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FiDeAL® Announces a Strategic Partnership with Outmatch to Strengthen Litigation Finance Consulting Services and Expand Operations in France

By Harry Moran |

Treviso – FiDeAL®, a leader in litigation finance consulting, is pleased to announce a new strategic partnership with Outmatch, a renowned French financial boutique specializing in M&A operations and in legal disputes resolution.

This collaboration marks a significant step in further strengthening FiDeAL’s litigation finance consulting services and in expanding its operations into the French legal market, one of the main European markets for complex legal disputes.

FiDeAL and Outmatch will combine their respective expertise to provide tailored solutions to French law firms and companies, supporting them with access to innovative financial tools and optimizing their legal strategies in high-profile litigation.

This partnership represents a milestone for both companies, opening new opportunities in the French market and offering a broader range of services to companies involved in complex disputes.

Commercial Regulatory Issues

International Legal Finance Association (ILFA) Welcomes New ELI Report – ‘Principles Governing the Third-Party Funding of Litigation’

The International Legal Finance Association (ILFA), the global voice of commercial legal finance, has welcomed the findings of the newly published European Law Institute (ELI) report ‘Principles governing the third-party funding of litigation’. 

The report, authored by UK High Court Judge Dame Sarah Cockerill and Professor Susanne Augenhofer, is the product of more than two years of investigative work to develop principles and guidance for the TPLF market, and represents a new, independent contribution to the legitimate and effective use of TPLF. 

Following the publication of the report, Neil Purslow, Chairman of the Executive Committee of ILFA, commented:

‘This new report, authored by seasoned legal observers, recognises that commercial legal finance increases access to justice for European businesses and consumers and provides ‘vital improvement in access to justice’ (pg.19) when made available. Contrary to the repeated claims of big business, funding helps level the playing field for those exercising their rights against multinationals with almost unlimited resources’. 

The report also cautions against imposing new regulations on the TPLF market. Instead, it advances a ‘complementary approach’ involving guidance to funders on issues to be taken into account before entering into a TPLF agreement, together with publishing a new Appendix drawing together the recommended minimum content of a funding agreement.

Purslow commented: 

‘ILFA agrees with the report’s conclusion that proscriptive one-size-fits-all regulation isn’t appropriate for a sector like ours. It risks funders ceasing to offer funding, inevitably leading to what the authors rightly identify as ‘serious access to justice issues’.’

The full report from ELI can be read online here. 

About ILFA

The International Legal Finance Association (ILFA) represents the global commercial legal finance community, and its mission is to engage, educate and influence legislative, regulatory and judicial landscapes as the global voice of the commercial legal finance industry. It is the only global association of commercial legal finance companies and is an independent, non-profit trade association promoting the highest standards of operation and service for the commercial legal finance sector. ILFA has local chapter representation around the world. For more information, visit www.ilfa.com and like us on LinkedIn and X @ILFA_Official. 

About ELI 

The European Law Institute (ELI) is an independent non-profit organisation established to initiate, conduct and facilitate research, make recommendations and provide practical guidance in the field of European legal development. The ELI secretariat is hosted by the University of Vienna, Austria.

The report team was led by Susanne Augenhofer (Professor of Law, Austria), Dame Sara Cockerill (High Court Judge, UK), and Henrik Rothe (Professor of Law, Denmark) (until July 2022). 

Commercial Regulatory Issues

NJ Appeals Court Rules Funding Agreements are Not Loans

By Harry Moran |

As the litigation funding industry has matured and the practice become more commonplace across the US legal system, most contentious debates revolve around issues of transparency or funder control over lawsuits. However, a recent complaint in New Jersey attempted to argue that a series funding agreement should be considered loans, only to have both the trial and appeals court reject these arguments in their entirety.

An article in Bloomberg Law highlights a decision handed down by the New Jersey Superior Court Appellate with the court ruling that litigation funding arrangements do not constitute ‘loans’ under state law. The ruling arose out of three funding agreements entered into between Covered Bridge Capital (CBC) and plaintiff Christine Ivaliotis between 2016 and 2019, before Ivaliotis filed suit against CBC claiming that it had engaged in “fraudulent lending practices and impermissibly purchasing an interest in prejudgment personal injury proceeds.” The appeals court affirmed the original trial court’s decision, which dismissed Ivaliotis’ complaint “because plaintiff has not shown she sustained a compensable "ascertainable loss" as the result of a CFA violation by CBC”.

