The sanctioning of Russian business owners since 2022 has led to a plethora of litigation, as one ongoing case in Florida sees two Russian nationals in a dispute over the funding of litigation between them.

Reporting by Bloomberg Law covers ongoing proceedings in a Florida court, where sanctioned Russian billionaire Andrey Guriev is seeking discovery on the funding of claims brought against him by Alexander Gorbachev. The discovery application relates to a series of cases brought against Guriev by Gorbachev over his claimed partial ownership of Guriev’s company, with Gorbachev’s legal costs, insurance and additional expenses having been paid by Sphinx Funding LLC, a subsidiary of 777 Partners. 

Gorbachev failed in his claim brought against Guriev in the UK, but has since claimed that he does not have the £12 million that he has been ordered to pay to Guriev in court costs. Mr Guriev’s counsel from Boies Schiller Flexner, explained the reasoning behind the discovery application in a memorandum of law, stating:

“Mr. Guriev hopes to discover information relevant to the identities and ultimate sources of the funds provided by the third-party funders who financed Mr. Gorbachev’s failed, frivolous, and potentially fraudulent claims, as well as the true motives and objectives in bringing those claims.”

In response to a prior application by Guriev to have the two funders added as parties to the case, Joshua Wander, managing partner and co-founder of 777 Partners, stated that even though the company had covered some of Gorbachev’s legal costs, it had no stake in the result of the litigation. Furthermore, Wander had claimed that his companies had no paid any of Gorbachev’s legal costs after May 2023, following a “breakdown in the relationship between Alexander and the funders”.

The funding of arbitration claims brought against nation states represent challenging opportunities for legal funders, with the potential of a large return balanced against the complicated nature and prolonged timelines of these disputes. A new settlement in the High Court demonstrates that these issues can even extend to disputes between the claimant and funder, even when a valuable settlement is secured.

Reporting by the USA Herald covers the move by the High Court of Justice of England and Wales to finalise the settlement in a dispute between litigation funder Buttonwood Legal Capital, and the estate of late Finnish mining investor Mohamed Abdel Raouf Bahgat. The £16.74 million settlement which was approved by the court on Tuesday ended the legal action that Buttonwood began in 2022 to recover a share of the award won in Bahgat’s arbitration case against Egypt.

As Mr Bahgat died on 8 October 2022, the settlement was reached with his estate. The arbitration claim dated back to 2000 when Bahgat was arrested by the new government and had his assets frozen and his mining operations project seized. The arbitration ended in 2019 at a tribunal in The Hague where Bahgat was awarded $43.8 million, which following two years of interest and an enforcement dispute, finished as a $99.5 million payout in November 2021. Buttonwood brought a claim to the High Court in the following year to retrieve its share of the amount, further complicated by a prior renegotiation of terms between Buttonwood and Bahgat in 2017.

Neither Buttonwood Legal nor the Estate of Mr Bahgat have publicly commented on the settlement.

With next Monday set as the deadline for the Civil Justice Council’s (CJC) Interim Report and Consultation on litigation funding, we are beginning to hear more vocal arguments about the approach the government should take towards regulating the litigation funding industry.

An article in Legal Futures provides an overview of remarks given by Richard Orpin, Director, Regulation & Policy at Legal Services Board, at a consultation event for the CJC review in Oxford. In his speech, Orpin advocated for “moving away from the voluntary model of regulation to a mandatory model” for litigation funding, suggesting that it should be brought “into the remit of the FCA (Financial Conduct Authority).

Orpin argued that the rise in the use of litigation funding had “coincided with an increase in poor practice by some law firms in receipt of that funding,” and that “this pattern of behaviour undermines trust confidence in the ‘no win, no fee’ sector.” Orpin put forward the view that regulators needed to take a “more proactive” stance, highlighting his organisation’s concerns over “poor standards of client care, short-term financial gain being put above the interests of client and duty to the court.”

Other speakers at the event varied in their perspectives, with Richard Blann, head of litigation and conduct investigations at Lloyds Banking Group, similarly arguing that the current model of self-regulation was “ineffective and inadequate” and that the Association of Litigation Funders (ALF) “has no teeth”. 

Adrian Chopin, managing director and founder of Bench Walk Advisers, offered a dissenting view and questioned some of the preconceptions about funding, saying that the suggestion there are “waterfalls where the funders take everything and the client gets nothing” demonstrated a “gross level of ignorance”.

