A recent settlement involving Sydney telecom giant Vocus is raising questions about third-party funding arrangements. The debate between common fund orders (CFOs) versus funding equalization orders (FEOs) reached its apex, when Justice Moshinsky’s ruling resulted in a lower payout to litigation funder Woodsford.

The story of boyhood friends who became business partners in adulthood should be a sweet one. But the business relationship between personal injury lawyer Sean Callagy and litigation funder Legal Capital Group—run by George Prussin—has definitely gone sour.

This week, the Supreme Court of Canada publicly released the reasoning behind its January decision in a case involving third-party litigation funding. The ruling provides clarity for an earlier act known as CCAA—the Companies Creditors Arrangement Act. The unanimous ruling found that a gaming software company may use third-party funding to pursue a $200MM lawsuit against Callidus Capital Corporation.

The contentious divorce of Putin ally Farkhad Akhmedov and his wife, Tatiana, has produced escalating divorce proceedings for nearly two decades. Lawyers for each party have asserted multiple claims of previous divorces that can’t be corroborated, requests for personal emails between father and son, and now—an accusation of champerty regarding Burford Capital’s funding of Tatiana Akhmedova. Technically, the backing of claims by third-party funders in exchange for profit has been illegal in Russia since feudal times.

The global financial crisis of 2008 brought with it a flood of class action litigation against big banks. A similar wave of litigation is expected in the post-COVID world. Indeed, it might be even more widespread. In recent years, the rules and procedures surrounding the formation of class action suits have become more sophisticated. Advances in the understanding and use of Litigation Finance make pursing class actions less complicated.

The pandemic is far from over, but the steps that legal firms are taking to mitigate it have only just begun. Third-party funders are already seeing shifts in the way firms are approaching them. It’s not surprising that law firms will be creative and proactive in heading off financial woes before they occur—but it is startling how quickly things are changing.