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Commercial Special Features

An LFJ Conversation with Nick Wood

Nick Wood has been involved in structuring and financing numerous litigation strategies over many years. After a long career in wealth management and many allied business ventures, he established Audley Capital in late 2022. Audley has grown rapidly to be a leading light in the litigation funding industry, bringing together investment capital, legal excellence and case origination. Legal Intelligence - formed by Audley Capital and AXai - empowers the legal industry to navigate the future with confidence. Nick believes that by harnessing the transformative power of AI and digital innovation, Legal Intelligence can equip legal firms and litigation funders with the tools and insights they need to make informed decisions, reduce risks, and offer unparalleled service and efficiency gains. LI’s goal is to create a world where legal practices can thrive on the certainty of their actions, driving positive outcomes for their clients. The utilisation of technology has always been a key ingredient in the Audley service proposition. As with many great opportunities, Audley and AXai came together by chance but swiftly worked out that collaboration was essential-maximising the impact of knowledge, connectivity and technology to create the art of the possible. Away from work, Nick’s interests include golf, rugby, cycling, food and wine. Below is our LFJ Conversation with Nick Wood. 1) There is a lot happening at the intersection of litigation funding and technology. Where do you currently see the most intriguing opportunities at the moment? The litigation funding industry has grown massively in recent years as demand has created intriguing investment opportunities for those seeking uncorrelated returns. However, it is fair to say that the legal profession has lagged behind other sectors in implementing technology and this has meant that accurate assimilation of risk/return ratios have been difficult for investors to ascertain. Indeed, in some cases money has been poorly allocated to firms that quite frankly do not have the required skill sets, and in others it has proved impossible to raise the required investment to take a case forwards. Neither of the above serves plaintiffs properly and they are the most important stakeholder in this. We see technology as an enabler. It helps great cases, great law firms and intelligent capital to stand out and be heard. It enables funders to risk assess potential cases quickly, accurately and effectively. It enable law firms to demonstrate historical performance, current case work and future opportunity. 2) You recently launched Legal Intelligence, an AI platform for the Legal Services industry.  What is the key differentiator here - why should legal professionals consider Legal Intelligence? Legal Intelligence Ltd (LI) is the coming together of like minded individuals. Audley brings a weight of experience in terms of litigation funding, law firm consulting and case development and management. AXai is an AI/technology powerhouse with long term experience of implementing technology to create bespoke solutions to complex problems. Together, LI is demonstrating the art of the possible. 3) Walk us through how a litigation funder might use your platform. From bookbuilding to client onboarding, how would Legal Intelligence provide efficiencies along the way? Wow, that could take a while! In brief, LI  has several ready made modules to enable claim verification, quantum calculation, case management, data trawling and risk analysis both at inception and at each milestone. For law firms, LI can provide onboarding tools, data scraping to maximise the value of each client, data trawling to reduce paralegal costs, client facing chatbots, case management tools and financial management assistance. Basically, LI makes investment capital more intelligent and it makes investable law firms stand out. We are also working on a number of bespoke projects with both funders and law firms. 4) What are the chief concerns prospective clients have about your platform - or about AI platforms in general? And how do you allay those concerns? It is really interesting to discuss technology generally, and AI in particular with prospective clients. Losing control is the probably the biggest fear, but those at the forefront of our industry realise that it has to be the way forward. Costs will always be under pressure, either through competition or regulation. Funders spend much of their time on cases that will not be funded and law firms spend massive resources on trying to access funding without success. LI seeks to short circuit much of this, making funding more swift, more accessible and more efficient. If we can work more effectively as a collective, access to justice will become quicker, cheaper and more successful, enabling those that need a voice to be heard. Enabling social justice is the beating heart of Audley, AXai and LI. 5) Where do you see the evolution of litigation funding and legal technology moving from here?  What advancements should we be keeping an eye on, and how do you see those impacting the sector?  There is massive interest from institutions, endowment funds and private capital in legal finance. Returns can be impressive and impactful. Many of those investing see that social responsibility and justice is served best by enabling those that need representation to be able to access it. We see the implementation of ‘intelligent’ technology as being vital to the further development of the litigation finance sector, ensuring that capital is invested wisely and effectively. Claim verification, case management, data trawling, client facing chatbots, settlement calculation, performance monitoring and active communication are becoming ever more embedded in litigation management. Legal Intelligence is, and will continue to be at the forefront of this transformational and exciting new world!
Case Developments Commercial

