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Community Spotlights

Community Spotlight:  Danny Kinnear, Founder, EAKO Capital

By Danny Kinnear |

Danny Kinnear, founder of EAKO Capital, leverages his experience with top financial institutions like Deutsche Bank, Nomura, and Litigation Capital Management to offer innovative financial solutions to corporates, law firms, and funders.  EAKO partners with Google Ventures and Visa-backed entities, as well as major banks, to provide:

  • Rapid bank account setup (48-72 hours)
  • Diverse funding options (on both a recourse and non-recourse basis)
  • Competitive foreign exchange services (a demonstration of how much we can save you, look here)
  • Forward credit lines for risk management hedging purposes
  • FX options and structured solutions
  • Risk management consultancy to resolve complex situations – through our extensive network we can find solutions to most currency problems

Company Name and Description:   EAKO Capital helps law firms, companies, and asset managers access a range of funding and financial risk management solutions.

Company Website:  www.eakocapital.com

Year Founded:  2022

Headquarters:   Supporting clients globally out of London, United Kingdom

Area of Focus:  Comprehensive financial support through multi-currency accounts, currency and interest rate hedging, cross-border & mass payment solutions, and the provision of access to funding, including litigation finance.

Member Quote: “EAKO combines deep banking expertise with technology to deliver intelligent, cost-effective currency and funding solutions to business and asset managers operating internationally.”

Community Spotlights

Community Spotlight: Aaron Winston, Strategy Director, Express Legal Funding

By Aaron Winston |

Aaron Winston is an author and the Strategy Director at Express Legal Funding, bringing over a decade of experience in the consumer finance industry. In recent years, Aaron has risen to be recognized as an expert in SEO and law firm content marketing, being featured in multiple case studies.

Aaron leverages his deep understanding of digital strategies to enhance Express Legal Funding's online presence and brand authority with hundreds of thousands of unique website visitors annually. His approach combines analytical precision with creativity, making him a thought leader in the fields of pre-settlement funding and search engine marketing.

Company Name and Description: Express Legal Funding is a nationally recognized and trusted pre-settlement funding company and brand based in Plano, Texas, and is dedicated to providing fair, fast, and affordable financial support to claimants bringing personal injury and other tort claims.

Company Website: https://expresslegalfunding.com/

Year Founded:  2015

Headquarters:  5717 Legacy Drive, Suite 250, Plano, Texas 75024

Area of Focus: Pre-settlement Funding, SEO, Content Marketing, Law Firm Digital Marketing and Websites

Member Quote: Can a pre-settlement funding company really be a household name if most people aren't even aware the industry exists?

Commercial Regulatory Issues

EU Stakeholder Survey Aims to Inform Litigation Finance Policy

By Tom Webster |

The following is a contributed piece by Tom Webster, Chief Commercial Officer at Sentry Funding.

An EU stakeholder survey is gathering practical information on the operation of third-party funding across the European Union. The study, ‘Mapping Third Party Litigation Funding (TPLF) in the European Union’, was given an extended deadline of 3 September 2024.

Conducted by Civic Consulting and the British Institute of International and Comparative Law (BIICL), the research will help the European Commission analyse the legal framework and practical operation of litigation funding in the EU and make policy decisions in the area.

The survey seeks views from stakeholders with experience of third-party funding, including funders, lawyers, consumer organisations, other businesses, public authorities, members of the judiciary and others. As well as questions seeking to discover the extent of funding activity in each EU jurisdiction and typical levels of investment, it also asks for views on both positive and negative effects of litigation funding.

In relation to positive effects, the survey asks a number of questions including whether respondents have observed that current litigation funding practices lead to better access to the courts for parties who could not litigate without funding; whether there is a deterrent effect on companies that serve consumer markets due to the threat of mass claims relating to unsafe products or unfair practices; and whether respondents have seen a filtering effect on claims as those with a low chance of success will not be funded.

In relation to negative effects, questions include whether respondents have observed conflicts of interest; undue influence on decisions such as settlements and appeals; and the funding of frivolous claims.

The EU survey is just one of a number of projects currently examining the litigation funding sector. Also focusing on the EU market, the European Law Institute is undertaking a substantial research project with the aim of establishing a set of principles to identify the issues that should be taken into account when entering into litigation funding agreements.

