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Commercial

New York Court Sets Champerty Precedent

Champerty is a word we hear often in connection with Litigation Finance. Despite the term being coined in the middle ages, champerty remains a reasonable issue to take precautionary measures against. The original purpose of champerty laws was to keep litigation from becoming a commercialized business. The National Law Review details that a recent New York decision has clarified the champerty doctrine and how it may be applied. Specifically, the court ruled on the separation of champerty versus standing to bring an action—saying that these two are separate and distinct. On June 3 of this year, the court went on to declare that if a champerty defense isn’t raised during the responsive pleading, it is waived and may not be brought up again later. The doctrine of champerty disallows purchasing a stake in a lawsuit with the intent of bringing an action. That can apply to some types of litigation funding agreements. More commonly though, funding agreements with third-parties provide the means to pursue litigation with the promise of giving the funder a percentage of monies awarded. So long as the funders aren’t actively involved in decision making, champerty rules are not violated.
Announcements Consumer

Pre-Settlement Lawsuit Funding Company Tribeca Capital Launches COVID-19 Program

NEW YORK, June 17, 2020 /PRNewswire/ -- In an effort to use its resources to bring relief and hope to those affected by unprecedented global circumstances, Tribeca Capital Group, LLC, an industry leader in pre-settlement lawsuit funding, announces that it has developed an initiative to reach lawsuit plaintiffs who have been touched by COVID-19 or have been negatively impacted by the sharp downturn in the economy.

"We've watched the amazing events unfolding over the last few months, and we know that there are plaintiffs who have filed suits over automobile accidents, defective products, and other wrongs, who have lost their jobs, or they are ill, caring for a sick family member, or staying home with their children. Regardless of their personal circumstances, they've seen their incomes drop, and unemployment payments just aren't covering all their expenses," explains Rory Donadio, Tribeca's founder and owner.

"We're talking about people who had previously filed a case because they've been hurt in some way and need to be compensated for it. Those cases don't necessarily have anything to do with the pandemic, but now the plaintiffs find that the coronavirus is adding insult to injury by robbing them of their ability to make a living. That's where Tribeca comes in."

Litigation funding allows a plaintiff in a lawsuit to gain access to some of their expected recovery before the case is settled or comes to trial. Anticipating that the plaintiff will receive a settlement amount or an award, Tribeca can often provide an advance that the plaintiff can use long before the case is finally resolved.

"Tribeca is willing to wait as long as it takes for the case to finish, even if that's months or years. In the meantime, the plaintiff can use the advance to pay living expenses, medical bills, rent or mortgage payments, whatever they need," says Donadio. "And, if our client doesn't win or receive a favorable settlement, they don't have to pay us back. It's a risk we're willing to take to make sure that these clients can provide for their families during this trying time."

Tribeca Capital has helped hundreds of plaintiffs in all kinds of cases, including: Auto and Truck Accidents Defective Products and Medical Devices Dangerous Drugs Labor and Employment Discrimination Premises Liability Whistleblower Jones Act Railroad Accidents Commercial and Business Litigation

If you are a plaintiff or plan to file a case in the near future, Tribeca Capital encourages you to contact Rory Donadio, Tribeca Capital Group, LLC, at rory.donadio@tribecacapllc.com, (866) 388-2288 to discuss how pre-settlement funding can help you access the funds you need to weather this outbreak.

For more information, please visit Tribeca Capital at their website.

