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Commercial

Kirkland & Ellis Launches Contingency-Only Plaintiff-Side Practice

Kirkland & Ellis - the nation's largest law firm by gross revenue - has announced plans to expand its contingency-fee practice with the launch of a division that focuses on the high risk/reward fee arrangement. Kirkland has represented over 100 plaintiff-side cases on a pure contingency basis over the past decade, and now seeks to expand that number by as much as 10x. As reported in Big Law Business, the move by Kirkland comes as the firm has produced significant wins on its contingency-only business model. Just last month, the law firm secured an $82MM verdict for Bracket Holding Corp. in a pure contingency claim. Kirkland - which until now has been mostly focused on defense - is following in Quinn Emanuel's footsteps of pursuing pure contingency fee claims. The class action specialist won over $30 billion in lawsuits by suing big banks in the wake of The Great Recession. Kirkland also hasn't been shy about partnering with litigation funders. In 2015, Kirkland represented Miller UK, an equipment manufacturer suing Caterpillar Inc. in an IP claim over a piece of machinery. Miller UK leveraged litigation funding from Arena Consulting, and eventually scored a $75MM award thanks to Kirkland and Arena's participation. Of course, Kirkland's latest announcement places the firm in direct competition with litigation funders. At least on paper. Should Kirkland overstretch itself (as can happen if cases drag on longer than expected), the law firm may soon turn to litigation funders for what essentially amounts to bridge financing, or perhaps a secondaries market.
The LFJ Podcast
Hosted By Linda Fitz-Alan |
In this episode, we sit down with Linda Fitz-Alan of the Abu Dabi Global Market Courts. Linda discusses the recent Litigation Funding Rules which the court has adopted, how the ADGM went about developing the rules, and how their implementation is expected to impact the broader funding climate in the region. [podcast_episode episode="4082" content="title,player,details"]
Consumer Special Features

What Does it Mean to Live Paycheck to Paycheck?

The following was contributed by Eric Schuller, President of the Alliance for Responsible Consumer Legal Funding (ARC).  According to Investopedia: “Paycheck to paycheck is an expression used to describe an individual who would be unable to meet financial obligations if unemployed because his or her salary is predominantly devoted to expenses. Persons subsisting paycheck to paycheck have limited or no savings and are at greater financial risk if suddenly unemployed than individuals who have amassed a cushion of savings.” According to Forbes, 78% of workers are living paycheck to paycheck. That statistic encapsulates more than just hourly workers. Investopedia states that 25% of American families making $150,000 or more a year live paycheck to paycheck. So what happens when that paycheck gets interrupted and bills don’t get paid? Answer: consumers fall behind on their mortgage, rent, and credit card payments. As a result, credit scores suffer and the financial spiral grows more severe. A recent article published by The Center for the New Middle Class classified ‘loss of income’ as the number one reason credit scores go down. For consumers who have suffered a loss of income due to a car accident or other personal injury legal claim, a solution exists: Consumer Legal Funding. Consumer Legal Funding acts as a bridge for consumers to solve their financial dilemmas while waiting for their legal claim to make its way through the system. There are no credit checks, there are no periodic payments while the case makes its way through the legal system. Consumers only have to meet their obligation to the funding company when and if their case settles and only if there is sufficient funds to meet the commitment. Consumer Legal Funding is not a loan, as it does not have an absolute certainty of repayment. Consumers only have to meet their financial commitment to the funding company when and if they are successful in their legal claim. Therefore, the product is not a loan. It is an opportunity for consumers to sell off a portion of their legal claim (a future asset) as an investment. Like any investment, when consumers look to take advantage of Consumer Legal Funding, they should be fully aware of the cost associated, and the terms and conditions of the contract. Consumer Legal Funding is a financial transaction that is designed to fill in the gap due to the loss of one’s paycheck as a result of circumstances beyond their control. It is designed to help consumers get the fair and just settlement they deserve, and not be forced into accepting a low-ball settlement offer just because they are living paycheck to paycheck.
Announcements Commercial

Pinsent Masons Agrees to £25M Litigation Funding Facility with Augusta

International law firm Pinsent Masons has agreed an innovative £25m litigation funding facility with the UK’s largest* litigation and disputes funder Augusta Ventures. The unique arrangement offers clients the benefit of a dedicated facility at preferred rates, including a fast-tracked due diligence process and transparent commercial terms.

