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Consumer

West Virginia Basically Outlaws Consumer Legal Funding

After the state of West Virginia amended article 6N of its Consumer Credit and Protection Act this past summer, the litigation funding industry has essentially been prevented from operating in the state. And that's exactly what industry opponents were hoping for. According to JD Supra, West Virginia's amendment only applies to funding towards individuals, not to commercial entities (that's in contrast to some other states' funding regulations, such as Wisconsin's, which appear to apply more broadly). The amended article now regulates both the funders themselves and their funding contracts. Key provisions include: the requirement for funders to register in the state and remain 'in good standing,' a prohibition on paying the consumer's attorney any fee or commission, a prohibition on assigning funding contracts (with some exceptions), a mandate that funding contracts be completely filled in when presented to the consumer and contain certain disclosure language, a prohibition against mandatory arbitration, and perhaps most importantly - a rate cap of 18% with no more than semi-annual compounded fees. That last provision is what essentially prevents the industry from operating in the state, since roughly 10% of all funding investments are lost due to the case being dismissed or lost at trial (funding is non-recourse, so if the consumer doesn't win a payout or settle, the funding company gets nothing). Plus, the penalties for violation are harsh. Any violation renders the funding agreement null and void, and should the funder litigate the enforcement of a contract in court and lose, they may be on the hook for the counterparty's attorney fees. All of this is a clear signal to the industry by the state of West Virginia: Go away. And as the Alliance for Responsible Consumer Legal Funding points out, that is exactly what has happened.
Announcements Consumer

U.S. Claims Makes Further Inroads into $250B Market

DELRAY BEACH, Fla., Nov. 5, 2019 /PRNewswire/ -- DRB Financial Solutions, LLC (DRBfinancial.com), and its wholly-owned subsidiary U.S. Claims (USClaims.com), America's premier pre-settlement funding company, today announced that U.S. Claims has closed on yet another private placement transaction.  This marks the company's second litigation advance backed transaction of the year and DRB Financial's fourth term securitization transaction involving this asset class overall.  It primes U.S. Claims to continue its run of impressive growth.

DRB Financial's Senior Vice President and Head of Capital Markets, Jason Sutherland, commented, "We are very pleased with the market's response to this new and rapidly growing asset class.  In each of our four-term transactions, we have achieved improved execution in terms of advance rate and credit spreads."  He continued, "We hope to issue 2-3 such term deals per year as we continue to expand the origination and servicing platform."

Donna Lee Jones, the President of U.S. Claims, added, "America's tort system presents us with a total addressable market of more than $250 billion per year, and we have barely scratched the surface of this opportunity.  We look forward to helping tort victims through the often arduous litigation process while offering attractively priced investment opportunities to the capital markets."

The pre-settlement funding company, established in 1996, has been consistently voted among the best in the nation.  In 2019 alone, U.S. Claims earned first place rankings by the audiences of national legal publications in several categories, including "Best Consumer Litigation Funding Provider," "Best Law Firm Funding Provider," and the coveted "Hall of Fame" award from The Legal Intelligencer.

About U.S. Claims: U.S. Claims (www.USClaims.com) provides litigation funding for plaintiffs, attorneys, and surgeries.  Its flagship offering is providing non-recourse financial support to personal injury victims, some of whom may have suffered catastrophic injuries from defective products, unsafe premises, motor vehicle accidents, and other types of accidents; this financial support provides the injured plaintiff the means to pay bills and endure the often long and arduous litigation process.

About DRB Financial Solutions, LLC, (DRB) provides liquidity solutions to individuals and small/medium-sized businesses holding high quality but illiquid assets. Having raised over $1 billion in capital and developed a robust origination platform, DRB is a market leader in four major lines of business:  U.S. Claims, CRG Financial, (CRGFinancial.com), DRB Capital (DRBCapital.com) and Producer Advance (ProducerAdvance.com).