£25M Settlement Agreement Reached in South Western Trains ‘Boundary Fares’ Claim

As LFJ reported last year, several UK train operators have become the target of collective proceedings over claims that the rail companies failed to offer customers with lower-cost ‘boundary fares,’ and instead sold them more expensive tickets from central London. In a significant milestone, the claim brought against one of these operators appears to be approaching a conclusion, as the parties announced they have reached a settlement agreement. In a press release issued earlier this week, Stagecoach South Western Trains Limited (SSWT) and class representative Justin Guttman announced that they had reached a settlement agreement to end the claim brought against the train operating company. As part of the settlement agreement, the train operating company said that it would pay up to £25 million to eligible class members, describing it as “the largest settlement in the history of the collective proceedings regime in the UK”. The claim was brought against SSWT in 2019 over allegations that the train operator “had not made 'boundary fares' sufficiently available for Travelcard holders to purchase.” The claimants were represented by Charles Lyndon, whilst the proceedings were financed by Woodsford Group Limited. The announcement stated that the law firm and funder were “pleased to have been able to secure this outcome for class members without the necessity for the Parties to pursue the matter to trial.” The settlement agreement, which was published on the Boundary Fares claim website, states that the train companies deny “the existence of a dominant position and also any conduct which could amount to an alleged abuse of a dominant position” or that the class members “have suffered any loss or damages as a result of any of the conduct” that the proceedings alleged. However, it says that in order to end the legal proceedings “and avoid unnecessary legal and other costs”, all the parties have agreed to the terms of the settlement agreement. As emphasised in the settlement notice, “the Proposed Settlement relates to SSWT only and does not settle the claim against the other Defendant, First MTR South Western Trains Limited.” The first trial for the claim brought against the latter defendant is set to be heard on 17 June 2024. The settlement agreement will now be considered by the Competition Appeal Tribunal, with a hearing listed for 29 April 2024.
Commercial Regulatory Issues

Unified Patents’ General Counsel Calls for Mandatory Disclosure of Litigation Funding

It has been a long-held position of critics of the litigation finance industry that a lack of strict disclosure regulations represents a threat to national security. Unsurprisingly, the recent Bloomberg Law investigation into Russian oligarchs allegedly skirting sanctions through litigation funding has renewed these calls to actions. In an opinion piece for Bloomberg Law, Jonathan Stroud, general counsel at Unified Patents, argues that the latest revelations around foreign entities involvement in litigation funding demonstrates both the necessity and the urgency for new rules governing transparency and disclosure. In the article, he argues that the litigation finance industry “needs an overhaul to build in transparency”, suggesting that anything less than significant regulatory changes will allow “other countries to profit off the US judicial system and circumvent sanctions.” Whilst Stroud describes these changes as an ‘overhaul’, he suggests that it would be as simple as the judiciary introducing “a long-overdue tweak to existing Rules 7.1 and 26 of the Federal Rules of Civil Procedure.” He points out that the Judicial Conference is already aligned with this position, having been considering mandatory disclosure requirements as early as 2017. However, Stroud paints the judiciary as “characteristically slow to act”, and argues that it is time for either the judiciary or, if necessary, Congress to move forward with these changes. Looking at the attitude of funders faced with the potential of increased transparency, Stroud claims that “funders have opposed transparency by lobbying against it; writing letters, op-eds, and articles; and spending lavishly on events with sitting judges.” Instead of this position, he argues that both funders and investors should support self-disclosure, otherwise they may “get caught in a wave of over-enforcement down the road.”
Commercial Regulatory Issues

NYC Bar Association Proposes Amendments to Rules Governing Fee Sharing

Discussions around the regulation governing litigation funding are often focused on the decisions made at the legislative or executive levels of government. However, when it comes to assessing the rules for third-party funding within US states, it is clear that state bar associations play an equally important role in setting the playing field for litigation funders. An article in Bloomberg Law covers developments from the New York City Bar Association’s Professional Responsibility Committee, which has proposed changes to state rules governing the sharing of legal fees outside of lawyers and their firms. The two proposed amendments are for Rule 5.4(a), which would allow lawyers to share fees with litigation funders to secure third-party funding for their cases. Whilst these amendments would prove beneficial for litigation funders, the changes would ensure law firms still act independently of any funding arrangements and require lawyers to inform their clients over any relevant financing agreements. The Professional Responsibility Committee explained its proposed changes, stating that the existing rules assume “that one type of financing has the power to corrupt a lawyer’s professional ethics more than any other financial arrangement with a non-lawyer.” The Committee argued that this kind of presupposition “is an exercise in paternalism”, which it said it “cannot justify” after conducting its own research. For these proposed amendments to be adopted into New York’s regulations, they will be sent to the State Bar Association of New York for review and approval. If the association agrees with these changes, the amendments will go to the New York State Supreme Court’s appellate divisions for final approval.
Announcements Deals