Under the fair and transparent terms of the agreement, Augusta will fund the entire cost of pursuing the claim, including all lawyer and expert fees and any other costs. The arrangement is "non-recourse" meaning the claimants pay nothing if the claim fails.  Augusta only recovers its costs and fees from sums received from the Defendant or any other paying party.

Mark Roe, leading on Third Party Funding for Pinsent Masons, comments on the driver for the agreement:

"We know that the costs of pursuing a justified claim often deter our clients from obtaining justice and recovering money due to them.  Often, even if clients have funds available, they prefer to invest them in their business rather than in pursuing claims.  We wanted to address that problem.  I believe our arrangement with Augusta will provide Third Party Funding to our clients efficiently, quickly, on clear terms and at lower cost.  We've been able to negotiate considerably better terms than our clients would typically receive from Funders if we or they made an individual approach to the market."

Augusta Managing Director, Louis Young, said:

“We’re delighted to be working with top international firm Pinsent Masons on funding litigation and disputes for their clients. Augusta has built a market leading team and process for enabling access to justice, and we are looking forward to helping Pinsent Masons' clients secure the support they need to pursue meritorious claims”.

The litigation funding facility is the latest in a series of innovative offerings from the firm.

Alastair Morrison, Head of Client Relationships at Pinsent Masons says:

"Our clients are operating in industries that are experiencing profound change. We're investing in services that help them to respond to these tectonic shifts, changing our business from an expertise-based law firm into an international professional services business with law at its core. This means that we don't just apply lawyers to solve clients' problems; we deploy a wider range of professional disciplines, enabled by process and technology, to collaborate with our clients and others in the legal ecosystem to help them achieve their goals. This arrangement with Augusta is another example of how we seek to respond to our clients' challenges. "

Within the last three years Pinsent Masons has acquired diversity and inclusion consultant, Brook Graham, expanded its freelance lawyer hub, Vario, into Australia and Asia, and deployed a range of bespoke legal technology solutions built and tailored to client requirements by its 46-strong in-house R&D team.

Notes:

  • Augusta’s funding is deployed in tranches based on key procedural and settlement milestones in the case.
  • A fast-track process for reviewing claims eligible for funding is managed by a joint committee from Pinsent Masons and Augusta.
  • Funding will only be provided if Augusta and Pinsent Masons are satisfied that based on analysis at the date funding is sought the majority of any sums recovered (after payment of Augusta's funding costs and fees and any insurance premium for potential liability for opponents costs) will go to the client.
  • TPF can be provided at any stage throughout the life of the case, not just at the beginning.
  • In the event of an unsuccessful outcome, Augusta will bear all the costs incurred and any costs payable by the claimant to a successful Defendant will be covered by After the Event ("ATE") Insurance.
  • If the outcome is a successful resolution of a funded claim, Augusta will be repaid the funds deployed, plus a success fee based on the amount of funds deployed at date of resolution.  The level of fee is dependent on the time taken to make a recovery.
  • This framework is intended to facilitate settlement as the amount that a client repays is based solely on the tranches of funds deployed at the date of resolution and the sooner the case settles the less the success fee.
  • Pinsent Masons does not receive any commission or other payment  from Augusta as part of this arrangement

About Augusta

Augusta is the largest litigation and dispute funding institution in the UK* - with £150m of capital and a team of 70 in London our scale enables us to make decisions in market-leading timeframes and fund cases of any size.

*=by number of cases.

