money, has allegedly happened but in respect of which there is no paper trail to verify it, in spite of the fact that Rosenblatt is a commercial law firm and well-versed in the importance of reducing important agreements to writing.” GEHC was represented by a London-based team of the firm Eversheds Sutherland and Ben Williams QC of 4 New Square, London. The Eversheds Sutherland team was led by Partners David Flack and Mark Cooper, and Head of Costs Glenn Newberry. The Winros Partnership were represented by Rosenblatt Solicitors and Andrew Post QC of Hailsham Chambers, and Adam Zellick QC of Fountain Court, all of London, UK. Glenn Newberry, Head of Costs and Litigation Funding at Eversheds Sutherland commented: “We’re delighted the Judgment found for GEHC on all counts. This is a significant case, being one of the first to find a post 2005 CFA to be unenforceable following the abolition of the 2000 CFA Regulations in 2005, as well as tackling what became an ever-growing number of incidences of misconduct. The team faced numerous challenges during proceedings, including a lack of documentary evidence, nor correspondence nor file notes of conversations of the advice which Rosenblatt purported to have provided to GEHC in respect of the unusual and complex fee agreements.” Brian de Clare, President of GEHC commented: “GEHC engaged Eversheds in 2016 to investigate our rights following the unauthorized removal of funds from our Client account at Rosenblatt. That was a shocking situation for us to have been put in, especially where we had placed great trust in Rosenblatt from the very beginning. For Eversheds to have uncovered even further grave irregularities in our fundamental contractual relationship with Rosenblatt (the CFAs) made us realise the trust we placed in Rosenblatt actually exposed us to being taken advantage of by them. We are extremely grateful to the Eversheds Sutherland team and Ben Williams QC for their expertise, hard work and perseverance on this difficult to comprehend matter which unearthed a catalogue of misconduct incidents stretching back a number of years.” The case was heard in the Senior Courts Cost Office in London. The hearing lasted 10 days in 2018, including eight days of live evidence. The defendant has sought permission to appeal. Rosenblatt Solicitors were hired in 2009 to litigate GEHC’s case against Robert Gresham Gray in London for breach of fiduciary duty in 2006 by removing GEHC’s opportunity to participate in an innovative and patented technology/process, tested and utilized in the U.S. and around the world, for increasing oil & gas recovery, and the associated benefits derived therefrom. Eversheds Sutherland also represent Global Energy Horizons in the ongoing litigation against Gray, who was found guilty by Lord Justice Vos in 2012 for breach of fiduciary responsibility.
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Announcements Consumer

Legal-Bay Pre-Settlement Funding Announces Expansion of Car Accident and Personal Injury Departments Due to Rising Amount of Cases

WEST CALDWELL, N.J., Aug. 24, 2020 /PRNewswire/ -- Legal-Bay, the premier Pre Settlement Funding Company, announced today that they have expanded their car accident and personal injury departments due to the influx of new filings during the first half of 2020. Legal-Bay is one of the leading lawsuit loan companies in the industry, and offers a very fast approval process. Even with fewer people leaving home due to the COVID pandemic, Legal-Bay is seeing more car accident and personal injury claims than ever before. Because of this, court rulings are taking longer than usual. An exorbitant amount of time may pass before plaintiffs receive their settlement money. Legal-Bay is once again reaffirming their dedication to arrange loans on settlement claims for their clients, essentially a cash advance against a pending settlement. To apply now, please go to the company's website HERE or call toll-free at: 877.571.0405 where experienced agents are standing by. Chris Janish, CEO, commented on the company's readiness, "Unfortunately, we are seeing a bevy of personal injury lawsuits backlogging the courts as cases come in quicker than they are settling. Insurance companies are using the slowed process to lowball plaintiffs into taking less-than-expected settlement values. Legal-Bay remains committed to our clients that need a loan settlement now, rather than having to wait out the endless days for their case to resolve at trial." If you have an active lawsuit and need a loan on lawsuit, Legal-Bay may be able to assist you immediately. To apply online, please visit us HERE or call the company's toll-free hotline at 877.571.0405.    Plaintiffs in personal injury lawsuits including car, truck, and boat accidents, medical malpractice, and premise liability cases are filing at a rate previously not seen before. Legal-Bay can speak with you about loans for settlements and get you the cash you have coming to you… without having to wait. Legal-Bay's non-recourse pre-settlement funding programs are also known as lawsuit loans, law suit loans, loans for lawsuit, loans for lawsuits, or settlement loans. The cash advance settlement loan is risk-free, as the money does not need to be repaid should the recipient lose their case.
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Announcements