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Commercial

Bloomberg Surveys Challenges and Opportunities in Litigation Funding Market

As we turn the corner into 2020, Bloomberg Law analyzes the results of its own Litigation Finance Survey to account for the challenges and opportunities facing the industry at this pivotal moment. As reported in Bloomberg, litigation finance had a wild year in 2019, and there is a lot to digest going into 2020. Bloomberg recently conducted a litigation finance survey, where they found that disclosure is the top concern for attorneys who have obtained or are interested in obtaining funding. Their survey shows that over 50% of attorneys who have done so are uninformed as to how frequently disclosure has been ordered (and in what contexts). Another key concern is accounting methodology. This topic was brought to the forefront in the Burford Capital / Muddy Waters saga, and has since become a hot-button issue in the industry. Burford is one of only a handful of publicly-traded funders, and the largest funder in existence; so to have the company shed nearly 50% of its value in a single day is naturally off-putting for investors and would-be investors into the space. And that brings us to one of the key points of of Bloomberg's survey findings: there is room for industry growth. The survey found that interest in funding outpaces current funding levels. Bloomberg points to Legalist's and Validity's funding rounds as two of the top-10 funding rounds in Legal Tech for 3Q19.
Announcements Commercial

Therium Access announces second round of grant awards to improve access to justice in the UK

Therium Group Holdings Limited, one of the world’s leading providers of litigation, arbitration and specialty legal finance, today announced the second recipients of grant awards by Therium Access, the firm’s not-for-profit arm dedicated to facilitating access to justice. This follows the recent appointment of Lord John Thomas of Cwmgiedd to its Advisory Committee and Jeunesse Mensier as Grant Programme Director.  The recipients of this grant round are: The Child Poverty Action Group:  a grant for the employment of an additional solicitor to build the capacity of their award-winning legal team which conducts strategic litigation to end child poverty; The Bar Human Rights Committee: a grant for the employment of a legal and policy officer to support the Bar’s influential international human rights work; JUSTICE: a grant towards their core costs to support their work which seeks to effect systemic change within the UK justice system by producing in-depth reports and recommendations; Advocate: a grant for the employment of their volunteer manager who facilitates and supports the laudable pro bono efforts of the Bar by representing those who cannot afford legal representation; The Free Representation Unit: a grant for the employment of a legal officer to provide full casework and advocacy in the social security and employment tribunals; National Family Mediation: a grant for the employment of a call handler to provide early advice and arrange mediation for families going through divorce or separation; The Speakeasy Law Centre: a grant for the employment of a new trainee solicitor who will provide legal advice to vulnerable people in the Cardiff area and ultimately qualify as a solicitor with experience in legal aid and social welfare law; Project for Registration of Children as British Citizens: a grant for the employment of a legal administrator and towards their core costs to support the specialist advice and strategic litigation they conduct on complex children’s citizenship issues; and Central England Law Centre: a grant towards their Birmingham centre’s core costs to support the direct advice they provide to local people and to bring strategic litigation cases. In addition, Therium Access has approved grants for two strategic litigation cases. Further information on these grants will follow in due course. Launched in March 2019, Therium Access has committed to providing grants worth a total sum of £900,000 to date. It is anticipated that tens of thousands of people will benefit from these grants, either by receiving direct advice and support or by the strategic litigation conducted by these organisations. Therium Access is the first of its kind initiative in the litigation funding industry. Grants awarded by Therium Access are intended to promote access to justice for those who lack the funds necessary to pursue or defend claims, as well as supporting projects that seek to improve access to justice.  