QUINN EMANUEL AND LONGFORD CAPITAL TO OFFER LITIGATION FUNDING TO PRIVATE EQUITY CLIENTS

In a groundbreaking agreement, Longford Capital Management, LP and Quinn Emanuel Urquhart & Sullivan, LLP announced a litigation financing offering for private equity (PE) firms and their portfolio companies. Under the terms of today’s deal, Longford has committed up to $40M in equity capital to Quinn Emanuel’s private equity clients involved in litigation, funding attorneys’ fees and litigation costs and monetizing the value of meritorious legal claims.

The agreement provides Quinn Emanuel’s PE clients and their portfolio companies with an alternative method of funding litigation and enables those clients to treat meritorious legal claims as corporate assets capable of being monetized. Longford provides funding for disputes in several areas of law applicable to PE clients, including antitrust, intellectual property, and a variety of contract, tort, and fraud claims.

“Quinn Emanuel likes to innovate, and we have already partnered successfully with Longford on several occasions to produce excellent results for clients,” said Jonathan Bunge, Co-Chair of Quinn Emanuel’s National Trial Practice and Managing Partner of the Chicago office. “This latest collaboration will serve the interests of our private equity clients seeking alternatives and options in pursuing meritorious litigation.”

“We have identified a particular ability to assist private equity managers and their portfolio companies involved in commercial disputes,” said William Farrell, Co-Founder and Managing Director of Longford. “We look forward to assisting Quinn Emanuel by providing its private equity clients with attractive financial options.”

With litigation funding, portfolio companies and their private equity sponsors can pursue valuable, meritorious claims and monetize the value of those claims without risk or delay, accelerating liquidity and fueling growth, Farrell noted.

About Longford Capital

Longford Capital is a private investment company that provides capital to leading law firms, public and private companies, universities, government agencies, and other entities involved in large-scale, commercial legal disputes. Longford was one of the first litigation funds in the United States and is among the world’s largest litigation finance companies with more than $1.2 billion in assets under management. Longford offers a broad range of capital solutions to funds attorneys' fees and expenses and otherwise manage the financial risk of pursuing 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, claim monetization, insurance matters, mass actions and class actions, and a variety of others.

About Quinn Emanuel

Quinn Emanuel Urquhart & Sullivan, LLP is a 1000+ lawyer business litigation firm—the largest in the world devoted solely to business litigation and arbitration with 34 global office locations. Surveys of major companies around the world have named it the “most feared” law firm in the world three times. Firm lawyers have tried over 2,500 cases, winning 86% of them. When representing defendants, Quinn Emanuel’s trial experience gets better settlements or defense verdicts. When representing plaintiffs, Quinn Emanuel lawyers have won nearly $80 billion in judgments and settlements. Quinn Emanuel has also obtained seven nine-figure jury verdicts, four 10-figure jury verdicts, 51 nine-figure settlements, and 20 10-figure settlements.

Quinn Emanuel has been named the No. 1 “most feared” law firm by The BTI Consulting Group three times in its annual “Most Feared Law Firms in Litigation” guide, in which in-house counsel named 46 firms they “want to steer clear of” when it comes to litigation. The American Lawyer named Quinn Emanuel the top IP litigation firm in the U.S. and the firm as one of the top six commercial litigation firms in the country. The UK legal periodical, The Lawyer named us “International Firm of the Year.” Law360 has most recently selected us as having Banking, Class Action, International Arbitration, and Trials “Practice Groups of the Year.” Managing IP twice recognized us as having the “Best ITC Litigation Practice” and honored us with the “Patent Contentious West” award. Legal Business has named us “US Law Firm of the Year” three times, and our German offices have twice been named both “IP Litigation Firm of the Year” and “Patent Litigation Firm of the Year” by JUVE, Germany’s most prestigious legal publication. Global Investigations Review, a leading legal periodical covering global white-collar investigations, named us the “Most Impressive Investigations Practice of the Year.” Global Arbitration Review named us the 3rd best arbitration practice in the world. Global Competition Review named our antitrust and competition practice among the “25 Global Elite,” and has included us in their list of the world’s top 10 competition litigation practices.