Meanwhile in the UK, the Legal Services Board recently published a report on litigation funding in England and Wales (https://legalservicesboard.org.uk/wp-content/uploads/2024/05/A-review-of-litigation-funding.pdf), and the Civil Justice Council has embarked on a wide-reaching review of the sector (https://www.judiciary.uk/related-offices-and-bodies/advisory-bodies/cjc/current-work/third-party-funding/) which will include recommendations in relation to the future regulation of the industry.

Community Spotlights

Community Spotlight: Michelle Silvers, Chief Executive Officer and Director, Court House Capital

By Michelle Silvers |

Michelle Silvers is Chief Executive Officer and a Director of Court House Capital and leads the company’s business strategy, growth and operations across geographic markets. She oversees stakeholder relations with capital investors and all decisions pertaining to the company’s investment portfolio.

Michelle is a highly-respected leader in litigation funding. She co-founded the litigation funding industry in Australia in 1999 and has over 30 years’ combined funding and legal experience across commercial dispute resolution, insolvency, insurance and collective redress (class actions).

Michelle has played a crucial role in funding more than 200 legal disputes and is passionate about structuring capital and risk management solutions for clients and helping claimants gain access to justice.

In 2019 Michelle joined Court House Capital, quickly establishing the business as a funder of choice in Australia and New Zealand. Previously, she served as Managing Director and CEO of Litigation Lending Services Limited, where she pioneered portfolio funding and grew the business to become one of the most successful funders in the region. Her career also includes senior roles at leading international funders (Augusta Ventures and IMF Bentham, now Omni Bridgeway), global insurance firms (AMP, FAI General, Lawcover) and private legal practice (DLA Piper).

Michelle is a co-founder and Director of the Association of Litigation Funders of Australia (AALF) and is a regular speaker and commentator on industry developments. She holds a Bachelor of Arts and Bachelor of Laws from the University of New South Wales and is a Director of Court House Capital Management Limited.

Company Name and Description: Court House Capital is a leading litigation funder focused on cases in Australia and New Zealand. Court House Capital was established with a mission to provide financial and strategic support to parties seeking capital, risk management and access to justice. Our team is led by industry founders, with Australian based capital, and is renowned for expertise, agility and collaboration.

Company Website: courthousecapital.com.au

Year Founded:  2019

Headquarters: Sydney

Area of Focus: Litigation Finance

Member Quote: We offer cost and risk mitigation strategies for commercial clients and ‘a level playing field’ for those who cannot afford to pursue justice themselves. It is an honour to be co-founders of an industry that provides access to justice for so many, and to be the funder of choice for claimants and professional advisers. Our financial resources, industry network and knowledge has helped many claimants achieve successful outcomes.

Commercial People Moves

Colin Everson Joins Gallagher as Head of Litigation and Arbitration Risk

By Harry Moran |

In a post on LinkedIn, Colin Everson announced that he has joined the global insurance brokerage and risk management firm, Gallagher, as Head of Litigation and Arbitration Risk. Everson joins Gallagher from Kroll, where he served as managing director, having also spent over three years at Duff & Phelps as an associate managing director.

Gallagher’s dispute resolution insurance services cover a wide range of products including after-the-event insurance, capital protection insurance, judgment preservation insurance, and arbitration default insurance. As Everson highlighted in his announcement, Gallagher was ranked Band 1 in the Chambers & Partners guide for dispute resolution insurance brokers.

More information about Gallagher’s dispute resolution insurance practice can be found here.

Announcements Commercial

Manolete Partners Announces Audited Results for the Year Ended 31 March 2024

By Harry Moran |

Manolete (AIM:MANO), the leading UK-listed insolvency litigation financing company, today announces its audited results for the year ended 31 March 2024. 

Steven Cooklin, Chief Executive Officer, commented: 

"These annual results show that Manolete has now recovered strongly from the UK Government's suppression of the UK insolvency sector that prevailed during the Covid period. The Company has returned to profitability and has continued its track record of consistent operational cash generation. That has been driven by a record number of 251 case completions in FY24.

The trading results for the new financial year, which commenced on 1 April 2024, clearly show that this positive momentum has continued: year to date, new case enquiries are running 22% ahead of FY24 and our in-house legal team has already completed 116 cases with an aggregate value of £11.8m (compared to this stage last year, where we had completed 93 cases for a total value of £6.3m). This is also reflected in our gross cash receipts where we have already collected £10.3m in the first five months of this financial year, compared to £8.7m for the whole six-month, first half period of the previous financial year.

