Gain valuable insights into how investors are evaluating litigation funding opportunities.  This expert panel discussion explores the key metrics, trends, and considerations driving investment decisions in the evolving litigation finance landscape. This session covers topics such as:

• What financial metrics are they most interested in?
• How critical are issues like duration risk and regulatory pressure in their decision-making?
• What can fund managers do to best position themselves to secure an investment?
• And much more!

Video Passcode: nS$D6miJ

The following post was contributed by Jeff Manley, Chief Operating Officer of Armadillo Litigation Funding.  In litigation finance, especially in mass torts and class actions, trust and success hinge on unwavering ethical practice and legal compliance. For attorneys and financial professionals navigating this complex field, a steadfast commitment to upholding ethical standards is not just ideal—it's imperative. This article delves into the crucial considerations that must guide the intricate relationship between legal funding and professional integrity. The Importance of Law Firm Independence Law firm independence is paramount when it comes to funding arrangements, particularly within the complex sectors of mass torts and class actions. The imperative to maintain this independence while engaging with external funding sources necessitates a sophisticated approach to partnership. Firms must ally with financiers who not only understand the legal and ethical implications inherent to such cases but who also value the firm's autonomy in decision-making processes. A skilled financier can guide firms through the nuances of these arrangements, ensuring that the terms of any financial agreement bolster the firm’s ability to act in its clients' best interests without external influence. Drafting agreements with a clear delineation of roles and expectations, without compromising the firm’s command over legal strategy, is not solely a matter of due diligence—it's a strategic endeavor to uphold the integrity and efficacy of the legal services provided. Managing Conflicts of Interest Managing conflicts of interest requires a collaborative effort between law firms and their funding partners. Identifying and mitigating potential conflicts at the intersection of funders, firms, and clients necessitates a united approach. Together, firms and funders should conduct thorough reviews of funding arrangements to spotlight areas where interests might diverge, ensuring that neither the firm's allegiance to its client nor the client's best interests are compromised. Adopting a joint strategy that aligns with ABA Model Rule 1.7 on conflicts of interest can fortify this alliance. This partnership approach to conflict management might include establishing shared guidelines for conflict checks, mutual disclosures to involved parties, and embedding protective measures in funding agreements that prioritize client outcomes. A cooperative oversight mechanism, possibly in the form of a committee comprising representatives from both the firm and the funder, can serve as a vigilant guardian of ethical integrity and client dedication, fostering a proactive culture of transparency and ethical vigilance. Crafting of Finance Agreements Moving into the structuring of financing agreements, it's vital that financiers and law firms unite to craft solutions (and operating agreements) that are ethically grounded and legally sound, starting with shared due diligence. Both parties engage in a transparent exchange to ensure all legal and ethical considerations are meticulously evaluated, laying a groundwork that prioritizes the client’s best interests and compliance with regulations. The agreement's structuring phase is an exercise in precision, balancing financial objectives with stringent ethical standards. Following the execution of the agreement, a concerted monitoring effort is essential to ensure ongoing compliance and address any ethical issues proactively. This cooperative stance not only fosters trust and transparency between the financier and the firm but also upholds the dignity of the legal profession and the rights of the clients they serve. This endeavor necessitates guidance from a trusted and sophisticated financier, ensuring that the partnership is built on a foundation of expertise and integrity. Regulatory Compliance Navigating this domain requires acute awareness of both state and federal regulations. This environment demands that law firms and financiers possess a deep understanding of the legal intricacies that define their operational landscape. The diversity of regulations across jurisdictions necessitates a partnership with well-respected funders, who bring sophisticated guidance to the table. Their expertise is invaluable in steering through the complexities of compliance, ensuring that practices are not only current but also anticipatory of the legal field's dynamic evolution. The future of litigation finance hinges on adaptability to regulatory changes, which are increasingly influenced by the sector's growing recognition and its impact on access to justice. The call for enhanced clarity in regulations and the push for stringent disclosure practices indicate a trend towards standardization across the board. Law firms, guided by seasoned financiers, must remain vigilant and adaptable, ready to adjust their strategies to maintain compliance and ethical integrity. This proactive stance is crucial not just for navigating today's regulatory challenges but also for shaping the future of ethical litigation finance. Conclusion In the rapidly shifting landscape of litigation finance, the value of a partnership with a well-respected financier cannot be overstated. Such collaborations are critical not only for steering through the regulatory complexities but also for shielding a firm against potential legal liabilities, including malpractice claims. As the industry continues to evolve, the guidance of experienced financiers becomes an indispensable asset, enabling law firms to anticipate changes, adapt strategies, and maintain compliance. This partnership does more than protect; it empowers firms to thrive amidst challenges, ensuring that their commitment to justice and client service is upheld. In the end, the journey through the ethical and regulatory intricacies of litigation finance is one best undertaken with a trusted financier by your side, crafting a future where the legal profession and its principles stand resilient.

