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Longford Capital General Counsel to Serve as Adjunct Professor of Law Teaching Course on Litigation Finance

CHICAGO, February 24, 2020 – Baylor Law has tapped William P. Farrell, Jr., co-founder, managing director, and general counsel of Longford Capital, to serve as an adjunct professor at the law school and to lead a course on litigation funding. The litigation funding course is a part of Baylor Law’s innovative LL.M. program in litigation management, the first program of its kind. The Litigation Management program is designed for experienced litigators and trial lawyers and other lawyers who are impacted by litigation. Professors Jim Wren and Liz Fraley, co-directors of the program, included litigation finance as a necessary component of the curriculum. “Litigation funding must be considered in effective litigation management,” said Professor Wren. “Third party litigation funding is increasingly common and clearly offers benefits to law firms and companies involved in litigation.” “I am impressed with Baylor’s unique LL.M. program in Litigation Management, the first of its kind,” Mr. Farrell said. “The fact that a leading law school has incorporated a course on litigation finance speaks to the tremendous growth in awareness and acceptance of our industry. Professor Wren and Professor Fraley have developed a practical, useful series of courses that cover the range of topics relevant to commercial litigation. The course on litigation funding explores many aspects of this new form of specialty finance. We will discuss the reasons for the enthusiasm for litigation finance, the fundamentals of litigation funding, and much more.” Visit Longford Capital at https://www.longfordcapital.com/. About Longford Capital Longford Capital is a leading private investment company that provides capital solutions to law firms, public and private companies, universities, government agencies, and other entities involved in large-scale, commercial legal disputes. Typically, Longford Capital funds attorneys’ fees and other costs necessary to pursue meritorious legal claims in return for a share of a favorable settlement or award. The firm manages a diversified portfolio and considers investments in subject matter areas where it has developed considerable expertise, including, business-to-business contract claims, antitrust and trade regulation claims, intellectual property claims (including patent, trademark, copyright, and trade secret), fiduciary duty claims, fraud claims, claims in bankruptcy and liquidation, domestic and international arbitrations and a variety of others.

Bankrupt Company’s Trustee Looks to Clawback $6.3MM from Quinn Emanuel, and $2MM from IMF Bentham

The bankruptcy trustee for the now-defunct aircraft parts manufacturer Super98, is looking to clawback payments made to law firm Quinn Emanuel and litigation funder IMF Bentham, for a claim the company pursued against Delta Airlines. As reported in Bloomberg Law, the complaint was filed in the the U.S. Bankruptcy Court for the Central District of California, and seeks to reclaim $6.3MM in payments to Quinn Emanuel. Some of those payments came from litigation funder IMF Bentham, which financed Super98's claim against Delta. Quinn agreed to a complicated success-fee arrangement with Super98, whereby Super98 agreed to pay 40% of Quinn's hourly rate, and if Quinn secured a payout of at least $5.7MM, Super98 would agree to pay 200% of Quinn's hourly rates for work completed after April 1, 2018. IMF Bentham fronted some of the funds for Super98, which went directly to Quinn. Both Quinn and IMF Bentham received payouts from the undisclosed settlement in the claim. But now, the trustee for Super98 is looking to clawback $6.3MM from Quinn, and $2MM from IMF Bentham. The trustee is alleging preferential payments to Quinn and IMF - payments the trustee claims should go to creditors first. They are also claiming that Quinn failed to properly notify them of an attorney's lien.

