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Commercial

Polish Government Sought for Arbitration in Coal Mine Action

Australian coal giant Prairie Mining has begun international arbitration proceedings that assert a breach of bilateral treaties. The action centers around Poland’s decision to block investment in the Jan Karski and Debiensko mines. The Economic Times reports that Prairie Mining secured roughly $12 million from a litigation funder in July of this year. Still, the company stated it is willing to engage in good faith discussions to resolve the dispute. As yet, the Polish government has opted not to engage. Exact amounts sought in the action have not been released. It’s unclear whether purported losses will include lost profits, damages, costs spent developing the mines, and costs associated with arbitration.
Commercial

ABA Best Practices for Litigation Finance Have Mixed Reception

When Litigation Finance was still making a name for itself, the American Bar Association was among the first organizations to write researched commentary on it. The white paper published by the ACA Commission on Ethics remains influential today. Above the Law details that simply publishing a best practices guide legitimizes Litigation Finance and affirms its widespread importance and acceptance. According to the introduction, the best practices guide is just that—guidance. It details what it considers to be the most pressing issues to consider before utilizing litigation funding for any of its most common purposes. Much of what can be found in ABA’s best practices guide is already standard operating procedure in many firms. For example, funders staying out of material decisions regarding the cases they fund is typical. Being aware of responsibilities regarding privilege, safe document handling, and the construction of litigation funding agreements are all commonplace. Some have suggested that the recommendations in the guide are too conservative and do not factor in current trends or commercial realities. For example, the guide cautions against lawyers and funders discussing the viability of a case. It’s outlandish to think such a thing wouldn’t be discussed, or that it would be in any way inappropriate to do so. Investors require information in order to make sound investment decisions, and the merits of a case are certainly relevant to that. One thing the ABA guide does well is differentiate the different types of Litigation Finance currently in use—client funding versus lawyer funding, for example. As the industry adapts to changing circumstances, these distinctions will grow in relevance. It also advises that lawyers presume that litigation funding agreements will be made public. This is not always true, but specific types of arbitration require it. Overall, the guideline recommendations are expected to lend legitimacy to an already entrenched part of the legal world.
Commercial

Key Takeaways from LFJ’s Q3 Roundup on the State of the Commercial Litigation Funding Industry