John Byrne, Co-Founder and CEO of Therium Capital Management Limited, said: “We were overwhelmed by the number of worthy applications we received.  It is humbling to see the incredible work that so many organisations are doing every day to support the most vulnerable people in our society. Therium is proud to offer support to a number of these inspirational organisations and we look forward to building even more relationships in the advice sector.” Lord Falconer, Chairman of Therium Access Advisory Committee, said: “These grants demonstrate the depth of the impact Therium Access has. Most of our grants have been made to organisations which provide direct advice to those most in need, but it is also critical to support organisations which seek to challenge, influence or change the law.” About Therium Access Therium Access is the primary expression of Therium’s corporate and social responsibility programme. Therium Access dispenses with the criteria of funding for profit and has the sole purpose of facilitating access to justice.  Therium Access is a mark of Therium’s wider commitment to the pursuit of justice and the rule of law. Therium Access accepts applications from charities and other entities whose services and projects facilitate access to justice or from those seeking assistance to obtain legal representation on cases (including defence) which have strategic importance. The applicant’s need and the impact of the grant will be important factors in our review process. The deadline for the submission of the next round of grant applications is 30 April 2020. In addition, urgent applications may be considered on an ad hoc basis. Applications need to be made by legal representatives or the entity seeking a grant.  The board of Therium Access is assisted by an Advisory Committee which is chaired by Lord Falconer, former Lord Chancellor, Secretary of State for Constitutional Affairs and Secretary of State for Justice. Therium Access aims to support access to justice in the broadest terms and considers applications that further the following causes (in no particular order): The right to legal representation or due process; The proper and efficient administration of justice; The advancement of human rights; The promotion of equality of rights and diversity; The protection of children, the elderly, the disabled, minorities, asylum seekers and other vulnerable or disadvantaged groups; The advancement of environmental protection or improvement; The promotion of legal education that furthers the causes listed above; and any other case or project in which a person, group, or entity will not have access to justice without financial assistance. Therium Access is intended to be a global initiative. Its initial focus is on the UK and it will be rolled out in other jurisdictions in a number of planned phases. About Therium Therium is a leading global provider of litigation and arbitration and specialty legal finance. Over that period, Therium has funded claims with a total value exceeding £34 billion, including many of the largest and most high profile funded cases in the UK.  With investment teams in the UK, USA, Australia, Spain and Norway, Therium has established a track record of success in litigation finance in all forms, including single case litigation and arbitration funding, funding law firms and portfolios of litigation and arbitration claims.  Therium is also a founding member of the Association of Litigation Funders of England and Wales.  Therium Access and its not-for-profit funding is the latest innovation from Therium which has consistently been at the forefront of innovation in litigation finance, pioneering the combined use of insurance tools alongside funding vehicles, and introducing portfolio funding products into the UK.  Therium’s ability to develop innovative funding arrangements and bespoke financial solutions for litigants and law firms complements its unmatched experience and rigorous approach to funding a wide range of commercial disputes throughout the world. Chambers and Partners have ranked Therium as a Tier 1 litigation funder and Neil Purslow, the firm’s Chief Investment Officer, as a leading individual in the litigation funding industry, for the last two years. In February this year, Therium Capital Management was top ranked as one of the two “Leading” litigation and arbitration funding firms in the UK by legal and business directory Leaders League, in their 2019 ranking of litigation funding. Therium was also ranked as “Excellent” in the 2019 US ranking.  www.therium.com  www.theriumaccess.org
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Uncategorized