Litigation Funding Is Ready for a Wider Reach in the Russian Market

St. Petersburg, Russia -- (ReleaseWire) -- 02/19/2020 -- Although the Russian litigation finance market is at an early stage of development, a surge in the interest for legal funding solutions could be observed over the last year. While third party financing for legal proceedings has previously been provided by private investors or by law firms as an auxiliary business, specialized litigation finance companies have only recently appeared on the market. "Litigation finance is still a novelty to the Russian legal sphere. However, we have observed widespread support among the judicial community and government structures, who aim to make the Russian judicial system more accessible. " says Aleksander Bogdanov, director of Seitenberg LLC. "Over the last year, we've observed a large increase in the requests for litigation funding in Russia". As of 2019, Seitenberg LLC, founded by European and Russian business, finance and legal professionals, provides funding for commercial litigation and arbitration in Russia and the CIS. Based in St. Petersburg, Seitenberg funds cases starting from a value of ten million rubles, with a particular focus on contract disputes, shareholder disputes, insolvency cases, intellectual property disputes, and commercial fraud as well as divorce cases. Seitenberg is the first Russian litigation finance provider with particular expertise with international clients. As of February 2020, more than two-thirds of cases funded by Seitenberg came from international companies or Russian subsidiaries of international companies. With a team made up of four nationalities, with ten different languages spoken, Seitenberg's current field of work spans over six countries. "Litigation Funding in Russia is particularly interesting for international businesses, who otherwise often refrain from pursuing even the most promising claims, due to the financial and other risks involved", Aleksander Bogdanov explains. Seitenberg provides its clients with tailor-made litigation funding solutions for their Russian operations, keeping up with international reporting and compliance standards. Besides financing, Seitenberg provides its international clients with analytical, business intelligence, AML compliance and asset tracing services, all provided by in-house teams. About Seitenberg LLC Seitenberg LLC is the first Russian litigation finance company, specializing on international clients. Based in St. Petersburg, Seitenberg provides funding, analytics and operational support to claimants and law firms engaging in litigation, arbitration and restructuring in the Russian Federation and the CIS, significantly reducing the risk that comes with legal disputes in those jurisdictions. For further information regarding Seitenberg and its activities, please visit www.seitenberg.net. URL: http://www.seitenberg.net CONTACT INFORMATION Seitenberg LLC 3-Ya Sovetskaya Ulitsa, 9, A 191036 Saint Petersburg, Russian Federation Alexander Bogdanov +7 (812) 407 15 21 office@seitenberg.net SOCIAL MEDIA Twitter: https://twitter.com/seitenberg_net Facebook: https://www.facebook.com/Seitenberg.Finance LinkedIn: https://www.linkedin.com/company/seitenberg-finance Instagram: http://www.instagram.com/seitenberg.finance

Multiple States Pursue Regulations Against Litigation Funders

Last week, Utah became the latest state to introduce a litigation funding bill, as state senator James A. Dunnigan filed House Bill 312, which would force litigation funders to register with the Department of Commerce, and also aims to regulate how they operate. Many lawmakers are blaming litigation funding for the rising cost of insurance, which is an argument that is being made by Big Insurance and the Chamber of Commerce against the industry. As reported in Claims Journal, the New York state Assembly and Senate have introduced seven separate litigation funding bills, with both Republicans and Democrats co-sponsoring the legislation. Assembly Bill 6866, for example, aims to force certain language into litigation funding bills that makes the terms more transparent to consumers. Florida lawmakers are taking similar measures. House Bill 7041 would mandate that funders register with the Department of State, in addition to capping interest rates at 30% and fees at $500. The bill also seeks to force disclosure of any funding agreements. The onerous bill is being championed by the American Property Casualty Insurance Association, which blames litigation funders for rising payouts. They cite one law firm's 2019 study which found that the average single-plaintiff bodily injury verdict doubled to $54.3MM from 2014-2018. Wisconsin and West Virginia are among the states that have already passed regulation. Meanwhile, SB 471 is still idling in the United States Senate. The bill, introduced by a trio of Republican Senators, seeks to enforce mandatory disclosure of litigation funding partnerships in all class action and MDL cases. While most of these bills target the consumer legal funding space, there is some overlap in terms of how legislation - especially at the national level - might impact commercial funders as well.