The following article was contributed by Eric Schuller, President of the Alliance for Responsible Consumer Legal Funding (ARC). There has been a lot of discussion if Consumer legal funding is a loan and thereby creates debt for a consumer Consumer legal funding, sometimes called litigation funding or lawsuit funding, provides cash upfront to plaintiffs, to be used for household needs, which are involved in legal proceedings in exchange for a portion of the eventual settlement or judgment. It doesn't create debt like a loan from a bank or credit card, these distinctions contribute to its classification as a unique financial product rather than a loan or debt.

• Non-recourse nature: Unlike loans, where the consumer is personally liable for repayment regardless of the outcome, consumer legal funding is non-recourse. This means that if the plaintiff loses their case, they are not obligated to repay the funding. The repayment is contingent upon the success of the lawsuit.
• No monthly payments: In a loan, borrowers usually make monthly payments to repay the principal amount plus interest. With consumer legal funding, there are usually no monthly payments required. Instead, repayment only occurs if and when the case is settled or won, and the repayment is often structured as a lump sum.
• Risk sharing: Consumer legal funding providers assume a significant amount of risk by providing funds to plaintiffs who may not ultimately win their case. Unlike lenders who typically assess creditworthiness and require collateral, consumer legal funding companies evaluate the strength of the case and base their decision on the likelihood of success and not the creditworthiness of the consumer.
• Not regulated as loans: Consumer legal funding is often subject to different regulations than loans. While loans are typically governed by banking and lending laws, consumer legal funding has its own set of regulations that ensures consumers are protected and the product is offered in a responsible manner.

Some of the other key differences between consumer legal funding and debt from a loan is in how repayment works. With a loan, the consumer borrows money and agrees to repay it with interest, regardless of the outcome of the situation, creating debt. However, with consumer legal funding, repayment is contingent upon the success of the case. If the consumer loses their case, they will not have to repay the funding. But if they win, they will have to pay back the amount funded, with fees that are known upfront. So, therefore consumer legal funding doesn't create debt. Unlike Consumer legal funding, some loans can put consumers in a cycle of debt. The term cycle of debt refers to a pattern where individuals or households become trapped in a recurring pattern of borrowing money to meet financial obligations, only to find themselves in even greater debt over time. This cycle often involves:

• Initial Borrowing: The cycle typically begins with an initial borrowing of money, such as taking out a loan, using a credit card, or obtaining other forms of credit to cover expenses or emergencies.
• Accumulation of Interest and Fees: As time passes, the borrower may struggle to make timely payments on their debts, leading to the accumulation of interest charges, late fees, and other penalties.
• Financial Strain: The increasing debt burden can put a strain on the borrower's finances, making it difficult to cover basic living expenses and other financial obligations.
• Additional Borrowing: To address their financial difficulties, borrowers may resort to additional borrowing or using high-cost forms of credit, such as payday loans or cash advances, to make ends meet.
• Repayment Challenges: The cycle continues as the borrower struggles to keep up with mounting debt payments, leading to further financial stress and the need for more borrowing.
• Escalating Debt: Without significant changes in financial habits or circumstances, the debt continues to escalate, with the borrower owing more money than they can realistically repay.

Breaking the cycle of debt often requires proactive steps such as budgeting, reducing expenses, increasing income, seeking financial counseling, and finding ways to pay down debt strategically. It may also involve negotiating with creditors, consolidating debts, or exploring debt relief options such as debt settlement or bankruptcy. Consumers who use Consumer legal funding are never placed in a cycle of debt. Consumer legal funding has many other positives to a consumer besides not placing them in debt.

