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Commercial

Nigerian Oil Skirmish Continues as Eni and Shell Ramp Up Attacks

A case between the Nigerian government and oil giants Eni And Shell is still underway. The issue is OPL245, and an allegedly corrupt deal made in 2011. While everyone involved maintains that their actions were legal, prosecutor Fabio de Pasquale and the Federal Republic of Nigeria are looking to prove otherwise. Finance Uncovered details that time is of the essence. Eni and Shell hold a prospecting license that is due to expire in May 2021. To expedite things, Eni has made an issue of Nigeria’s acceptance of funding from Drumcliffe Partners, a litigation funder based on Delaware. A leak of the funding agreement suggests that the government lacked transparency in not making the agreement public sooner—even though they are not obligated to do so. Eni has suggested that the funding agreement indicates ‘undisclosed interests’ which may be a throwback to outdated champerty laws. Eni’s tactic has been called an attempt at delegitimizing the Nigerian government’s claim. It seems unlikely that a court would conflict out a funder at such a late point in the case—some have speculated that Eni may be setting up grounds for appeal. Meanwhile, Drumcliffe has maintained that there is nothing untoward happening. Meanwhile, Eni accuses the Nigerian government of stonewalling efforts to convert OPL245 into an OML while threatening international arbitration. But is Nigeria obligated to do their bidding simply because a known money-launderer said so? Reports indicate that a dispute resolution consultant was hired in June of this year—though no one has said whether or not talks are actually underway. Should the parties manage to settle out of court, criminal sanctions could still be on the table for both energy giants. It might, however, stave off the ticking clock that threatens to lose them the rights altogether. A lot is riding on Eni’s efforts to wear down the Nigerians.
Commercial

Do Aussie Insurance Rate Increases Foretell the Same in the US?

Commercial trucking insurance rates have climbed steadily over the last decade. Despite price hikes, the industry has underperformed for the last nine straight years. The problem? According to some, Litigation Finance coupled with ‘nuclear verdicts’ is helping losses far outpace profits. Fleet Owner explains that commercial fleets are seeing rate increases as high as 300%. Ryan Erickson, EVP at insurance brokerage McGriff, Seibels & Williams, stated that the lack of profits leads to increased difficulty in any attempt to turn the market. Litigation Finance is touted as being a central reason for rising insurance rates. While it is true that third-party funding does lead to more cases—it’s not reasonable to paint the pursuit of justice as a negative. Litigation funders don’t invent cases. They empower citizens who have been wronged with an ability to have their day in court. Sometimes this leads to high awards, and sometimes it doesn’t. As litigation funding is offered on a non-recourse basis, funders are taking a substantial risk when they bankroll legal actions. In the wake of insurance industry struggles, tort reform is sometimes suggested. But will that have an impact? Tort reforms are meant to cut down on frivolous actions, which is not something funders are interested in. Funders are looking to fund cases with merit, for reasons financial and ethical. Australian government officials have been taking steps to restrict and regulate the use of Litigation Finance. Around the world, it seems like countries are taking sides on the practice. Singapore, for example, has introduced legislation more welcoming to the practice. Can the US expect similar changes in regulation? Possibly. With industry opinions forming on many sides of the issue, we would all do well to keep an eye on how increased regulation may impact Litigation Finance in the future.
Commercial

California Bar Opinion May Supersede ABA Recommendations

A recently released California State Bar opinion on ethics is likely to hold sway in the legal world despite differing markedly from the NYC Bar and ABA recommendations. The opinion covered legal finance and the ethics in utilizing it, and involved multiple rounds of public commentary—including funders like Burford Capital. Bloomberg Law details that California, as the second-largest community of legal professionals in the US, felt that the existing guidelines were lacking. But like the ABA guidelines, the California opinion is merely a suggestion and does not indicate new law. First, the opinion affirms that a lawyer’s duty is to the client, first and foremost. Funders absolutely do not control litigation, strategy, settlements, or any other decision-making. Lawyers are required to provide competent advice and are encouraged to educate themselves on litigation funding. Burford Capital has stated that nearly 80% of in-house counsel believe the firms they work with should provide basic information about legal funding. As to the champerty question, the California opinion affirms that champerty law does not apply and that Litigation Finance is a legal and ethical practice. Champerty, or funding a suit in return for financial gain from the outcome, is a medieval term that has been largely dismissed. Litigation Finance continues to grow and evolve as its popularity increases. The California opinion is one more way to add transparency and consistency to the industry.
Commercial Covid-19