Commercial

Channel Islands See Increase in Litigation Funding

Litigation Finance is poised to experience a boom in demand as the world tries to recover from COVID-19. Rampant financial uncertainty creates a need for the funding that insures access to justice for those of few means. Funders are well-capitalized, and preparing to sift through cases to find those with the best chances of success. This is all very similar to what the legal world experienced during the 2008 financial crisis. Mondaq explains that law firms can better meet their financial goals by accepting a hand from a litigation funder. Businesses can better pursue litigation without investing limited funds in legal matters.  The 2012 decision involving Valetta Trust paved the way for third-party funding in the Channel Islands by disregarding outdated champerty laws. This laid the groundwork for a system where huge entities no longer have the upper hand over less monied plaintiffs. Since the Valetta Trust decision, litigation funding has steadily increased. The upswing is predicted to continue, as it has in much of the developed world.
Announcements Commercial

Parabellum Capital Announces Final Close of Latest Litigation Finance Fund

Total Commitments Exceeding $465 Million

Parabellum Capital LLC ("Parabellum"), a leader in commercial litigation finance, today announced the final closing of its latest private investment fund, Parabellum Partners II, LP (the "Fund"), with over $465 million in commitments. The Fund is Parabellum’s second broadly-offered private investment fund since its founding in 2012.

The Fund’s investment strategy leverages Parabellum’s investment and risk management processes to build a diversified portfolio of single-case, portfolio, and special situations investments. Limited partners in the Fund include endowments, foundations, pension funds, and other institutional investors.

"We are delighted to have raised new capital from investors in our first fund, as well as a range of institutional and high net worth partners, resulting in a highly-diversified investor base," said Howard Shams, Parabellum Co-Founder and CEO.

"Our investment pipeline continues to grow as we expand existing relationships and the market embraces our emphasis on aligned investment structures," said Aaron Katz, Parabellum Co-Founder and CIO. "We have added new team members to accommodate increased demand for our capital and built out practice area specializations that provide added value to our investments and partners. Significantly, this Fund’s capital allows us to address urgent litigation financing needs for both clients and law firms during this period of economic distress."

About Parabellum Capital

Parabellum Capital is a leading financier of commercial and intellectual property litigation. Its principals pioneered commercial litigation funding in the US and remain on the forefront of shaping the asset class as the industry evolves. Parabellum is a trusted financial partner to claimholders and law firms for a wide array of litigation matters in the US, other common law jurisdictions, and international arbitration forums. Founded in 2012, Parabellum’s team includes legal and financial professionals with backgrounds at major law firms, investment banks, accounting firms, and the federal government. Parabellum principals previously founded the Legal Risk Strategies and Finance group at the global investment bank Credit Suisse.

Parabellum manages both separate accounts and pooled private equity vehicles for institutional and high-net-worth investors globally. Based in New York, Parabellum’s team has invested hundreds of millions of dollars in commercial litigation situations. For more information, visit www.parabellumcap.com or contact Katie Hogan at khogan@parabellumcap.com.

Commercial

Nigerian Case Exposes Weaknesses in Asset Recovery Law

Asset recovery is a tricky business in the best of times. When financial professionals misappropriate funds for their own gain, they can be remarkably clever about hiding it. Such was the case with the Federal Republic of Nigeria as they pursued a case against Shell and Eni regarding the OPL 245 deal. Premium Times details that Nigeria’s plan to recover looted funds is not ideal. Outsourcing various recovery claims to a number of private firms does not seem to be a tenable strategy. In fact, the High Court in London has rejected Nigeria’s attempt to pursue a claim of over a billion dollars from Shell and Eni. Now, FRN is even deeper in debt, having spent almost $2 million in the failed pursuit of missing funds. That’s enough money to fund over 15,000 entire families for a year--according to numbers at the National Cash Transfer Programme currently redistributing recovered funds. Initially, it was asserted by Eni that costs for the recovery would be covered by Drumcliffe, a litigation funder. But the barrister on the case stated that the Nigerian government should make the payments and gain any approvals needed to proceed. If that’s true, how might that impact the funder’s payout, not to mention the people of Nigeria? Suspicion has fallen on the Nigerian Minister of Justice, owing to the high-risk nature of their decision making. Incomprehensible documents and months-long delays in disclosure have not filled the Nigerian people with confidence. Nigeria’s asset recovery policy necessitates that all costs and risks associated with assert recovery are to be outsourced to private firms for a 5% share of recovered funds. What does seem to be clear is that a major overhaul of asset recovery law should be undertaken, focusing on clarifying financial norms, disclosure, and the opacity of funding agreements.
Commercial