The court’s ruling considered the plaintiff’s assertion that funding agreements were loans and therefore required the funder to be licensed by the Department of Banking and Insurance, with the court stating clearly that “this premise is wrong.” The appeals court cited federal precedent and noted that the “distinction between loans and the proceeds of litigation funding agreements has been judicially recognized.” In the damming conclusion to its ruling, the court found that Ivaliotis “lacks standing to call herself an "aggrieved consumer," both as a matter of law, a matter of equity, and common sense.”The full decision from the New Jersey court can be read here.

Case Developments Commercial

Parabellum Capital Funding ‘Daniel’s Law’ Cases in New Jersey

By Harry Moran |

Whilst there is constant debate and discussion over the level of transparency and disclosure that should be required for the involvement of litigation funders in cases, the state of New Jersey is demonstrating how these rules work in practice after a plaintiff disclosed that it anticipated using litigation funds in an ongoing series of lawsuits.

Reporting by Reuters highlights a recent court filing in the United States District Court for the District of New Jersey, where the plaintiff, Atlas Data Privacy Corporation, informed the court that it would soon be using funding provided by Parabellum Capital. The litigation funding was secured by Atlas Data Privacy to support over 140 lawsuits that it has been assigned and brought against businesses who have allegedly breached New Jersey’s Daniel’s Law, which allows public officials to protect against the release of their personal information to the public.

In its filing to the court, Atlas Data Privacy said that as New Jersey’s rules on funding disclosure “requires that a statement be filed promptly following the use of third-party litigation funds”, and because the firm “anticipates utilizing such funds shortly”, it was filing the letter to comply with Local Civil Rule 7.1.1. The two-page letter does not provide many details of Atlas’ funding arrangement with Parabellum Capital but confirmed that it was “non-recourse financing provided to Atlas, collateralized by litigation proceeds”. Unsurprisingly, the letter also confirmed that “the funder’s approval is not necessary for any litigation or settlement decisions in these actions.” 

Reuters’ article also includes comments from spokespersons for both Atlas and Parabellum, with the funder’s spokesperson saying that it was acting as “a passive financial partner of Atlas, which is playing an important role in enforcing compliance with one of the most meaningful privacy laws on record.”Atlas’ letter of disclosure to the court can be read in full here.

Commercial Regulatory Issues

US Judicial Committee to Study Disclosure of Litigation Funding

By Harry Moran |

With federal lawmakers following in the wake of some state legislatures in introducing draft legislation to impose new regulations on litigation funding, it is perhaps no surprise that the US judiciary has now seen fit to take a more proactive approach in examining the role of third-party legal funding in the country.

An article in Reuters covers the news that the U.S. Judicial Conference's Advisory Committee on Civil Rules agreed last week to begin a study into litigation finance, to ascertain whether a federal rule governing disclosure of third-party funding was necessary. The decision followed a panel meeting last Thursday in Washington, D.C., and notably comes shortly after over 100 companies signed a letter calling on the judiciary to introduce greater transparency measures for litigation funding. 

The chair of the Advisory Committee, U.S. District Judge Robin Rosenberg, said that the debate over third-party legal funding “is an important issue” and that it “is not going away.” Following the committee’s decision, a subcommittee will be created to study the issue but as the Reuters article highlights, this does not provide a timeline on when, or even if, a new rule governing disclosure would be introduced. U.S. District Judge John Bates, chair of the Committee on Rules of Practice and Procedure, seemed to make a distinction between the “theoretical problem” that litigation finance could pose, and the study’s purpose to uncover whether there were “actual problems”.

In response to the committee’s decision, Page Faulk, senior vice president of legal reform initiatives at the U.S. Chamber of Commerce Institute for Legal Reform, called on the judiciary “to move forward swiftly in adopting mandatory disclosure requirements.” In contrast, the International Legal Finance Association (ILFA) said that it welcomed “the opportunity to be a part of the conversation to demonstrate how legal finance is a valuable part of the legal economy and has not resulted in any of the negative outcomes that the U.S. Chamber has cut from whole cloth.”

Consumer

Legal-Bay Pre Settlement Funding Announces Settlement Resolution in BARD Hernia Mesh Lawsuits

By Harry Moran |

Legal-Bay LLC, The Pre-settlement Funding Company, announced today that there is finally some resolve on the horizon for hernia mesh litigants. Becton, Dickinson and Company, the parent company of BARD, has finally reached a settlement agreement on the thousands of lawsuits they've been battling for almost twenty years. The settlement will resolve cases in Rhode Island and the federal MDL in Ohio for plaintiffs who allege their hernia mesh devices were defective and caused physical injury.