Former Vannin MD Scott Mozarsky Talks Legal Tech During COVID

As the COVID pandemic continues to impact every area of business, legal professionals are finding ways to transition, diversify, and combat the challenges that face them. Legal tech in particular has had to adapt to the pandemic with lighting speed—with firms forced to discover new means of remote working, virtual meetings, and paperless filing.   ABA journal speaks with Scott Mozarsky, managing director with the Jordan, Edmiston Group Inc, about potential lasting impacts of COVID. After some remarks about his career, which included a stint in Vannin Capital's NY office, Mozarsky explains that the legal tech market has become increasingly active within the last few years. Mergers and acquisitions were up, though deals tended to take longer. There’s also been a shift in managing styles at larger law firms, which are now run according to standard business principles.   Investors are attracted by a solid business foundation and strong management teams with an eye on the future. Legal tech, Mozarsky explains, is coming into its own after spending years under the shadow of finance technology. Firms are using data and analytics to attract and grow client relationships. They’re also connecting on Zoom, sharing documents via virtual drives, and some are holding socially distanced meetings responsibly. The interview affirms that some changes adopted during COVID are likely to stay in place. These include online engagement and collaboration, virtual meetings, cutting down on office space, utilizing cloud services, and encouraging remote working. Currently, most courts are experiencing a backlog of cases and are using remote working tech to catch up. Ultimately, Mozarsky concluded that the future promises an expansion of legal tech, backed by investors and interest in the legal community. As the legal markets grow with the predicted spikes in litigation, avenues for legal and financial partnerships are on the rise.
Commercial

Australian Arbitration Week 2020

How exactly is international arbitration changing? The International Arbitration Conference set out to answer that very question. This year’s conference shined a light on how Australia became a favored destination for funded arbitrations around the globe. Omni Bridgeway participated in the event, which was held virtually. One hot topic was how third-party funding is changing international arbitration. In Australia, for example, the government has enacted legislation viewed as too restrictive by some funders. But in Singapore or Hong Kong, rules governing third-party funding have been welcoming to the practice. This lack of uniformity around the world has led to confusion, sometimes leaving meritorious cases unfunded. Other issues discussed included conflicts of interest and disclosure. Increasingly, new legislation requires disclosure of at least some aspects of litigation funding agreements. Some say that increased disclosure will reduce the appearance of conflicts of interest. ACICA Rule 53 is of particular interest because it includes the costs of obtaining legal funding as a recoverable expense. This rule would be especially impactful in Australia, where large class actions against big businesses are common. Cost was another hot topic. Specifically, how legal funding impacts security-for-cost orders. Also discussed was the changing relationships between contingency, conditional fee arrangements, and funding. This included portfolio arrangements and different ways to share risk. This led to a discussion of the newly-formed ILFA, and its push for greater transparency in the industry. Other topics included diversity in the industry, specifically the Arbitral Women diversity initiative. This Brisbane-based group publishes news, facts, and statistics, while engaging in various online diversity initiatives. The ‘Equal Representation in Arbitration’ pledge is a call-to-action and rallying cry. Soon, it will also be a set of guidelines to help corporates and firms pursue diversity in a productive way.
Commercial

Burford Launches on the NYSE

Burford Capital is turning heads with its newly-minted listing on the New York Stock Exchange. This NYSE listing is the first of its kind for a Litigation Funding firm. Business Insider explains that the NYSE listing is a clear sign that this type of legal funding has entered mainstream consciousness. It cements the industry as one that’s here to stay, rather than a temporary fix for trying economic times. Burford specializes in funding legal action against large corporations in exchange for a share of any reward. This type of third-party funding is offered on a non-recourse basis, allowing for different rules than are applied to traditional loans.
Commercial

Work Product Ruling Stymies Google’s Request to See Funding Contract

A California judge ruled this week that a litigation funding agreement between Impact Engine Inc and an unnamed funder is work product and therefore protected by privilege.  Law.com explains that concerns over the relevance of the agreement to a patent infringement suit against Google have been raised by lawyers at Quinn Emanuel. Judge Cathy Ann Bencivengo agreed that the funding agreement may have some impact on the case. This stands true even though Impact Engine’s lawyers did share information with the funders, work-product privilege was never waived. Bencivengo explained that the documents show an expectation from both parties that the information contained would not be released. This case could have far-reaching implications for litigation funders. Rules regarding disclosure remain vague.
Commercial

Africa’s Largest Class Action Targets Anglo American

A case representing roughly 100,000 women and children targets African mining company Anglo American. With litigation funding provided by Augusta Ventures, the case will pursue claims that those living near the Kabwe lead mines were poisoned. Law.com details that South African firm Mbuyisa Moleele and international firm Leigh Day brought the suit against the Anglo American subsidiary, Anglo American South Africa. Those impacted are seeking that the toxic land be cleaned up, that medical screening of children and pregnant women is funded, and financial remuneration. One lawyer involved with the case referred to the situation as an ‘ongoing public health disaster’ brought about by ‘flagrant disregard’ for the community. 
Commercial

Therium Access Named Finalist for ‘Best Pro Bono Initiative’ by The Lawyer Magazine

Therium Access has been named a finalist for ‘best pro bono initiative’ by The Lawyer. The program was launched to provide increased access to justice through investment—providing needed capital to the most vulnerable. Founded in 2009, Therium began as a funder who worked with clients pursuing cases against commercial businesses. It soon became obvious, however, that there were many clients in need of help even though their cases were not against businesses with deep pockets. Co-founder Neil Purslow explains succinctly, “Justice should be available to everyone, but the reality is that it isn’t. This can lead to devastating consequences for families and for the most vulnerable in our society.” He goes on to explain that while lawyers often donate their time, monetary support is also needed to pursue cases—especially those that are large and time-consuming.