Southern Response’s Desperate Attempt to Avoid Opt-Out Class Action

Government-owned entity Southern Response is engaged in a last-ditch effort to avoid an opt-out class action over allegations regarding earthquake insurance settlement claims. Policyholders have asserted that Southern Response withheld information allowing them to underpay when settling claims related to the Canterbury earthquake. Stuff NZ reports that as many as 3000 policyholders may have been misled by Southern Response, who may not have disclosed costs for rebuilding and repairs. This led to policyholders being unaware of what they were actually entitled to, and therefore accepted settlements while relying on incomplete facts and figures. Southern Response has appealed an earlier court decision to approve the opt-out. A litigation funder is involved in the case and will receive an undisclosed share of any award stemming from the class action. This is good news, as Southern Response seems willing to drag the case out for as long as possible. Understandable, since losing this class action could lead to New Zealand Government losses in the millions. In New Zealand, laws regarding funding agreements in opt-in vs opt-out cases are still poorly defined. Tuesday is expected to be the last day for the Supreme Court hearing.
Commercial

Russian Oligarch’s Son Loses Bid to Hide Assets from Mother in Burford-Funded Case

The largest divorce settlement in Britain’s history is not over yet. Temur Akhmedov recently lost his effort to keep his money secret from his step-mother—who is still attempting to gain the award settlement from her divorce. Tatiana Akhmedova is utilizing litigation funding from Burford Capital as she pursues her claim. Daily Mail has revealed that Temur Akhmedov is displeased at his step-mother’s use of third-party funding, and had previously demanded that the terms of the funding be revealed. Meanwhile, his attempts to hide his personal financial records have fallen flat. Justice Gwynneth Knowles has ruled that no reasonable grounds were demonstrated that would necessitate challenging Mrs. Akhmedova’s funding arrangement. This is good news for proponents of litigation funding, even as Temur stated he would pursue the matter with an appeals court—which he asserted would be fairer to him. He went on to express frustration with the family court, implying that the ruling was ‘unfair.’ Akhmedov likened the British family court to ‘Imperialism’. To date, Mrs. Akhmedova has received roughly GPB 5 million of the 452 million awarded to her in the divorce—representing about 40% of her ex-husband’s business. Judges confirmed that Temur Akhmedov has not paid out any of his mother’s settlement voluntarily. Temur has stated that he does not recognize the British judge’s ruling because of his father and Tatiana’s 2000 divorce in Moscow.  
Commercial Covid-19

Curiam Capital Director Discusses Litigation Finance

Lauren Bernstein joined Curiam Capital LLC in March 2019. Her experience spans more than a decade. In this interview, she discusses starting her own business in 2014, why she chose to work in Litigation Finance, and how COVID impacts several parts of her life. In Bernstein’s interview with JD Supra, she explains that working at home due to COVID precautions was easier than anticipated. Having a routine helps her stay focused and productive. With regard to COVID, Bernstein welcomes resource centers that help clients and others make informed choices about financial, legal, and business matters. Ideally, she says, people should get their information from more than one source. Bernstein is a proponent of litigation funding and is prepared for a COVID-related spike in requests for funding. She details that funding may be a good option for clients with existing claims, especially when they are no longer able to pay legal fees. COVID promises to drive litigation in insurance and insolvency or breach of contract for commercial litigation in particular. In addition to the inconvenience of remote working, Bernstein understands that one of the main upcoming challenges is to find effective ways to quickly analyze new cases. Finding strong cases is likely to require sifting through more cases more efficiently than before. Speaking out against overregulation in Litigation Finance, Bernstein explains that she sees no necessity for judicial approval of funding. She referred to the conclusions of the New York City Bar Association’s working group, which was clear in saying that funders do not control litigation. She sees no difference between funders (which some feel should be disclosed) and borrowing money from banks (which need not be disclosed) in terms of necessary disclosure. When asked what advice she would give her younger self, Bernstein opined on the value of a good mentor.
Consumer Covid-19 Special Features