IMF Bentham to become Omni Bridgeway

SYDNEY, 14 February 2020: IMF Bentham Limited (ASX:IMF) and Omni Bridgeway are excited to announce that IMF Bentham Limited is adopting the unified global name of Omni Bridgeway Limited, following a shareholder vote at the company's General Meeting on 14 February 2020. The adoption of a single name follows the merger of the two businesses in November 2019 to create a global leader in dispute resolution finance, with expertise in civil and common law legal and recovery systems, and operations spanning Asia, Australia, Canada, Europe, the Middle East, the UK and the US. IMF Bentham Chief Executive Officer and Managing Director Andrew Saker said: "Our people are delighted to be united under the Omni Bridgeway name. Over more than three decades, Omni Bridgeway has become a highly respected and trusted name in international dispute resolution, particularly in key growth markets such as Continental Europe and Asia. The Omni Bridgeway name reflects a proud, 34-year record of funding disputes and enforcement proceedings around the world, recovering billions of dollars for clients and claimants. What is clear is that IMF Bentham and Omni Bridgeway have shared values and a shared culture of striving to deliver for clients. Across every part of this united business, our smart and resourceful professionals will continue to pursue every claim with curiosity and drive to secure the best possible outcomes for our clients." Omni Bridgeway intends unveiling a new global corporate identity in coming months. This will include a coordinated roll-out of new, consolidated Omni Bridgeway branding across all business units and a new website. ABOUT IMF BENTHAM AND OMNI BRIDGEWAY Following the merger of the IMF Bentham and Omni Bridgeway operations in November 2019, the combined group is a global leader in dispute resolution finance, with expertise in civil and common law legal and recovery systems, and operations spanning Asia, Australia, Canada, Europe, the Middle East, the UK and the US. IMF Bentham and Omni Bridgeway offer end-to-end dispute finance from case inception through to post-judgment enforcement and recovery. IMF Bentham has built its reputation as a trusted provider of innovative litigation financing solutions and has established an increasingly diverse portfolio of litigation and dispute financing assets. IMF Bentham has a highly experienced litigation financing team overseeing its investments, delivering, as at 30 June 2019, an 89% success rate across 192 completed cases (excluding withdrawals). Visit imf.com.au to learn more. Omni Bridgeway was founded in the Netherlands in 1986 and is known as a leading financier of high-value claims and a global specialist in cross-border (sovereign) enforcement disputes. The Omni Bridgeway group includes ROLAND ProzessFinanz, a leading German litigation funder which became part of Omni Bridgeway in 2017, and a joint venture with IFC (part of the World Bank Group). The joint venture is aimed at assisting banks with the funding and managing the enforcement of non-performing loans and related disputes in the Middle East and Africa. Visit omnibridgeway.com to learn more.

UK Legal Industry Reaches All-Time High in 2019

The UK Legal Industry generated revenues of £37.1bn in 2019, up 4.8% on 2018 – an all-time record, according to data released today by the Office of National Statistics. To put this in context, overall 2019 UK Services Industries turnover was £2.3tn, up 3.5%.

Legal Industry Activity Looking at activity specifically in the UK Legal industry (Solicitors, Barristers and Patent Agents), turnover in Q4 of 2019 was the highest on record at £10.1bn, the first time the £10bn barrier has been breached for legal services. This was up 11% from Q4 2019. And Legal Services now accounts for 1.6% of UK Services output for the full year 2019. To compare, Accounting Services (accounting, auditing, bookkeeping and tax, i.e. not including consulting) generated £8.2bn in Q4 2019.
UK Legal Industry Reaches All-Time High in 2019 2
Louis Young, Managing Director at leading litigation funder Augusta commented on the ONS data: “The Legal Industry in the UK has shrugged off the uncertainty of Brexit. The strength of our law firms and courts has grown in international recognition, leading to an influx of business from overseas. The provision of finance from external sources has been a significant contributor to this growth and will become more relevant as time progresses.” Louis Young is available for interview as required. About The ONS Data:
  • Office of National Statistics publishes regular data on the UK services industry – the Monthly Business Survey
  • Chart shows UK turnover for Legal Services (JQ3O) and overall Services Industries (JT28) for calendar years from 1998 to 2019
About Augusta Ventures: – Established in 2013, Augusta is the largest litigation and dispute funding institution in the UK by # cases. Augusta’s scale enables us to make decisions in market-leading timeframes and fund cases of any size. – Augusta is organised into specialist practice groups: Arbitration, Class Action, Competition, Consumer, Intellectual Property and Litigation, and sectors: Financial Services and Construction & Energy. – By the end of 2019, Augusta had funded 227 claims.