The fight over the future of regulation for third-party litigation funding continues to see a plethora of activity at the state level in the U.S., as last week a bill in the Arizona legislature moved one step closer to becoming law and imposing new restrictions on legal funding.

Reporting by Chamber Business News covers the move by the Arizona Senate’s Regulatory Affairs & Government Efficiency Committee to approve a bill governing transparency in litigation funding in the state. Senate Bill 1215 passed the committee with a majority vote, with four members voting for its advancement, two votes against and one ‘not voting’. 

The bill, which was sponsored by Senator Vince Leach, shares similarities with similar legislation put forward in other states by introducing new rules governing the disclosure of third-party funding in civil claims. The bill requires the disclosure of litigation funding agreements to all parties in the action, prohibits the funder from receiving a larger share of the proceeds than the claimants, and restricts the influence a funder may have on litigation decisions including choosing counsel, expert witnesses or the direction of litigation strategy.

The bill is supported by the Arizona Chamber of Commerce & Industry, the Arizona Manufacturers Council, the Arizona Lodging & Tourism Association, and the Arizona Trucking Association. Organisations opposing the bill include the Arizona Trial Lawyers Association and the International Legal Finance Association.

The full text of SB 1215, as well as information on the passage of the bill, can be found on the LegiScan website.

As LFJ reported earlier this week, the news that the Competition Appeal Tribunal (CAT) had approved the £200 million settlement for the Mastercard class action provided a landmark ruling that will no doubt be seen as an important moment for legal funding in 2025.

An article in The Global Legal Post reflects on the impact of the CAT ruling, garnering views from senior professionals across the legal industry as to the merits of the tribunal’s decision and the impact it may have on similar cases moving forward.

Leslie Perrin, chair of Calunius Capital and former chairman of the Association of Litigation Funders, provided the funder’s perspective and said that “there has to be hope that Merricks’ settlement with Mastercard is not a blueprint for other cases”. Perrin also expressed concern that the CAT’s decision “will no doubt encourage other defendants”, and lamented that “the funder’s intervention to challenge the settlement has been unjustly criticised”.

Charles Balmain, partner at White & Case, noted that the speed with which the CAT approved the settlement “suggests that the tribunal had no hesitation in concluding that the settlement struck was just and reasonable.” Furthermore, Balmain highlighted that this decision serves as a useful reminder as to the gulf between the “eye-watering” value of claims put forward when they are first brought and the “the true value” that is returned at the end of these prolonged proceedings.

Louise Trayhurn, co-founder of Crescient, a corporate advisory boutique that specialises in litigation risk, also highlighted the extended duration of such cases and argued that it is “a shame for the parties and courts (but not the lawyers) that it cost almost £90m to get that result”. Trayhurn also placed this case in the wider context of the legal funding market that supports these claims, explaining that “funders are vital in bringing these cases and holding corporate behaviour to account, but they have limited ability to affect settlement”.

Although Elon Musk’s name has become most prominent in stories about U.S. politics over recent months, in Australia, it Tesla that has attracted the attention of a new lawsuit alleging that it has marketed and sold vehicles that are defective.

An article in ICLG covers the launch of a new class action being brought against Tesla over allegations that the car manufacturer’s semi-autonomous driving system has put drivers at risk through its ‘phantom breaking’ phenomenon. Furthermore, the class action is targeting Tesla’s marketing of its vehicles, alleging that the company has mislead customers over the supposed range of its vehicles. The class action was filed by JGA Saddler and is being funded by Woodsford.

Rebecca Jancauskas, director of JGA Saddler, took aim at Tesla’s “so-called Autopilot” feature, arguing that the vehicles’ habit of applying the brakes at random “could, if it causes an accident, result in serious injury and/or death.” Jancauskas also painted the alleged false advertising of Tesla vehicles’ range as part of a wider picture of misleading behaviour from the car company, saying that she “hoped this claim underscores the importance for all EV manufacturers to be truthful in their marketing, deliver on their promises, and ensure their products are safe and reliable.”

David Haughan, investment officer at Woodsford, argued that Australian consumers who purchased Tesla vehicles “were sold a car based on promises about the vehicles’ self-driving capabilities, battery range, and safety features, and Tesla has not delivered.” Haughan stated the primary motivation behind the class action in plain terms: “Tesla customers have not got what they paid for.”

More information about the Tesla Motors Class Action can be found here.