On Wednesday October 7th, Litigation Finance Journal hosted a quarterly roundup on the major issues impacting the commercial litigation funding industry. The 45-minute panel discussion was moderated by Ed Truant, founder of Slingshot Capital. Panelists included Jim Batson, Senior Investment Manager of Omni Bridgeway, Nick Pontt, Managing Director of Affiniti Finance, Mick Smith, founder of Almatura, and Paul Haskel, partner at Richards, Kibbe & Orbe, LLP. Below are some key takeaways from the event: Ed Truant: On the issue of Burford's dual listing, is this about providing the US market with an option to invest in litigation finance, with the benefit of improving Burford’s stock price, post-Muddy Waters? And given the Muddy Waters issue, is a dual listing in the more litigious US market a good move? Paul Haskel: I should say first that I don’t represent Burford and I have not spoken to anyone at Burford about this. I think my view is that in some sense this is a response to the Muddy Waters short selling incident that occurred to them. I guess in the fall or the spring, that as a retort to Muddy Waters, they’re saying we’re going to be transparent, we’re going to be much more transparent than we’ve been historically. No more sort of black boxes which is what Muddy Waters has complained about. And we’re going to be very open, we’re going to have quarterly SEC filings, far beyond what was required by them for their AIM listing. Part of it may also be a marketing ploy, so it may be that customers looking for funding, many of which, may feel more comfortable coming from a public company that’s subject to public disclosure. Obviously, it provides liquidity to their investors, but I do point out that it also provides liquidity to short sellers as well, which is interesting. Mick Smith: Like Paul, I haven’t had the inside scoop from anyone at Burford about what was driving the listing, but in my experience you’ve got to go to the US market because it’s probably the deepest capital market around. So you have to assume that Chris is seeking a US listing because it gives them access to more capital and they’ve always been interested in raising money from different pools of capital, so this seems like a logical extension to the biggest capital market of all.  Ed Truant: IMF Bentham at the time, made a big acquisition of Omni Bridgeway, and so probably no one better suited to this question than Jim. Jim, maybe you can give us some insights in terms of the strategic compulsion to do the acquisition. How has the acquisition benefitted formerly IMF, now Omni more broadly, and have there been benefits both ways to this merger?  Jim Batson: We really do view it as a merger whether or not it’s technically considered an acquisition. Yes, the first obvious benefit was the geographic scope that the company now has, so with the merger we have 18 offices in 10 different countries. And if you think about how litigation has gotten so global, and the litigation finance industry really needs to adapt to that. We want to be able to serve corporations that are international in scope and also law firms in the same respect, but also when we’re working with corporations that have offices in multiple jurisdictions, the lay of the land in each particular region is different. And being sensitive to that, we’re doing more than just providing a single product and providing it globally, but rather we're able to provide litigation finance solutions in all these different regions that have very unique attributes. The class action regime in Australia is very different from that in the US, and yet we support it very heavily in Australia and through law firm portfolios here in the US. By the same token, we’ve got offices now in Singapore and Hong Kong, where international arbitration is becoming more and more popular and readily accepted, and litigation finance is becoming readily accepted in the international arbitration sphere.  The second sort of big picture benefit that it provided was giving us a comprehensive beginning-to-end support for litigants and lawyers and corporations in the litigation finance sphere. Ed Truant: What about the surging demand for portfolio funding? Paul, is that something you’ve noticed in the marketplace as COVID struck? Paul Haskel: Will there be litigation specifically related to COVID? I’m not sure we’ve seen a flood of business interruption insurance or business interruption litigation yet. But I do think that law firms have become increasingly accepting of litigation finance as being a source of not just financing but actually their ability to get more work, because it’s just generally becoming more accepted. And I think the fear of COVID and the slowdown has driven many firms to seek that type of financing, and where previously they had contingency work, were comfortable just simply waiting to get paid, they’re seeing an advantage of accelerating that capitalization from that work. So I do think there’s been increased demand from law firms that we’re seeing. I also am seeing a trend where some of the big New York corporate firms, which traditionally might have stayed away from this type of arrangement, have started doing a little more contingency work to boost profits, so that does lend itself to litigation financing. So yes, it’s definitely a trend we’re seeing in the market. Ed Truant: From the panelists perspective, what do you think should be the first course of action for the ILFA? Jim Baston: It’s really not so much that litigation funders have been objecting to regulation as a concept. The problem has been more, ‘Who’s supporting it?’ and ‘What type of regulation are we talking about?’ and so forth. I’ve always thought it was ironic that the Chamber of Commerce purports to want to increase regulation and to minimize the use of litigation finance, when at the end of the day, some of their members are the biggest users of litigation finance—and it really is to the detriment of the smaller companies. Paul: I think it’s a great idea, the ILFA. It is an industry that is unregulated, trying to prevent regulation. It has a “bad reputation” among some, and I think the need to have an organization that can lobby for the asset class, be an advocate for the asset class, perhaps come up with best practices and codes of conduct to prevent outside regulation and to work with regulators which I think is a great step.
Announcements Commercial

Apex Litigation Finance brings Artificial Intelligence development in-house to drive funding activity and further promote access to justice

Apex Litigation Finance (Apex) has today announced that it has cemented its position in the legal technology space by bringing its Artificial Intelligence (AI) capacity inhouse, building on an already innovative approach to case outcome predictive analytics. The deployment of AI is enabling the company to speed up the delivery of litigation funding to its client base of solicitors, liquidators, individuals and corporates. Apex now have the means to fully control the development of AI technology to meet evolving requirements. The company believe this will greatly enhance the predictive analysis of risks and outcomes and increase its success in selecting which cases to fund. The move to in-house technology follows a successful relationship with legal AI specialist CourtQuant, which saw Apex fully test and scope the capacity of AI tools in the litigation funding space. The inhouse solution will build on this experience and expertise, whilst creating value for Apex by building a best in class database The AI development will be supervised by project manager Lukas Ruttkay, who brings extensive experience of tech project leadership and AI development to the company, having brought three successful online ventures to market. Commenting on the move, Maurice Power, Apex CEO, said: “We are excited to bring the AI inhouse. Our development of AI will further inform our decision making, offer greater value funding solutions to clients, and provide comfort for investors. I am confident this capability will ensure that Apex maintains its position as a market leader in the sector.” Apex specialises in providing funding for small to medium-sized matters where litigants may not have the means to pursue meritorious claims. Legal and other costs associated with a claim are funded, in return for an agreed share of any successful outcome. If there is no recovery, or if the claim is lost, there is nothing to repay as Apex offers non-recourse funding, taking on all the risk to protect claimants. About Apex Litigation Funding Apex Litigation Finance Limited brings together experts from the legal, technology 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. As a professional litigation funder, Apex makes available funds to pay legal and other costs associated with a claim in return for an agreed share of any successful return. If the claim is lost, there is nothing to repay. The process is augmented by artificial intelligence systems to assess risk. Apex’s service addresses the issue of claims, that may have merits, not proceeding due to uncertainty over costs and the potential risk of being ordered to pay the defendant’s cost, should the claim be unsuccessful. Apex promotes its service as enabling access to justice for all, not just those with deep pockets.
Commercial