Valuing Indemnity Protection Investment Returns in Litigation Finance

The following article is part of an ongoing column titled ‘Investor Insights.’  Brought to you by Ed Truant, founder and content manager of Slingshot Capital, ‘Investor Insights’ will provide thoughtful and engaging perspectives on all aspects of investing in litigation finance.  Executive Summary
  • Indemnities are not costless instruments; they are akin to securities options, but without a stated option value
  • Approaches to determining cost of indemnity include: Probability weighted outcome approach, Opportunity Cost Approach and Approach based on empirical evidence
  • Implications for Portfolio Returns are that improper assessment of indemnity returns may materially skew return results of a portfolio
Investor Insights
o   Indemnities have a cost and their cost should be used to determine investor returnso   Depending on how indemnity performance is measured, it has the ability to skew portfolio performance
Some litigation finance providers offer a product called indemnity protection (please don’t call it insurance), which is a product designed to protect plaintiffs against adverse costs in certain jurisdictions (Canada, Australia and the UK, for example) where the plaintiff may be found liable for defense costs should the defendant win the case.  Indemnity protection is prevalent in product class action and securities class action cases. What makes indemnity protection challenging is the process of estimating the returns inherent to providing the protection.  Indemnities differ from traditional litigation finance, in that the latter requires the funder to finance hard costs (legal counsel, court costs, expert witness costs, etc.), while the former only pays out once a case is lost by the plaintiff, and subject to the court’s determination regarding the application of adverse costs.  In the event the plaintiff is successful, the indemnity provider shares in the contingent proceeds and is not liable for any payout. However, in the event the defendant is successful, the indemnity provider must pay the indemnity amount and forego any prospective proceeds.  In a normal rate of return calculation, the numerator (i.e. gains or proceeds) and denominator (dollars deployed to finance costs) help determine a Return on Invested Capital (“ROIC”) or Multiple of Invested Capital (“MOIC”). However, with indemnities there is no denominator; in the event the plaintiff wins the case and hence there is no “cost”. Or is there? I think most people in finance would argue strongly, and rightly so, that there is indeed a cost.  I liken the analysis to that of a securities option.  In the context of a securities option (a put or call option, for example) one pays an upfront amount (i.e. the option price) to attain the right to benefit in either the reduction or increase in the underlying stock price.  The value of the option is based on the market’s view of the weighted average probability of the event taking place (i.e. achieving the strike price in a given period of time). In the case of an indemnity, there is no cost to providing the indemnity (other than out of-pocket contracting costs) even though the opportunity has value to the indemnity provider.  The value of the indemnity for the investor is inherent in the pay-out they expect to receive on success, which is offset by the likelihood of having to pay out under the indemnity.  Essentially, it is a costless option.  The upside produces infinite returns, while the downside produces a total loss. Approaches to Valuing the Indemnity Protection As we all know, nothing is “costless”. Instead, I would suggest that an investor in an indemnity needs to determine a theoretical cost for that investment. One approach is to look at the litigation funder’s underwriting report and economic analysis to determine the probabilities associated with various negative outcomes pertaining to the case, and probability-weight the negative outcomes to determine a theoretical cost of capital. Of course, these need to be looked at in the context of the risks of the various case types in the relevant jurisdiction, in addition to the risks of the case through the various stages of the case, as adverse costs can have multiple pay-out points throughout the case.  As an example, securities class actions in Australia and Canada, when certified by a court, have an extremely high success rate (meaning that they typically settle quickly after the certification). Another approach might be to look at the alternative to utilizing that same capital in an investment with a similar risk profile, where the potential outcome could be the same and the risk of loss is similar.  As an example, if the opportunity cost of providing an indemnity was to buy a securities option with a similar risk profile, then you could use the market cost of the option as a proxy for the cost of the indemnity. Yet another alternative would be to study the outcomes of a large sample of identical indemnities to try and determine the probability of a negative outcome and apply it to the indemnity amount to determine a notional cost.  Unfortunately, much of this information remains in the private domain, as most cases which use indemnity protection tend to settle.  In time, it may be that there is sufficient data to make this approach realistic, but as it stands, there is insufficient data to make this a viable alternative. While approaches will differ by fund manager and investor, the important point is to eschew the concept that an indemnity is a costless financial instrument, as to do so would skew the results inherent in a fund manager’s track record where indemnities are an important part of their strategy.  This same result can also occur in more traditional litigation finance cases where there is a settlement shortly after the funding contract has been entered into, and which did not necessitate the drawing of capital.  In this case, the returns are also infinite, but perhaps there should have been a theoretical cost of capital based on the probability of the funding contract being drawn upon. Investor Insights: When assessing the rates of return on an indemnity, my approach is to determine a weighted average probability of loss outcomes and apply them to the Indemnity amount in order to determine a notional cost for the indemnity.  This analysis becomes extremely important when assessing portfolio performance because most often fund managers do not assign a notional cost to their indemnities when providing their investment track records, and hence positive indemnity outcomes make their overall portfolio performance seem more impressive than one might otherwise assess.  A simplified example of the potential for an indemnity to skew portfolio performance based on approach is as follows: Assumptions: Case Type:                             Security Class Action Indemnity Amount:             $1,000,000 Damage Claim:                      $10,000,000 Contingent Interest:              10% Contingent Interest Award:  $1,000,000 Probability of Loss                $ Loss* Loss at Summary Judgement:                  10%                     $100,000 Loss at Certification:                                   5%                       $50,000 Loss at Trial:                                                 25%                     $250,000 Notional Cost of Indemnity:                                                  $400,000 * calculated as probability of loss multiplied by Indemnity Amount.
  1. Return Calculation applying a theoretical cost to the Indemnity in a win scenario:
ROIC: =       $600,000 ($1,000,0000-$400,000) = 150% $400,000 MOIC:                  $1,000,000 = 2.5 $400,000
  1. Return Calculation applying no cost to the indemnity in a win scenario:
MOIC & ROIC:          $1,000,000 = Infinite $0 Edward Truant is the founder of Slingshot Capital Inc. and an investor in the consumer and commercial litigation finance industry. Slingshot’s blog posts can be accessed at www.slingshotcap.com.