LPF-Funded $750MM Shareholder Class Action Launched Against New Zealand Insurer CBL

LPF Group is funding a $750MM class action against collapsed New Zealand Insurer CBL, alleging the company directors breached their continuous disclosure obligations, made misleading statements during the IPO, and engaged in insider trading. As reported in Stuff, CBL collapsed in 2018, and now major shareholders, led by investment firm Harbour and Argo Investments Limited, are seeking redress for their financial losses. The company failure was one of the largest at the time in New Zealand corporate history. The claim alleges that the IPO statements were misleading, as they gave the impression that the company had enough in reserves to cover its insurance obligations. The claim also states that company executives failed to properly disclose key financial information post-IPO, and that directors Peter Harris and Alistair Hutchinson sold shares in CBL through companies they controlled, using information not privy to the general public. The now-defunct insurer, which did most of its business in Europe and specialized in new home renovation insurance, cost shareholders hundreds of millions when it went belly-up. Questions are also being asked about the industry regulator, the Reserve Bank, which had suspicions about CBL in 2013, but did not actively pursue an investigation until 2017 due to a lack of resources. CBL's directors are defending themselves against the allegations, and deny any wrongdoing whatsoever.
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Commercial

Hearing Set for RAM Investors in LPF-Funded ANZ Claim

Ross Asset Management (RAM) investors are suing Australia and New Zealand Banking Group (ANZ), alleging that the bank breached its fiduciary duties to investors. The first legal hurdle has emerged, with ANZ filing a 'strike-out' application, asking the court to dismiss the motion entirely. As reported in ShareChat, the underlying claim involves investors in RAM, who allege that the now-defunct investment vehicle swindled them out of millions of dollars. RAM collapsed in 2012 after it was discovered to essentially be a Ponzi scheme. The $450MM under management had been wiped out, with further losses of $100MM on the books. Thus far, only $10MM has been recovered for investors. A claimant pool of 500 investors is suing ANZ for $70MM, in a claim that is funded by New Zealand funder LPF Group. With ANZ's latest application, the likelihood of a court date before 2021 is looking grim. However RAM investor group spokesman John Strahl noted that he'd rather have this application out of the way now, to ensure the court indeed wants to hear this case, than learn much later in the process that the case should be tossed.
Announcements Commercial

Augusta launches Consumer Claims Division with hires from Deloitte, Puma Investments, Prospect Capital and Stevens & Bolton

Augusta, the UK’s largest litigation funder by case volume, today announces the formation of its Consumer Claims Division, with four new hires into the business.

Led by Head of Structured Projects, Ed Yell, new joiners to the team are: Investment Managers Oliver Lawson, Solicitor (joining from Stevens & Bolton), Matthew Pitchers, ACA (joining from Deloitte) and Katherine Woodfine, CFA (joining from Puma Investments) as well as Investment Associate Lewis Davey (joining from Prospect Capital). Max Turner, already with Augusta, will also work with the team.

Louis Young, Managing Director at Augusta, said “I’m delighted to welcome Oliver, Matthew, Katherine and Lewis to the new division that Ed Yell has created. We have seen increasing demand for the funding of both large-scale consumer actions and high volume individual claims, both in the UK and in Europe, and we have responded with investment into specialist expertise to help law firms, claims managers and their clients navigate the compensation terrain on their way to gaining the access to justice that is sorely needed”.

Augusta has recently announced a further $115m fundraising from a multi-billion-dollar US-based investment manager. This follows a £150m fundraising from a global investment fund in 2018, to finance business growth and investment in funding cases.

Augusta has also recently announced hirings into its senior team with the arrival of Proskauer Director Polly Bahl as Chief Operating Officer, FTI Consulting Managing Director Leor Franks as Chief Marketing Officer and Ardonagh Group’s Chief Counsel Frances Coats as General Counsel. These additions reflect Augusta’s ongoing growth and increasing client demand for dispute and litigation funding.

About Augusta:

- Established in 2013, Augusta is the largest litigation and dispute funding institution in the UK by # case. Augusta’s scale enables us to make decisions in market-leading timeframes and fund cases of any size. - Augusta is organised into a series of specialist practice groups: Arbitration, Class Action, Competition, Consumer, Intellectual Property and Litigation, and sectors including Financial Services and Construction & Energy. - By the end of H12019, Augusta had funded 213 claims with a market-leading win ratio of over 80%. - Augusta has offices in London, Sydney, Melbourne and Toronto. - #consumer #litigation #legalservices #investment #privateequity

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Announcements Commercial

Lord Thomas of Cwmgiedd joins the Advisory Committee of Therium Access, which is chaired by Lord Falconer