Legal Finance as a Path to Corporate Trust Recovery

The rise in bankruptcies and business insolvencies due to COVID cannot be denied. One side effect of this involves the exploration of how best to facilitate recovery and refinancing. Ultimately, legal funding may provide the best risk/reward ratio. Burford Capital’s recent roundtable discussion parses out how these developments are affecting the industry. With regard to bankruptcy litigation, it’s clear that all parties are growing more assertive in protecting their interests. This means assets are being locked down sooner, and assets that should go to creditors are being siphoned. The increase in bankruptcy litigation also means an increase in the use of Litigation Finance. In the context of bankruptcy, legal finance is straightforward. A funder pays the legal fees and expenses associated with the case. If the case ends favorably, the funder would be refunded along with an agreed-upon percentage of the recovery. If the case isn’t successful, the non-recourse nature of funding means they lose their investment. Can legal finance be used as a business development tool? Legal funding for bankruptcy offers a viable alternative to contingency arrangements. This gives trustees more freedom in selecting bankruptcy lawyers without having to dip into estate funds. Some would say that trustees now have an obligation to investigate legal finance options in their cases. Part of acting in the best interest of creditors is to make the savviest financial decisions. In many cases, legal finance is more cost-effective than hiring counsel on a contingency basis, and can offer a tactical advantage, as it displays to the opposition that the claimants are financially capable of seeing a case to completion.
Commercial

IAG Class Action Settlement Tops $138 Million

A settlement in the IAG class action is currently under review after preliminary hearings. The proposed $138 million settlement comes after the company was ordered by ASIC to refund customers for add-on products that were essentially without value. Insurance News explains that the class action was brought regarding six add-on products impacting 673,000 unique transactions by hundreds of thousands of policyholders. Last year, IAG asserted that the case could involve sums of up to a billion dollars during a hearing on the litigation funding arrangements. Balance Legal Capital funded the action, which ultimately allowed litigants to recoup much of their financial losses.
Commercial

Litigation Funding Opportunities are Here to Stay

It’s no secret that when the economy is tough, litigation increases. As the CEO of LexShares, Jay Greenberg, explains--even those who don’t normally use litigation funding are reaching out. Businesses are more anxious than ever to collateralize existing lawsuits and take steps to ensure that any impending claims can be litigated effectively. Alpha Week details that both investor interest in litigation funding and inquiries by potential plaintiffs are on the rise. Earlier this year, the market saw drops in both bonds and equities, yet investments in litigation funding were unaffected, as they only correlate to cases. At the same time, the ROI of lit fin is dependent on making savvy choices backed up by solid underwriting and extensive legal expertise. Former litigators often make the most effective underwriters, as they have the most intricate understanding of the legal process and are best able to parse the risks inherent to a given case. Ideally, an investment in litigation finance requires vetting the merits of each individual case, and/or taking on a diverse array of cases that ultimately diversify risk. Jay Greenberg details that while litigation funding has gained traction during COVID, the opportunities it presents aren’t going anywhere any time soon. While public data isn’t made available on funding overall, the filing of new commercial cases was down from last year. This may mean that litigation funding has barely made a dent thus far—and that opportunities for funding are only expected to rise.
Announcements Consumer

Multi Funding Is Named Preferred Litigation Finance Provider for Total Trial Solutions

Woodstock, NY—October 6, 2020 —Multi Funding, a leading provider of pre-settlement funding serving law firms and attorneys, has been selected as the preferred litigation funding partner for Total Trial Solutions. A provider of comprehensive litigation support services, Total Trial Solutions will offer Multi Funding’s cloud-based litigation finance services to its extensive client base of law firms and attorneys across the United States. Headquartered in Woodstock, New York, and with an office in Lynbrook, New York, Multi Funding offers the legal community proven, fast, and reliable pre-settlement and other litigation financing solutions. Established in 2007, Multi Funding is recognized by its clients for maintaining a high standard of excellence, and is one of the few providers in the industry to earn coveted NMLS (Nationwide Mortgage Licensing System) certification. Through its advanced technology, attorneys can easily apply for litigation financing on Multi Funding’s secure website. Within minutes, attorneys can leverage the company’s full capabilities, such as automated workflows, instant notifications, document management, reporting, and funding updates. Multi Funding eliminates the manual tasks associated with funding, and provides litigants with much needed financial resources during the pre-settlement phase of their trials. In many instances, Multi Funding’s resources can change the trajectory of a case by giving plaintiffs the leverage to weather the longer negotiation periods that are often required to maximize results. “We are very pleased to partner with Total Trial Solutions and bring Multi Funding’s proven services to its network of law firms and practitioners. These attorneys recognize that access to pre-settlement funding can make the difference between accepting a quick, diminished settlement or pursuing a case to full value,” explained Michelle Fuoco, Multi Funding’s chief financial officer. “We are confident that the organizations that access our services through Total Trial Solutions will be very pleased with their results.” Based in Kingston, New York, Total Trial Solutions has provided resources for 8,000 cases, and has helped attorneys recover hundreds of millions of dollars for their clients. The company provides a wide range of litigation support services to attorneys pursuing judgements in civil cases. These services include focus groups, jury analysis, forensic animations, medical illustrations, video production, forensic biographies, and expert matching and vetting. “Giving our attorney partners access to fast litigation expense funding in a reliable and secure environment will be extremely well received. Savvy attorneys will realize that financial support during the often-lengthy pre-trial process can change the entire complexion of a case and allow them to significantly drive up the value for their clients while conserving their own out of pocket case flow,” said Michael Earner, Esq., president and chief  executive officer of Total Trial Solutions. “We’re proud to work with Multi Funding, which has a proven track record, as well as the resources and technology to fund a broad array of cases. Our partnership with Multi Funding will absolutely enable attorneys to produce better outcomes for their clients.” About Multi Funding Headquartered in Woodstock, New York, and with an office in Lynbrook, New York, Multi Funding is a major provider of specialized legal funding, attorney funding, and law firm funding services. With decades of lawsuit funding, business, and legal experience, the company’s founders have made it their focus to provide simple and fast services while maintaining a high standard of excellence. Multi Funding has provided millions of dollars of legal funding to plaintiffs and attorneys across the United States. www.multifundingusa.com
Announcements Commercial