About Pinsent Masons

Pinsent Masons is a global 100 law firm, specialising particularly in the energy, infrastructure, financial services, real estate and advanced manufacturing and technology sectors. The firm employs over 3000 people worldwide, including around 1500 lawyers and more than 400 partners. The firm's international footprint encompasses seven offices across Asia Pacific, two offices in the Middle East, six offices in continental Europe and one in Africa. The firm also has comprehensive coverage across each of the UK's three legal jurisdictions.

  • Pinsent Masons LLP is a limited liability partnership registered in England & Wales (registered number: OC333653) authorised and regulated by the Solicitors Regulation Authority, and by the appropriate regulatory body in the other jurisdictions in which it operates. The word ‘partner’, used in relation to the LLP, refers to a member of the LLP or an employee or consultant of the LLP or any affiliated firm who is a lawyer with equivalent standing and qualifications. A list of the members of the LLP, and of those non-members who are designated as partners, is displayed at the LLP’s registered office: 30 Crown Place, London EC2A 4ES, United Kingdom.
  • We use ‘Pinsent Masons’ to refer to Pinsent Masons LLP and affiliated entities that practise under the name ‘Pinsent Masons’ or a name that incorporates those words. Reference to ‘Pinsent Masons’ is to Pinsent Masons LLP and/or one or more of those affiliated entities as the context requires. © Pinsent Masons LLP 2017.
  • Pinsent Masons office network extends across the major international business centres of London, Dublin, Munich, Frankfurt, Düsseldorf, Madrid, Paris, Doha, Dubai, Beijing, Shanghai, Hong Kong, Singapore, Johannesburg, Sydney Melbourne and Perth - and the key commercial centres in the UK.
Commercial

‘David v. Goliath’ Mindset Gives Funders a PR Edge

With the U.S. Chamber of Commerce leading the effort to regulate - or even fully abolish - litigation funding, the nascent industry has already made some powerful enemies. The 'War on Funding' is being waged on many fronts, among them is the inevitable PR battle. Fortunately for the funding community, when engaged in a PR campaign the industry can highlight its roots as a mechanism for 'David v. Goliath' cases to get off the ground. According to Forbes, with the pursuit of social justice now a national theme, litigation funders can and should leverage those tailwinds when responding to the onslaught of negative press the industry receives. Funders like Pravati Capital, for example, have battled wrongful imprisonment cases, IP theft claims and cases against harmful pharmaceuticals. Pravati founder and CEO Alexander Chucri hails from the Tech sector - he was a successful entrepreneur before founding the Arizona-based litigation funder. The emergence of industry participants from outside the legal community illustrates just how mainstream the notion of 'David v. Goliath' has become. Chucri's realization that there was market opportunity for funders who finance the Davids of the world came after his involvement in a 2003 lawsuit which left him marveling at the lack of innovative financing structures for legal claims. Every funder, regardless of how well-capitalized, has those David v. Goliath cases under their belts. It behooves them to highlight those cases, given the spotlight that is being shone on the more opaque aspects of the industry, like the desire for funders to remain undisclosed, and the (unfortunately unprovable) assertion that they never influence legal strategy. Like the plaintiff's bar, litigation funding can be viewed as implicitly regulatory; it fosters increased accountability amongst the business community. So even though funders are profit-seeking, they are doing plenty of social good along the way.
Commercial

New Zealand Law Commission to Reevaluate Litigation Funding

The Law Commission of New Zealand suspended its examination of litigation funding last year due to resource constraints, but in the wake of several high profile class actions funded by local and global litigation funders, the commission is now resuming its review of litigation funding. As reported in the LawFuel, at least seven litigation funders are operating in New Zealand. Funding has only taken off in the island nation over the last decade, as opposed to in neighboring Australia where funding has been commonplace since the 1990s. Aussies are debating the merits of funding, especially as pertains to fueling large, US-style class actions. Now it appears New Zealanders are joining the debate. Recent actions include the kiwifruit claim and Mainzeal class action (both funded by LPF Group), and the Fair Play on Fees action taken on behalf of over 20,000 claimants against multiple banks, said to be the largest class action in New Zealand history at the time. The New Zealand Law Commission will consider whether funding should be permitted in class actions, whether courts should have a role in approving and supervising funding agreements, what regulatory framework should be applied to litigation funders.
Announcements Commercial