Defrauded Investor Scores Victory in Qatari Court Saga

DOHA, Qatar, Aug. 24, 2020 /PRNewswire/ -- The Swifthold Foundation, which was defrauded by Sheikh Fahad bin Ahmad bin Mohamed bin Thani Al Thani, a member of the Qatari Royal Family, and his Qatari company, Fast Trading Group, has been patiently waiting for the Qatari Enforcement Court to enforce Swifthold's $6 billion U.K. High Court Judgment since the Qatari Trial Court issued a Writ of Execution to formally recognize the Judgment in Qatar in the Summer of 2019. In February 2020, the defendants filed an appeal with the Enforcement Court to seek a stay of the enforcement proceedings and to declare the enforcement proceedings invalid.  In addition, he filed an appeal of the underlying recognition of the U.K. High Court Judgment with the Court of Appeal in Qatar. On August 18, 2020, the Enforcement Court dismissed the defendants' appeal and now the enforcement of the U.K. High Court Judgment can continue unabated.  According to Delta Capital Partners, the American litigation finance and support firm that the foundation has retained, this should be one of the last remaining hurdles to overcome before Swifthold can expect to collect significant proceeds from the defendants. Delta's CEO, Christopher DeLise, stated, "It has been a long wait to resolve this appeal due to COVID-19, but we are very pleased by the Enforcement Court's ruling and are anxious to continue enforcement of the judgment against the defendants.  The defendants' appeals were without merit and filed at the last minute solely to try to delay the inevitable and therefore we are now optimistic that the Qatari court will enforce without further delay." As of today, no hearing has been set for the Court of Appeals hearing, but Delta and Swifthold's Qatari counsel believe the outcome will ultimately be the same if the courts follow established Qatari law and procedure and continue to respect international law. Delta's CEO closed by commenting, "We are confident that the Qatari Court of Appeals will dismiss the defendants' appeal and Swifthold will finally have justice and the compensation it so rightly deserves in the very near future. "
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Commercial

Insurers Counter $185MM Case with $9MM Offer

All eyes are on a fee request from Quinn, Emanuel, Urquhart, & Sullivan. The class action, which revolved around Obamacare and insurers left unpaid after Congress neglected to pay promised subsidies, was completed in April when the US Supreme Court ruled that insurers were owed roughly $12 billion in unpaid subsidies meant to cover Americans without insurance. Bloomberg Law explains that the requested legal fee works out to about $18,000 an hour—though that’s an estimate as no timesheets were provided. Not surprisingly, several insurers thought this was absurdly high, using words like “astronomical” and “unreasonable” to describe the request. They countered the $185 million demand with an offer of $9 million. This brings up the use of the “lodestar method,” which is used to calculate legal fees. Insurers who signed on to the class action agreed to pay a maximum of 5% of any award. Despite this, insurers have said that even $20 million would be too high. Interestingly, it may be litigation funders who win big if these insurers get their way. As several insurers sold their interest in the case in exchange for any award, lower legal fees mean more money for those (as yet unnamed) funders who invested in the case.
Commercial

Litigation Finance in India; Not So Fast

India appears to be the latest country to embrace the practice of Litigation Finance—at least in theory. The Indian Prime Minister, Narendra Modi, recently spoke about foreign investment opportunities in India. One of the many types of foreign investments being encouraged is third-party litigation funding. This leaves some asking whether or not the Indian judicial system is ready for the practice. Taxscan India details that in India, much like the rest of the world, COVID has hit businesses hard. As the courts scramble to keep up with new cases, virtual hearings are becoming more commonplace. These seem like ideal conditions for litigation funding to flourish—yet India has not caught up with the rest of the developed world in taking full advantage of the opportunities lit fin presents. In addition to funding legal matters that might otherwise go abandoned, firms can use litigation funding to keep expensive cases off the balance sheet and keep funds flowing to take care of general expenses.  Currently, the Indian legal market is worth about $80 billion. Yet ongoing delays in the Indian judicial process is keeping outside investors from getting involved in litigation funding.   Technically, Litigation Finance is permitted in India per the Code of Civil Procedure—but the current state of the legal system seems tailor-made to discourage foreign investment in Indian litigation.