The LFJ Podcast

Episode 86: Luke Darkow

Hosted By Luke Darkow |
In this episode, we sat down with Luke Darkow, Principal on Victory Park Capital’s Investment Team. Luke discussed Victory Park's credit-like approach to litigation funding, why the asset class is so attractive to investors and LPs, how Victory Park can benefit law firms specifically, and the evolution of the asset class under a stricter regulatory regime. [podcast_episode episode="12778" content="title,player,details"]
Announcements Commercial Deals

Legal Finance SE Announces Acquisition by Nakiki SE

Legal Finance SE, which has been aiming for an IPO for some time, has been acquired by the listed company Nakiki SE. The shares of Nakiki SE have been traded on the Frankfurt Stock Exchange since 9 April 2024 under ISIN DE000WNDL300 / WKN WNDL30. Nakiki SE will soon operate under the name Legal Finance Holding SE. In a strategic decision, Legal Finance SE, a pioneer in litigation Finance, announces its acquisition by the listed company Nakiki SE (ISIN DE000WNDL300, WKN WNDL30). This acquisition is not only a significant step for both companies, but also marks the indirect IPO of Legal Finance SE, which will take the company to new heights. Legal Finance SE, known for its innovative approach to litigation Finance, will significantly expand its reach and influence through this acquisition. The acquisition by Nakiki SE not only provides Legal Finance with access to the capital markets, but also opens up new avenues for innovation and growth in the ever-changing world of litigation Finance. This acquisition is in line with the company's vision to make legal protection more accessible and fairer and sends a strong signal for the future of the industry. For clients and partners of both companies, this development means increased support and expanded services aimed at facilitating access to quality legal services worldwide.
Case Developments Commercial

Italian Supreme Court Provides Ruling on Registration Requirements for Litigation Funders

In jurisdictions where litigation funding is still in its early stages, it is instructive when the courts are forced to deal with questions around the legality of third-party funding. A recent decision published by Italy’s highest court has offered some insight into the country’s legal system and its current attitude towards litigation funders. In a post from RP legalitax, Paolo Grandi examines a judgement handed down by the Italian Supreme Court last month, which found that litigation funding firms are not required to be registered under Article 106 of Legislative Decree No. 385/1993 (‘Testo Unico Bancario’ “TUB”).  The Supreme Court’s judgement related to a case from the Justice of Peace in Busto Arsizio, where a claimant seeking compensation from an airline had sold their claim to a funder. The Justice of the Peace ruled that the purchaser of the claim was not entitled to the compensation, as the agreement between it and the claimant was invalidated by the fact that they were not registered under the TUB regulations. The claimant appealed the decision to the Court of Appeal in Busto Arsizio which upheld the appeal in July 2021, only for the airline to then bring a challenge of the decision to the Supreme Court. The Supreme Court rejected the airline’s challenge and, in its decision published on March 19 2024, stated that the ““the Court of Appeal, in solving this case, was compliant with what this Court has already affirmed in the different hypothesis of the assignment of the credit for compensation for road accident damages, namely that it is possible to assign such credit pursuant to Articles 1260 et seq. of the Italian Civil Code.” The Supreme Court went on to clarify that this kind of transaction “does not even imply any financial activity subject to authorization pursuant to Article 106 TUB.”
Commercial People Moves

ALFA Welcomes Litica as Newest Associate Member

In a post on LinkedIn, The Association of Litigation Funders of Australia (ALFA) announced that it is welcoming Litica as its newest Associate Member. Litica becomes the 11th Associate Member of ALFA, joining the likes of FTI Consulting, Piper Alderman, and William Roberts Lawyers. Since its launch in 2019, Litica has grown to become a leading provider of commercial ATE insurance in the UK and has since built a global footprint by expanding its operations to Australia in 2022. As part of this expansion, Litica appointed Philip Lomax to the position of Managing Director for Asia Pacific, with Lomax leading Litica’s Australian offering from Sydney. As LFJ reported in November 2023, Litica followed its expansion to Australia by establishing a European presence through a new office in Cologne (Köln) Germany, with Ed Yell appointed as Managing Director of Litica Europe GmbH.