Nick Rowles-Davies appointed as Chairman of the Commercial Litigation Association

The Commercial Litigation Association (CLA) today announces that Nick Rowles Davies, Executive Vice Chairmanof Litigation Capital Management (LCM) andFounder andCEO ofChancery Capital, hasbeen appointed as Chairman, effective immediately. Nick has been involved in the litigation finance and legal expenses insurance industries since 1999, making him one of the most experienced practitioners in the space. He created and defined the concept of portfolio litigation finance and is the global leader in identifying, creating and executing litigation finance portfolios. Nick, the former Director of the Association of Litigation Funders of England & Wales, said on his appointment as Chairman: “I am delighted to be involved in the CLA at such an exciting stage of its growth and I strongly identify with the association’s core values. The commercial litigation landscape is undergoing significant change and it’s great to be at the forefront of that change.” A pioneer in the development of the litigation funding industry in the UK and the common law world globally, Nick has led its transformation from third party funding, through litigation finance and now into a broad-based corporate finance offering. In 2010, Nick co-founded a family office-backed global litigation funding business before serving as Managing Director of Burford Capital, leading it globally outside of the Americas. He then founded Chancery Capital with a focus on corporate client portfolios before the Chancery team joined LCM in November 2018. Lord Neuberger, former President of the Supreme Court, who joined CLA as Patron in January this year, congratulated Nick on his appointment and commented: “The United Kingdom has an enviable international reputation for its commercial law and its commercial solicitors, barristers, judges and arbitrators. The quality and diverse nature of the legal professionals involved in the Commercial Litigation Association will help to ensure that we maintain, indeed enhance our high standards and international reputation.” Everyone at CLA is thrilled to have Nick Rowles Davies and Lord Neuberger on board. NOTES 1. The website of the Commercial Litigation Association is www.comlit.co.uk 2. For further comment or information on the association please contact Chris Nisbet, Commercial Director of CLA and Senior Partner of SMF on +447802330100 or chris@somuchfront.com 3. The Commercial Litigation Association is the UK’s only national association representing the interests of all those involved inthe business of Commercial Litigation and Dispute Resolution. Its members are drawn from a range of professions including solicitors, barristers, mediators, forensic accountants, insolvency practitioners, third party funders, insurers and electronic disclosure providers. Its key aim is to enhance access to justice for those involved in commercial disputes through increasing efficiencies and reducing costs of the litigation process.
Announcements Commercial