Jersey, Channel Islands, 29 October 2019. Therium Access, the not-for-profit arm of leading global litigation finance provider Therium, today announced that Lord John Thomas of Cwmgiedd is joining its Advisory Committee. Jeunesse Mensier has also been named Grant Programme Director. Lord Thomas was Lord Chief Justice of England and Wales – the most senior judge in the UK – between 2013 and 2017, and is a life peer. He was born in Wales and read law at Trinity Hall, Cambridge before being called to the Bar in 1969. Lord Thomas commenced practice in commercial law at what is now Essex Court Chambers in 1972 and became Queen’s Counsel in 1984. In 1992, he was appointed by the Department of Trade to inquire into the affairs of the Mirror Group Newspapers when owned by Mr Robert Maxwell. He became a High Court Judge in 1996, became a Lord Justice of Appeal in 2003 and was Senior Presiding Judge of England and Wales from 2003 to 2006. In 2008, he was appointed Vice-President of the Queen’s Bench Division and Deputy Head of Criminal Justice. He succeeded Sir Anthony May as President of the Queen’s Bench Division in 2011 before becoming Lord Chief Justice of England and Wales two years later. More recently, Lord Thomas has been the Chair of the Commission on Justice in Wales tasked with reviewing the Welsh justice system. The Report will be released later this month. Jeunesse Mensier was previously an Investment Officer at Therium, and the change in her role further demonstrates Therium’s commitment to this ground-breaking initiative in the litigation funding industry. Throughout her career, Jeunesse has been committed to access to justice and she will lead the direction of the grant programme as it continues to expand. Therium Access, launched in March this year, awards grants for cases with strategic importance which tackle important or systemic issues, as well as to organisations that seek to improve access to justice. The Advisory Committee is chaired by former Lord Chancellor and Justice Secretary Lord Falconer.  The inaugural recipients of Therium Access grants included The Personal Support Unit, LawWorks, Crosslight Advice and the Suffolk Law Centre. Jeunesse Mensier, Grant Programme Director of Therium Access, said: “To add someone of the calibre and experience of Lord Thomas to our esteemed Advisory Committee is a real privilege. We are currently reviewing over 50 applications received as part of our second grant round, and the next grant recipients will be announced on the 4th of November. We look forward to Lord Thomas’s support and invaluable insights in helping to ensure that Therium Access fulfils its purpose.” Lord Thomas said: “I am delighted to join the Advisory Committee of Therium Access, an important initiative in restoring the right to legal support. The pressure of austerity and legal aid cuts have resulted in a justice system that is unable to protect the rights and serve the interests of its most vulnerable citizens. Access to the courts and the ability to rely on the rule of law form the bedrock of a civilised society.” John Byrne, Co-Founder and CEO of Therium Capital Management Limited, said: “Therium Access is extremely fortunate to have the commitment and enthusiasm of Jeunesse Mensier and a distinguished Advisory Committee, chaired by Lord Falconer, which assesses grant applications from those shut out of the justice system. Adding Lord Thomas to the committee makes an even more formidable team.” About Therium Access Therium Access is the primary expression of Therium’s corporate and social responsibility programme. Therium Access dispenses with the criteria of funding for profit and has the sole purpose of facilitating access to justice.  Therium Access is a mark of Therium’s wider commitment to the pursuit of justice and the rule of law. Therium Access accepts applications from charities and other entities whose services and projects facilitate access to justice or from those seeking assistance to obtain legal representation on cases (including defence) which have a strategic importance. The applicant’s need and the impact of the grant will be important factors in our review process. The deadline for the submission of the next round of grant applications is 30 April 2020. In addition, urgent applications may be considered on an ad hoc basis. Applications need to be made by legal representatives or the entity seeking a grant.  The board of Therium Access is assisted by an Advisory Committee which is chaired by Lord Falconer, former Lord Chancellor, Secretary of State for Constitutional Affairs and Secretary of State for Justice. Therium Access aims to support access to justice in the broadest terms and considers applications that further the following causes (in no particular order): The right to legal representation or due process; The proper and efficient administration of justice; The advancement of human rights; The promotion of equality of rights and diversity; The protection of children, the elderly, the disabled, minorities, asylum seekers and other vulnerable or disadvantaged groups; The advancement of environmental protection or improvement; The promotion of legal education that furthers the causes listed above; and any other case or project in which a person, group, or entity will not have access to justice without financial assistance. Therium Access is intended to be a global initiative. Its initial focus is on the UK and it will be rolled out in other jurisdictions in a number of planned phases. About Therium Therium is a leading global provider of litigation and arbitration and specialty legal finance, active in England and Wales since 2009. Over that period, Therium has funded claims with a total value exceeding £34 billion, including many of the largest and most high profile funded cases in the UK.  With investment teams in the UK, USA, Australia, Spain and Norway, Therium has established a track record of success in litigation finance in all forms, including single case litigation and arbitration funding, funding law firms and portfolios of litigation and arbitration claims.  Therium is also a founding member of the Association of Litigation Funders of England and Wales. Therium Access and its not-for-profit funding is the latest innovation from Therium which has consistently been at the forefront of innovation in litigation finance, pioneering the combined use of insurance tools alongside funding vehicles, and introducing portfolio funding products into the UK.  Therium’s ability to develop innovative funding arrangements and bespoke financial solutions for litigants and law firms complements its unmatched experience and rigorous approach to funding a wide range of commercial disputes throughout the world. Chambers and Partners have ranked Therium as a Tier 1 litigation funder and Neil Purslow, the firm’s Chief Investment Officer, as a leading individual in the litigation funding industry, for the last two years. In February this year, Therium Capital Management was top ranked as one of the two “Leading” litigation and arbitration funding firms in the UK by legal and business directory Leaders League, in their 2019 ranking of litigation funding. Therium was also ranked as “Excellent” in the 2019 US ranking. www.therium.com www.theriumaccess.org
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Announcements Commercial