JustKapital Considering Pulling Out of Westpac Claim in Wake of Common Fund Order Ruling

Litigation funder JustKapital is considering bailing on the Westpac claim, after the Australian Supreme Court overturned common fund orders. As the Geelong Advertiser reports, the Aussie High Court recently ruled that common fund orders are a no-go. A common fund order enables a litigation funder to collect payment from all class members, regardless of whether they actually sign on with the funder. Now that such orders have been rescinded, funders must resort to old fashioned book-building, where they sign up thousands of claimants in order to collect their fees from each. The process is long, arduous and costly, but without a requisite number of claimants to recoup from, cases aren't worth the financial risk. That's what JustKapital is contending, as the funder considers pulling out of the Westpac claim, now that a common fund order is no longer in place. The underlying case involves allegations that Westpac sold expensive insurance policies to customers - policies which cost more than similar ones on the market. Claimants also allege that insurance brokers pushed Westpac policies over other less expensive ones, and duped customers to whom they had a fiduciary responsibility. Shine Lawyers, the firm representing the claimants, has announced that the claim may no longer go forward, given JustKapital's reservations about continuing. Currently there are 88,000 potential claimants, and while neither Shine nor JustKapital put a number on the amount needed to continue the case, it is clear that some old fashioned book-building is in order if this case is to continue.

The Alternative Legal Service Providers Market in US to Reach Revenues of Around $19 Billion During the Period 2020 −2025 – Market Research by Arizton

CHICAGOFeb. 6, 2020 /PRNewswire/ -- According to Arizton's recent research report, Alternative Legal Service Providers Market in US - Industry Outlook and Forecast 2020-2025 is expected to grow at a CAGR of over 23% during the period 2019−2025.