"Widely reported, challenging, multiple, macro-economic factors including: high interest rates, persistent inflationary threats, stretched Government balance sheets and global conflicts, provide strong tailwinds and significant momentum for further growth. As the clear market leader in the UK insolvency litigation finance sector, the Company is exceptionally well positioned to take advantage of these conditions". 

Financial (statutory and non-statutory) highlights: 

  • Realised revenues on completed cases were £24.2m, a decrease of 10% (FY23: £26.8m) although FY23 included an exceptionally large, funded case completion of which £4.9m was recorded in realised revenue (total settlement £9.5m).
  • Adjusting for that single exceptional case, FY24 realised revenues were 11% higher than FY23. 
  • 92% of total revenues represented by realised revenues on fully completed cases (FY23: 129%). 
  • Increase in the valuation of the cartel cases contributed £0.1m to gross profit in FY24 (FY23: £1.2m). 
  • EBIT increased to £2.5m, which represented a positive change from an EBIT loss of £3.1m in the prior year. 
  • Gross cash receipts from completed cases were £17.7m, a decrease of 34% (FY23: £26.7m, however, FY23 included the same one-off exceptionally large case completion, referred to above, which delivered gross cash receipts of £9.5m. Excluding that case, gross cash receipts rose by 3%). 
  • The Company's retained share of gross cash receipts from completed cases (after all legal costs and payments to Insolvent Estates) was £10.8m, a decrease of 18% (FY23: £13.1m) but again, the only reason for the decrease was the £9.5m exceptional case in FY23. 
  • Cash generated from operations (after all completed case costs and all overheads but before new case investments and taxation) was £5.0m (FY23: £8.0m). 
  • As at 31 March 2024, the Company had cash balances of £1.4m and borrowings of £13.7m resulting in a net debt of £12.3m (FY23: £0.6m and £10.5m, respectively and therefore a net debt of £9.9m). 

Operational highlights: 

  • A record number of new case investments in UK insolvency cases, an increase of 18%: 311 in FY24 (FY23: 263). 
  • A record number of 251 cases were completed in FY24 (FY23: 193 cases), with an average duration per case of 13.2 months (FY23: 15.5 months), generating a Money Multiple of 1.9x (FY23: 1.9x) and an IRR of 131% (FY23: 131%) (based on unaudited internal management information). 
  • As previously reported, following the ending in April 2022 of the Covid-related emergency legislation to suppress UK insolvencies and the withdrawal of very substantial financial support to UK businesses by the previous Government, the number of UK insolvencies have been at record high levels. The first wave of these insolvencies has predominantly been the smaller and weaker "zombie" companies. Only in recent months have the larger company insolvencies, typically by way of Administration, returned to levels seen before the Covid pandemic. This has resulted in record high numbers of cases taken on by Manolete but the average case size is smaller than had been the case, pre-pandemic. By way of comparison: FY21 was the trading year that best reflects the completion values of cases acquired and funded before the Covid-19 impact (this is because, on average, cases take around 12 months to complete). In FY21, audited realised revenues were £24.4m from 135 cases: an average of £180k per case, which is close to double the average for FY24 of £96k. 
  • ROI of 116% and Money Multiple of 2.2x from 933 completed cases since inception (based on unaudited internal management information). 
  • Average case duration across the full lifetime portfolio of 933 completed cases is 12.7 months · 19% increase in live cases: 418 in process as at 31 March 2024 (351 as at 31 March 2023)

Current Trading 

  • The first five months of FY25 have been buoyant:
    • Highest ever number of new case enquiries year to date: 348 (FY24: 286). 
    • 103 new case investments, which is broadly tracking the record 146 new case investments for the whole first six months of FY24. 
    • 116 case completions at an aggregate value of £11.8m (FY24: 93 case completions at a total value of £6.3m). o Gross cash receipts from previously completed cases is £10.3m, compared to £8.7m for the whole first six months of FY24. 
    • Net cash receipts (after all payments to insolvent estates and all associated external legal costs) are £6.5m year to date for FY25, compared to £4.6m for the whole first six months of FY24. 

Outlook 

  • Given that the number of corporate insolvencies in the UK remain at record highs, the Company can look forward to a sustained period of growth. A strong recovery in the number of larger case investments signed in the second half of FY24 is also an encouraging indicator of future business strength.

A copy of the annual report and accounts will be available on the Company's website shortly and will be posted to shareholders in due course.

The full announcement and results can be read here.