Tetragon Financial Group Limited To Pursue Litigation Finance Venture with Brandon Baer

Tetragon and its diversified alternative asset management business, TFG Asset Management, have entered into an agreement with Brandon Baer to invest in his newly-created company, Contingency Capital, a multi-product global asset management business that will sponsor and manage litigation finance related investment funds.  Contingency Capital will have its formal launch on 1 November 2020. Mr. Baer formerly worked at Fortress Investment Group where he was a Partner and Managing Director in the Credit Funds business.  He was also the Co-Founder and Co-Head of its Legal Assets group. TFG Asset Management will receive a significant minority equity interest in Contingency Capital and Tetragon will provide Contingency Capital with, among other things, working capital and a $50 million commitment to Contingency Capital's first commingled investment fund, with Tetragon retaining the option to invest further amounts.  TFG Asset Management, which owns majority and minority private equity stakes in asset management companies, will also provide Contingency Capital with operating infrastructure – encompassing critical business management functions such as risk management, investor relations, financial control, technology and compliance/legal matters. Fortress and Contingency Capital have entered into co-investment arrangements pursuant to which Fortress may invest up to $500 million in Contingency Capital's opportunities.  Contingency Capital has also entered into arrangements with a large fixed income asset manager relating to up to $900 million of additional co-investment opportunities. Reade Griffith, a Founder of Tetragon's investment manager and the Chief Investment Officer of TFG Asset Management, commented: "We think there are significant opportunities in litigation finance related investing, and gaining exposure to this asset class is very appealing.  We are also particularly excited to partner with Brandon, who is a leader in the space with extensive experience."  Stephen Prince, the Head of TFG Asset Management, noted: "We believe Brandon continues our efforts of partnering with exceptional asset managers." "I am excited to partner with Tetragon and its asset management platform," said Mr. Baer.  "The Contingency Capital business seeks to provide access to high-quality litigation finance assets in an increasingly expanding market.  Our focus will be on investments whose primary outcomes are driven by legal, tax or regulatory processes and are intended to be generally uncorrelated to the markets.  I am also pleased to be able to continue collaborating with Fortress, where I spent almost a decade focused on credit and legal assets." "As a significant shareholder in Tetragon and one of the largest investors in legal assets globally, Fortress is very excited to work with Tetragon and Brandon on this new opportunity," said Jack Neumark, Head of Legal Assets at Fortress.  "We have a long history of providing capital in a variety of forms to litigation finance platforms and we believe the co-investment arrangements with Contingency Capital will be another good partnership for us in this asset class."
 About Tetragon: Tetragon is a closed-ended investment company that invests in a broad range of assets, including public and private equities and credit (including distressed securities and structured credit), convertible bonds, real estate, venture capital, infrastructure, bank loans and TFG Asset Management, a diversified alternative asset management business. Where appropriate, through TFG Asset Management, Tetragon seeks to own all, or a portion, of asset management companies with which it invests in order to enhance the returns achieved on its capital. Tetragon's investment objective is to generate distributable income and capital appreciation.  It aims to provide stable returns to investors across various credit, equity, interest rate, inflation and real estate cycles.  The company is traded on Euronext in Amsterdam N.V. and on the Specialist Fund Segment of the main market of the London Stock Exchange.  For more information please visit the company's website at www.tetragoninv.com.