Litigation Capital Management (AIM: LIT) – Portfolio and Pipeline Update

Litigation Capital Management Limited (AIM:LIT) (LCM), a leading international provider of litigation financing solutions, today provides an update as to its portfolio and pipeline of litigation projects as at 30 June 2019. Current Portfolio LCM currently has a portfolio of 29 projects under management. 23 of those litigation projects are unconditionally funded and 6 projects are conditionally signed. The composition of the portfolio is as follows: Commercial Claims                                                                      8 Class Actions                                                                                  9 International Arbitration                                                            5 Insolvency Claims                                                                         5 Corporate Portfolios                                                                     2 Since LCM’s last announcement in relation to its portfolioon 28 May 2019, the projects whichare now unconditionally funded include: •    A class action brought in the Supreme Court of New South Wales on behalf of members of superannuation funds administered by Suncorp Portfolio Service Limited (“Suncorp") alleging that Suncorp breached its duties to avoid conflicts, act with due care and diligence and to act in the best interest of its members. •    A commercial claim involving proceedings in two separate jurisdictions seeking to recover funds which it is alleged were not paid to the claimant in breach of contract. •    A commercial claim to be brought in the Federal Court of Australia on behalf of a fashion designer seeking damages or an account of profits as a result of alleged trademark infringement. •    An international arbitration governed by the rules of the London Court of International Arbitration (LCIA) relating to a construction project in the middle east. Current Pipeline The current pipeline of pre-qualified opportunities continues to demonstrate the large and diverse investment opportunities within the company. LCM currently has approximately 59 pipeline projects across a mix of litigation financing including commercial, international arbitration, insolvency, class actions andcorporateportfolios. The estimatedpotentialinvestment across those 59projects exceeds A$380 million. That pipeline of investment opportunities is dynamic and changes regularly. The pipeline reflects the global nature of LCM's business with projects in Australia, the Asia Pacific and EMEA. Patrick Moloney, CEO of LCM, said: “LCM is ina period ofsignificant growthand wearepleased that this is reflectedinthe recent additions to our portfolio of litigation projects. Such increase demonstrates LCM’s ability to complete the due diligence process with respect to opportunities that were included in its pipeline at the time of IPO. It also demonstrates that LCM’s experienced team of investment managers are able to source and conduct due diligence on new opportunities to maintain a consistent and healthy pipeline of potential investment of a high value and quality. This will fortify LCM’s ability for future growth. These new projects are diversified across claim size, claim type and jurisdiction, contributing to a balanced portfolio.” CONTACTS Litigation Capital Management Patrick Moloney, Chief Executive Officer Nick Rowles-Davies, Executive Director Canaccord (Nomad and Broker) Bobbie Hilliam / Emma Gabriel Hawthorn Advisors Lorna Cobbett / Zinka MacHale Tel: 020 7523 8000 lcm@hawthornadvisors.com Tel: 020 3745 4960 About LCM Litigation Capital Management (“LCM”) is a leading international provider of litigation financing solutions. This includes single-case and portfolio; across class actions, commercial claims, claims arising out of insolvency and international arbitration. LCM has an unparalleled track record, driven by effective project selection, active project management and robust risk management. Headquartered in Sydney, with offices in London, Singapore, Brisbane and Melbourne, LCM has been listed on AIM since December 2018, trading under the ticker LIT. www.lcmfinance.com
Announcements Commercial

Litigation Capital Management (AIM:LIT) announces conditional settlement of litigation project

Litigation Capital Management Limited (AIM:LIT), a leading international provider of litigation financing solutions, announces that a conditional settlement has been reached in respect of one of its litigation projects. The conditional settlement is expected to contribute a gross profit to the Company of approximately A$2.7million to A$3million, with all capital invested by LCM also being recovered. The project relates to an open class action commenced in the Federal Court of Australia on behalf of certain persons that suffered loss as a result of making investments in an allegedly fraudulent investment scheme. The terms of the settlement areconfidential, andthe settlement is subjectto conditions whichinclude Court approval. LCM will make a further announcement with the financial metrics of this litigation project once the conditions of the settlement are met. Class actions represent one of several types of litigation projects that LCM provides funding for in addition to single-case and portfolio funding, as well as international arbitration, commercial claims and claims arising out of insolvency. Patrick Moloney, CEO of LCM, said: “The conditional settlement of this litigation project is further demonstration of LCM’s experience and expertise at funding class actions in Australia and our ability to achieve strong returns on invested capital. Class actions constitute a significant part of LCM’s heritage, and we see these cases continuing to make up part of our portfolio whilst we continue to diversify our portfolio by project type, claim size and geography.” Litigation Capital Management Patrick Moloney, Chief Executive Officer Nick Rowles-Davies, Executive Director Canaccord (Nomad and Broker) Bobbie Hilliam / Emma Gabriel Hawthorn Advisors Lorna Cobbett / Zinka MacHale Tel: 020 7523 8000 lcm@hawthornadvisors.com Tel: 020 3745 4960 About LCM Litigation Capital Management (“LCM”) is a leading international provider of litigation financing solutions. This includes single-case and portfolio; across class actions, commercial claims, claims arising out of insolvency and international arbitration. LCM has an unparalleled track record, driven by effective project selection, active project management and robust risk management. Headquartered in Sydney, with offices in London, Singapore, Brisbane and Melbourne, LCM has been listed on AIM since December 2018, trading under the ticker LIT. www.lcmfinance.com