• Immediate Financial Assistance: Consumer legal funding provides plaintiffs with immediate cash to cover living expenses, medical bills, legal fees, and other costs associated with their lawsuit. This can be particularly helpful for individuals facing financial hardship due to their inability to work or other circumstances related to their legal case.
• Non-Recourse: Consumer legal funding is non-recourse, meaning that if the plaintiff loses their case, they are not obligated to repay the funding. This reduces the financial risk for the plaintiff, as they only repay the funding if they win their case.
• Leveling the Playing Field: Consumer legal funding can help level the playing field in legal disputes by providing plaintiffs with the financial resources to pursue their case effectively. This is particularly beneficial for individuals who are up against well-funded defendants or corporations.
• No Upfront Costs: Unlike loans, consumer legal funding does not require upfront payments or monthly repayments. Instead, repayment is structured with a known outcome and amount.

Overall, consumer legal funding can be a valuable resource for plaintiffs in need of financial assistance during legal proceedings without putting them in debt. Eric Schuller President Alliance for Responsible Consumer Legal Funding (ARC)

As the premier litigation finance conference renowned for its thought leadership and networking opportunities, LITFINCON is proud to announce its expansion to Los Angeles in September 2024. LITFINCON Los Angeles promises to uphold its tradition of excellence, offering attendees exclusive networking events, informative and engaging panel discussions, and unique insights into the evolving landscape of litigation finance through both a legal and financial lens. Attendees include a diverse array of professionals, including litigators, general counsel, law firm partners, funders, investors, insurance professionals, and esteemed members of the judiciary. Among the hallmarks of LITFINCON is the Judicial Panel, featuring distinguished jurists who will offer invaluable perspectives on the intersection of law and finance. LITFINCON Los Angeles is honored to announce these participating jurists with additional jurists to be announced:

• The Honorable Patrick Bumatay of the United States Court of Appeals for the Ninth Circuit
• The Honorable Charles Eskridge of the United States District Court for the Southern District of Texas
• The Honorable Taylor McNeel of the United States District Court for the Southern District of Mississippi

The Judicial Panel will be moderated by Lauren J. Harrison, Vice President & Investment Counselor of Law Finance Group. "We want to thank our distinguished panel of jurists for taking time from their busy day jobs to share their views about our industry's work. I was privileged to begin my legal career by clerking for two federal judges, so our firm's respect for the public service and dedication of members of the judiciary is deep and sincere," says Mani Walia, Managing Partner at Siltstone Capital. LITFINCON Los Angeles's venue is The Maybourne Beverly Hills, a symbol of West Coast elegance, perfectly located adjacent to Rodeo Drive. Guests can indulge in top-tier dining and services, staying at Tatler's 2023 selection for "Best City Hotel." Registration for LITFINCON Los Angeles 2024 is now open, with early bird discounts available for a limited time. Don't miss this opportunity to be part of the premier event shaping the future of litigation finance. If you are interested in sponsorship opportunities, please reach out to Ally Herebic at allyson.herebic@siltstone.com. Siltstone Capital, the organizer of LITFINCON, is a top-tier niche alternative capital provider that provides funding solutions for litigants, law firms, and legal teams, aiming to support plaintiffs with the financial resources to assert and protect their rights. Learn more about Siltstone Capital at www.siltstone capital.com. For further details about LITFINCON Los Angeles, please visit our website at www.litfincon.com.

Many examples of funded litigation involve high profile companies or sovereign states, with alleged scandals and injustices that can quickly dominate headlines. However, an ongoing European legal action may stand out above the rest, with a story so eventful that it sounds as if it could have been lifted from a Hollywood script, as a litigation funder is supporting a family’s efforts to recover stolen paintings worth hundreds of millions of euros. A press release from the Khatib family provided an update on its legal battle to recover valuable paintings that were stolen from their collection, as French bailiffs and police conducted a raid on a storage facility in Paris. The raid was authorised by court orders issued in Paris, which follows the same pattern as raids conducted by German authorities following court orders issued in Frankfurt. The Paris raid reportedly recovered a ‘large number of paintings belonging to a collection of works of Russian Avantgarde stolen from the Khatib family.’ These raids are the result of a legal case that began following the December 2019 theft of around 1,800 paintings, valued in the hundreds of millions of euros, from Wiesbaden in Germany. Since the theft, the Khatib family have been pursuing legal action to recover the stolen artwork, with the litigation funded by Prague-based funder, LitFin, and led by Dentons’ offices in Frankfurt and Paris. The press release included a statement from the spokesperson for the Khatib family, who said: "With the help of Dentons and LitFin, we will follow the perpetrators around the world. We will continue to recover our property and encourage anyone who considers buying works from the Russian Avantgarde to diligently check its provenance and make sure it is not a stolen piece belonging to our family".