While the exact terms of the settlement remain undisclosed, Legal Bay can report that BD has a product liability fund set aside for litigation purposes in the neighborhood of $1.7 billion. Analysts predict a large portion of that amount will be paid out to plaintiffs over multiple years. It should be noted that BD says the settlement is not an admission of wrongdoing and is prepared to defend itself against future lawsuits.

Chris Janish, CEO of Legal-Bay commented, "Legal Bay has been one of the few companies to fund hernia mesh from the beginning of this litigation. We applaud the lawyers who've been able to negotiate this global settlement, and will continue to assist plaintiffs who need their share of the money now rather than wait out the long process to receive their payout." 

If you need a lawsuit loan from your hernia mesh lawsuit, please apply HERE or call toll-free at 877.571.0405.

Attorneys anticipate that settlement amounts will be within the $50,000 to $100,000 range, but some plaintiffs have been awarded millions. Payout amounts vary greatly, and will likely use a "matrix" to determine damages, based upon the severity of the plaintiffs' injuries. Also, because of the variables from case to case, there is no set precedent for how much a plaintiff will receive, if they receive anything at all. However, with this latest court ruling, most plaintiffs—even those with newly-filed cases—can expect to see quick outcomes in the near future with favorable results.

Recent settlement examples:

  • $4.8 million verdict for Rhode Island plaintiff Paul Trevino in a state court trial in 2022
  • $255,000 verdict in favor of the plaintiff in the second bellwether trial in 2022
  • $500,000 verdict in favor of the plaintiff in the third bellwether trial in 2023

The preceding list comprises only a handful of the many verdicts against hernia mesh companies, and there are thousands more still awaiting their day in court. Nevertheless, Legal-Bay stands ready to help plaintiffs in financial need obtain settlement loans so they can wait out the time it will take to resolve at trial. 

Legal-Bay is one of the leading lawsuit loan funding companies, offering a fast approval process and some of the best rates in the industry. They can offer immediate cash in advance of a plaintiff's anticipated monetary award. The non-recourse lawsuit loans—sometimes referred to as loans for lawsuit or loans on settlement—are risk-free, as the money does not need to be repaid should the recipient lose their case. Therefore, the settlement loan is less of a loan and more like a cash advance.

Anyone who has an existing lawsuit and needs cash now can apply for loan settlement and receive a quick payout, normally within 24-48 hours. There are no income verification forms or credit checks required. If you haven't yet filed suit, Legal-Bay can put you in touch with an attorney who specializes in hernia mesh cases.If you require an immediate cash advance loan settlement from your hernia mesh lawsuit, please visit the company's website HERE or call 877.571.0405 where skilled agents are standing by to hear about your specific case.

Commercial Legal Innovation

Burford Capital Research Finds Cautious Optimism Towards AI and Legal Tech

By Harry Moran |

The growth in Artificial Intelligence (AI) solutions, and the parallel surge of investment into startups promoting their own unique tools, has continued to make waves throughout 2024. However, research by one of the world’s leading funders suggest that whilst the supply of these next-gen solutions might be reaching new heights, the actual demand for these technologies among legal and finance professionals is someway behind.

An insights article from Burford Capital analyses the evolution of, and response to, legal technology solutions and the incorporation of AI tools into these legal tech offerings. The article builds on research conducted by Burford into the attitudes of senior legal and finance professionals toward legal technology and AI, surveying these executives to find out how open they are to adopting these tools and what their concerns are. 

Burford’s research found that “there is a clear gap between the anticipated benefits and the current financial commitment to these tools”, with in-house counsel and CFOs taking a cautious approach to investing in AI. Perhaps the most telling statistic from the research was that 89% of the surveyed GCs and CFOs said “their business will be investing less than 5% of their legal budget into this category within the next year.”

However, Burford’s survey of these professionals also found that the desire to adopt these new legal technology solutions varies between industries. When asked whether they expect to invest more than 5% of their legal budget in legal data analytics and AI across the next 12 months, 20% of GCs and CFOs in the Retail sector, and 18% in the Healthcare and Pharmaceutical industries answered affirmatively. 