Key Highlights Offered in the Report: 

  • The identity of the US legal industry is being refreshed and turbocharged in ways never seen before, with alternative legal service providers at the heart of all this action. The disaggregation of legal services is underway, not driven by players in the industry, but by clients.
  • On average, many legal businesses and in-house legal teams are pouring in significant work and time on low-value tasks across legal functions. They are struggling to utilize talent efficiently. As this realization is increasingly dawning on those working in legal departments, they are juggling the demand from the management to operate with the same speed and efficiency as the overall enterprise.
  • Organizations are increasingly implementing effective preventative and support measures, thus driving demand for litigation and investigation support.
  • There is a resistance among both corporations and law firms by not altering their models to fully engage alternative legal service providers, thereby driving inefficiencies in the market.
  • While alternative legal service providers have a lot to offer, they have a scattered approach when it comes to listening to client goals and concerns and communicating how they can help in maneuvering business challenges.
  • Quite a few law firms use the services of alternative legal service providers via partnerships and securing aid to suitably provide services in spaces of legal research, litigation, e-discovery, and document review among others, which they traditionally offered themselves.

Key Offerings:

  • Market Size & Forecast by Revenue | 2019−2025
  • Market Dynamics – Leading trends, growth drivers, restraints, and investment opportunities
  • Market Segmentation – A detailed analysis by products, services, end-user, and geography
  • Competitive Landscape – Profile of 4 key vendors and 20 other vendors

Get your sample today! https://www.arizton.com/market-reports/alternative-legal-service-providers-market-united-states

Alternative Legal Service Providers Market in US – Segmentation

  • New Law firms have been the most disruptive players in the market, accounting for major volumes of work in the document review and litigation spheres. There is a growing trend of building strong SLAs and utilization of performance metrics.
  • As several organizations predict an uptick in litigations, the market for litigation and investigation support is expected to grow. Businesses that venture into international trades are being threatened by trade wars, as a result, the environment is likely to be increasingly litigious.
  • A shift in focus from brand status and services to efficacy, thereby providing high viability on investments. The demand for document review and legal research continues to grow significantly. In an age where customer-centricity and differentiation are vital, several players are increasingly examining cost-benefit trade-offs.

Market Segmentation by Providers

  • New Law Companies
  • Captive LPOs
  • Staffing/Recruiting and Contract Lawyer Companies
  • Others

Market Segmentation by Services

  • eDiscovery
  • Investigation and Litigation Support
  • Contract Management
  • Document Review and Coding
  • Legal Research
  • Regulatory Risk and Compliance
  • Others
  • Urban

Market Segmentation by End-users 

  • Law Firms
  • Corporations

Alternative Legal Service Providers Market in US – Dynamics

Companies in the US have, for quite long, had a higher proportion of legal spending than other countries in the rest of the world. Companies in the country spend 170% more on these services when pitted against global companies with banking, real estate, and technology topping the list of spends by industry. The high spends are attributed to the fact that the US has a heavier litigious climate. Apart from that, it is characterized by widely varying laws and complexities in every state driving up volumes in terms of legal advice required. Further, the pay of legal practitioners also tends to be higher in the country with expensive billable hours, demonstrating demand. Another indicator of the growth of the legal industry is the reversal of the decline of legal employment and law school applications in 2018, post years of flat or deteriorating levels.

Key Drivers and Trends fueling Market Growth:

  • Prevalence of Dissatisfaction with Law Firms
  • Legal Departments in Overdrive
  • Focus Shifts to Delivery
  • Blurring Lines Between Traditional and Alternative

Get your sample today! https://www.arizton.com/market-reports/alternative-legal-service-providers-market-united-states

Major Vendors

  • Allen & Overy
  • Axiom
  • Elevate
  • UnitedLex

Other vendors include - BlackStone Discovery, Clifford Chance, Consilio, Driven, Epiq, Everlaw, Exigent, Greenberg Traurig, Integreon, KLDiscovery, LegalZoom, Lawyers on Demand (LoD), Mindcrest, Reed Smith, Legility, Lumen Legal, Morae Global, Orrick, QuisLex, and Thomson Reuters.