Commercial

Deminor Publishes Insights on AI and the Economics of Litigation Funding

Deminor has published a pair of articles into specific aspects of legal funding. The first, authored by senior legal counsel Patrick Rode, explores the topic of ‘AI in Litigation Funding in the Context of the EU AI Act’. The second, written by investment associate Aliki Halcoussi, covers ‘The Economics of Litigation Funding: Assessing the Financial Viability of Legal Dispute Investments’.

Rode’s article first examined the potential use cases for AI in litigation funding, including case evaluation and risk assessment, predictive analytics, automation of decision-making, and due diligence. Then, Rode provided an overview of the impact of the European Union’s AI Act which came into force this month, looking at the regulatory requirements that will be imposed on the use of AI systems.

Finally, Rode offered four potential strategies for funders to take a pro-active and strategic approach to dealing with comprehensive legislation, which included investing in compliance infrastructure, collaborating with leading AI experts, prioritising ethical AI systems development, and engaging in active discussions with EU regulators.

Halcoussi’s insights piece provided an overview of the ‘thorough and complex process’ through which funders are able to assess the viability of investing in individual claims or portfolios of cases. Halcoussi explained that funders like Deminor begin with rigorous data collection that can then be used to form a financial framework which can be used to ‘accurately calculate the relevant exogenous factors that might affect the recovery amount.’

The funder’s financial modeling also incorporates an analysis of the potential range of costs involved in that specific case, balancing it against legal budgets and the expected duration of the legal proceedings. In order to ensure that these investments are profitable for the funder, the level of risk must be balanced against the potential size of the recovered proceeds to calculate the funder’s required return.

Rode’s article can be read here. Halcouissi’s article can be read here.

Commercial People Moves

HFW’s Restructuring and Insolvency Practice Hires Australian Litigation Funding Pioneers

By Harry Moran |

An announcement from HFW revealed that the law firm has made two hires in its corporate restructuring, insolvency and commercial litigation practice, with the appointment of partners Paul Buitendag and Rena Solomonidis in the firm’s Melbourne office. Both partners have joined HFW from Johnson Winter Slattery, bringing combined expertise in complex commercial disputes as well as experience in working with litigation funders.

Gavin Vallely, managing partner at HFW Australia, described Buitendag as “one of Australia’s preeminent insolvency and commercial litigation practitioners” and highlighted his renown for “litigation funding in Australia, including the introduction of ATE insurance as an alternative form of security for costs in litigation funding agreements.” Vallely praised Solomonidis as “a leading practitioner in commercial litigation, corporate insolvency and restructuring, as well as in prosecuting and defending class actions”, and noted that the pair “have worked with funders in the USA, UK and Australia in significant disputes.”

Buitendag highlighted HFW’s work in London as “an important centre not only for litigation funders, but also for brokers and insurers who are developing innovative, insurance-backed litigation funding products.” Whilst Solomonidis praised HFW’s “international reach”, which would be able to “support our practice at a time of increasing insolvency activity in Australia that regularly involves assets, investors and alternative lenders in offshore locations.”

Case Developments Commercial

FORIS AG Announces Settlement in Dispute Over Deutsche Bank’s Postbank Takeover

By Harry Moran |

Whilst third-party funding is less commonly seen within the various European Union jurisdictions, a landmark case in Germany that dates back to a 2010 takeover of Postbank has finally achieved a settlement according to the litigation funder that provided the financial backing for the claim.

An announcement from German litigation funder FORIS AG revealed that a settlement has been reached in the legal proceedings brought against Deutsche Bank related to the bank’s takeover of Postbank in 2010. FORIS had financed two claims that represented a total of 19 Postbank shareholders, and following the agreement with Deutsche Bank, all that remains is for the plaintiffs to decide whether or not to accept the settlement.

The claims which were first brought in 2017 focused on allegations that Postbank shareholders had been underpaid for their shares, when they were forced to accept 25 euros per share. The settlement provides for each shareholder in the claims to receive an additional payment of 31 euros per Postbank share they held at the time of the takeover, with the total value of the dispute estimated at around 4.5 million euros.

Dr. Anke Warlich, senior legal counsel at FORIS, said that the funder was pleased with Deutsche Bank’s willingness to settle and that there was already a high approval rate for the settlement amongst the shareholders whose claims FORIS has financed. Warlich emphasised that without third-party litigation funding, the risk and costs involved in pursuing such a claim would have meant that the injured parties would not have been able to take on these legal proceedings.

The plaintiffs in the claims were represented by the law firms AWARR.legal/Schirp &Partner and Nieding & Barth.