In contrast, only 8% of respondents from the Construction & Real Estate, Energy, Mining and Transportation & Supply Chain sectors said they expected to spend more than 5% of their budget. The least enthusiastic of all sectors was the Food industry, where only 5% of those surveyed said they would be investing beyond that benchmark.

Burford concludes its analysis with a note of caution for legal tech enthusiasts by saying: “As AI continues to develop it may eventually play a more significant role in legal technology, but for now, human expertise remains indispensable in navigating the complexities of commercial disputes and legal finance.”

Commercial Regulatory Issues

European Law Institute Publishes Report on Principles Governing the Third Party Funding of Litigation

By Harry Moran |

Whilst legislatures in both the UK and US are in the process of weighing the best path forward for the state’s role in the regulation of litigation funding, one non-profit organisation has produced a report offering its own framework and guiding principles for the European legal funding market.

A new post from the European Law Institute (ELI) announced the publishing of its Principles Governing the Third Party Funding of Litigation (TPFL), which the non-profit says are “intended to constitute a blueprint for guidance, decisions or light-touch regulation of the burgeoning Third Party Litigation Funding (TPLF) market.” The 103-page draft report is designed to provided principles that will “enhance transparency, fairness, and accessibility in litigation funding”, with ELI stating that it “encourages jurisdictions to incorporate these principles” as a flexible framework for the third-party funding market.

The report was co-authored by Dame Sara Cockerill, Judge of the High Court of England and Wales, and Prof Dr Susanne Augenhofer from the Universität Innsbruck. The report also acknowledges contributions from its advisory and consultative committees, which included leading figures from European law firms, litigation funders, and law schools.

The report considers both the benefits that the industry promotes such as access to justice, whilst also weighing the concerns of those who are more critical of the current state of third party litigation funding so that “a balance can be struck between access to justice and the public interest in the due administration of justice.” The report includes 12 key principles for the “conduct of funders and funded parties”, which cover a range of issues including transparency, capital adequacy of funders, and control over proceedings.

ELI’s report also lays out additional resources such as “a suggested minimum content of TPLF agreements”, as well as exploring more nuanced situations involving outside funding such as arbitration and insolvency proceedings.

The full draft of ELI’s report can be found here. 

According to the announcement, an edited version of the report with an enhanced layout will be published on ELI’s website soon, with a series of webinars covering the findings of the report to follow.

Community Spotlights

Community Spotlight: Andi Mandell, Partner and Co-Head of Schulte Roth & Zabel’s Tax Group

By John Freund |

Andi Mandell is a partner and co-head of Schulte Roth & Zabel’s Tax Group, where she advises on the tax aspects relating to structured finance, securitization and fund formation. Her practice is focused on esoteric assets, including litigation funding, structured settlements, lottery receivables, secured and unsecured consumer loans and timeshare loans.

Andi has over 30 years of experience providing skilled tax advice to the securitization industry. In addition to her work in the esoteric space, Andi is recognized as an authority in the securitization of residential and commercial mortgage-backed securities and real estate structured finance, including the structuring of REO-to-rental financings, servicer advance facilities, debt re-packaging, securitization of non-performing and re-performing mortgage loans, re-securitizations, distressed asset funds and MSR purchases and sales.

Andi works with other industry leaders who are shaping the securitization industry as a member of the Board of Directors of the Structured Finance Association (SFA), and is serving her fifth year as the co-chair of the Tax Policy Committee.

Company Name and Description: With a firm focus on private capital, Schulte Roth & Zabel LLP is comprised of legal advisers and commercial problem-solvers who combine exceptional experience, industry insight, integrated intelligence and commercial creativity to help clients raise and invest assets and protect and expand their businesses. The firm has offices in New York, Washington, DC and London, and advises clients on investment management, corporate and transactional matters, and provides counsel on securities regulatory compliance, enforcement and investigative issues.    

Company Website: https://www.srz.com/

Year Founded: 1969  

Headquarters: New York, New York, U.S.A.  

Area of Focus: Tax, Finance, Structured Finance  

Member Quote: "Navigating the intricacies of litigation funding requires a deep understanding of both the financial and the legal landscape. As a tax lawyer, my role is to ensure that funding arrangements are properly structured to allow a broad range of investors to participate as funders in this asset class in a tax efficient manner. Litigation funding presents unique tax challenges to non-US investors and tax exempts and having the tax expertise to help guide our clients allows for greater participation in this space.”