Key Takeaways from LFJ’s Digital Conference on Covid’s Impact on Consumer Legal Funding

On June 11th, Litigation Finance Journal held a special digital conference on Covid's impact on the Consumer Legal Funding industry. The panel discussion was moderated by Dan Avnir (DA), Managing Director at Bryant Park Capital. Panelists included Eric Schuller (ES), President of the Alliance for Responsible Consumer Legal Funding (ARC), Kevin Confoy (KC), Chief Risk Officer of GloFin, Paul Galsterer (PG), Founding Partner of The Injury Firm, Lawrence Yablon (LY), Partner at Robinson Yablon PC, and Anthony Sebok (AS), Professor of Law and Co-Director of the Jacob Burns Center for Ethics in the Practice of Law at Benjamin N. Cardozo School of Law. Some key takeaways from the discussion are below: DA: In the current landscape of corporate liabilities, has there been a liability shift? LY: It is a big concern, especially for small businesses. I am pessimistic that this will be a lucrative area for funding or personal injury firms. That there will be laws put in place to protect businesses from further damage. They’ve suffered in the public’s mind, and now have lawyers coming after them because of a pandemic, which nobody predicted. As an underwriter, I’d be very hesitant to have my underwriting clients get involved in those types of cases—because of the optics, and ultimately there will be a fund to protect nursing homes and hospitals and such. But if businesses force their employees to come back, but without a plan in place—people will be less sympathetic to that, and you might see more cases. PG: It’s a very new area. I would think that there are going to be protections in place. I’d be extremely cautious about getting involved in that type of funding. DA: There’s been no shortage of suits, nursing home cases, or Enterprise Rent-a-car, etc. In 20 plus states, Governors have issued emergency orders that granted immunity from COVID-related lawsuits. How liable are companies, and how high might the burden of proof be in these cases? AS: In New York, the executive order related to health and health professionals. One of the missing pieces of the Litigation Finance market, even before COVID, was medical malpractice. The underlying tort law drivers aren’t really present here. I’d be cautious about predicting massive scale of new liability coming out of traditional tort law. The law itself isn’t going to be a big driver here. But the federal government may help with compensation.  DA: Are corporate liabilities specific to COVID a state or federal matter? What about a compensation fund for victims? AS: In the consumer sector, it will follow the pattern of claims in state court. I think that will continue. ES: On legislation that has passed, Ohio is a good example of what it will be like going forward. Unless a company was dramatically negligent, the company is protected from litigation. 3M, for example, said they wouldn’t ramp up PPE production without federal immunity from lawsuits. The Illinois governor made an executive order that if an essential worker came down with COVID, it will be assumed that they caught it at work and could file worker’s comp. Businesses didn’t like that, and that kind of thing will vary between blue and red states. DA: For which funders is this advice most applicable? KC: As we talked about, there’s a lot of uncertainty. Consider optics. More aggressive funders are more likely to get involved in COVID liability cases. More experienced lenders are likely to pass on these. DA: What were some of the key pressures facing originators pre-COVID, and how does COVID impact pending legislation? ES: COVID attracted focus in some state legislatures. All but 4-5 states shut down. The focus was on budget, and getting businesses open again over all other concerns. One aspect that could be a possibility is allowing companies to have tort protection. That has to include disclosures of contracts and funders—people will want to know who’s behind it. Legislators were nervous about how confident the litigation funders were. So that’s being used as an excuse for tort reform. KC: The only other legislation we’re concerned about is whether the federal government will continue to extend unemployment—because the result from that will drive business. DA: Would you say that plaintiff advances are more or less attractive in this environment? LY: You can make the argument on both sides. I’ve been bullish that the worst is behind us. Plaintiff personal injury is more or less recession-proof. Overall, it remains an attractive investment.