New research: Lawyers’ use of legal finance is growing—and becoming more sophisticated

October 23, 2019 – Burford Capital, the leading global finance and investment management firm focused on law, today announced the results of its 2019 Legal Finance Report: A Survey of In-House and Law Firm Lawyers. Based on online survey data from 509 in-house and law firm lawyers in the US, UK, Canada and Australia, as well as in-depth phone interviews conducted with 32 leading lawyers across seven countries, the report reveals that legal finance is continuing to grow in use and sophistication, with lawyers predicting still more use in the event of a recession. Christopher Bogart, Burford’s CEO, commented: “What stands out about the findings is that lawyers not only expect their companies and firms to use legal finance but also are becoming more discerning in how they do so—whether that means funded recovery programs or high-value monetizations for in-house lawyers, or a proactive use of finance as a new business and client retention tool for law firms.” He continued: “This reflects the tremendous evolution of the category Burford led in our first decade, and we are of course gratified that the research also shows how much experience and track record matter to lawyers in their choice of legal finance provider.” Key findings from the research include: Awareness and use of legal finance continue to grow
  • 69.2% of lawyers are “very familiar” with legal finance, up from 50.3% in 2018.
  • 73.9% of lawyers see legal finance as growing and increasingly important.
  • 80.0% of lawyers agree that legal finance is an essential law firm new business tool.
Lawyers are becoming more sophisticated in their use of legal finance
  • The #1 factor cited by lawyers in choosing a legal finance provider is “expertise/track record” (45.6%), and the least is “cost of capital” (33.3%).
  • 3 out of 4 lawyers (74.8%) cite as a very important/important benefit that legal finance allows their businesses to invest in growth and “use capital efficiently”.
  • In interviews, Burford was the first or only legal finance company named by 91.0% of lawyers who were able to name any providers of legal finance unprompted.
Companies leave millions in claim value on the table 
  • 72.0% of in-house lawyers say their companies have failed to pursue meritorious legal claims for fear of adversely impacting the bottom line.
  • In interviews, half of in-house lawyers note that their companies have recovery programs.
Lawyers agree that legal finance is accepted and ethical
  • 72.1% of lawyers agree that “discovery and professional conduct rules adequately address issues raised by the presence of legal finance”.
  • 68.6% of lawyers agree that “most lawyers support litigation finance; its opponents are a vocal minority who exploit unjustified fears about its use”.
Use is predicted to increase should the economy worsen
  • 67.1% of lawyers regard as an “important” or “very important” benefit of legal finance that it allows their companies and firms to “recession-proof” legal budgets.
  • 69.5% of lawyers will push for legal finance in the event of a recession, and in-house lawyers will be even more likely to advocate for the tool.
The full 2019 Legal Finance Report: A Survey of In-House and Law Firm Lawyers is available on Burford’s web site and will be discussed in two upcoming webcasts; see Burford’s event calendar for details.

Contact

Liz Bigham, Burford Capital, 646-763-6163, lbigham@burfordcapital.com

About Burford Capital

Burford Capital is the leading global finance and investment management firm focused on law. Its businesses include litigation finance and risk management, asset recovery and a wide range of legal finance and advisory activities. Burford is publicly traded on the London Stock Exchange, and it works with law firms and clients around the world from its principal offices in New York, London, Chicago, Washington, Singapore and Sydney. For more information about Burford: www.burfordcapital.com.
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