Trending Now

All Articles

3453 Articles
Announcements Commercial Deals

New Research Shows Businesses Increasingly Open to Reframing Legal Department from Overhead to Capital Source

Burford Capital, the leading global finance and asset management firm focused on law, today releases new independent research demonstrating that an increasing number of businesses are recognizing litigation portfolios as value sources and are becoming more open to tools that help them reframe the legal department from overhead to capital source.

In the nearly 15 years since Burford’s inception and in the wake of the last great recession, how businesses view their litigation and arbitration portfolios has drastically changed. Pressures on cost management have been persistent through turbulent economic times, Covid, supply chain constraints, geopolitical tensions and slow economic growth in major economies. To better understand how in-house lawyers and finance professionals expect these dual issues of cost management and value generation to evolve in the years ahead, Burford commissioned independent research with 400 GCs, heads of litigation, senior in-house lawyers, CFOs and other leaders responsible for litigation decision-making in their companies.

Highlights from the research include:

  • Businesses' already significant investment in litigation is growing: 43% of GCs say litigation spend will grow at least 25% in the next five years.                 
  • GCs and CFOs are aligned in seeking innovation for the legal department: More than half of businesses (55%) either have an affirmative recovery program (18%) or intend to build one (37%)—making it all the more important that best practices are in place to manage costs and optimize outcomes.
  • GCs and CFOs agree that collaboration is needed but differ on its extent: 70% of GCs and CFOs say it is important that the legal department find new ways to recover value—signaling a shared desire to reframe the legal department as a capital source. However, three times as many in-house lawyers as finance professionals say the decision to pursue potential claims is generally left to legal with little input from finance.
  • Legal finance is a key tool and finance has an important role in leveraging it: Almost three quarters (73%) of all respondents say their organizations have used legal finance (39%) or would consider doing so (34%), and more than two thirds (67%) of finance professionals feel that legal can increase its value to the business by using tools like legal finance.

Christopher Bogart, Chief Executive Officer of Burford Capital said: “The trend of ‘corporate finance for law’ is growing, as confirmed by this research and our own business, given that more than 50% of our commitments are now with corporates. That’s due to the impact legal finance can have on reducing the impact of litigation on the P&L and business leaders’ desire to use their capital to maximize shareholder value, not pay lawyers. This marks our 15th year in business – and while the legal field is generally slow to change, this research reinforces that CFOs and GCs are thinking about their legal departments differently, and Burford is laser-focused on helping companies reframe the legal department more as capital source than overhead.”

The Litigation Economics: CFOs and GCs weigh in on best practices in optimizing legal department value survey can be downloaded on Burford’s website. The research was conducted by GLG from December 2023 – January 2024.

About Burford Capital

Burford Capital is the leading global finance and asset management firm focused on law. Its businesses include litigation finance and risk management, asset recovery and a wide range of legal finance and advisory activities. Burford is publicly traded on the New York Stock Exchange (NYSE: BUR) and the London Stock Exchange (LSE: BUR), and it works with companies and law firms around the world from its offices in New York, London, Chicago, Washington, DC, Singapore, Dubai, Sydney and Hong Kong.

For more information, please visit www.burfordcapital.com.

Commercial Regulatory Issues

An Overview of Litigation Funding in Switzerland

When the European litigation funding market is discussed, it is perhaps unsurprising that these conversations are largely focused on third-party funding opportunities within member states of the European Union. However, outside of the EU, there is potential for Switzerland to become one of the continent’s most interesting jurisdictions for the adoption of third-party funding services. A blog post from Swiss Legal Finance (SLF) provides an overview of third-party litigation funding in Switzerland, examining the potential for the local market to grow, and outlining the best use cases for litigation finance in the country. The article begins by noting that whilst litigation funding has existed in Switzerland for the last 20 years, we have not seen widespread adoption of third-party funding services with ‘only a handful of funders currently active’. However, SLF point out that this may be change in the near future, ‘in part because local asset managers are becoming increasingly interested in litigation funding as an investment vehicle.’ The current state of litigation finance in Switzerland is a market that is unregulated yet recognised by Swiss law, with the Federal Court going as far as stating that there is a ‘ethical obligation for lawyers to inform their clients of the existence of TPLF.’ The post also explains that the Swiss legal model avoids some concerns around third-party funding that arise in other jurisdictions, noting that a funder’s presence has ‘no impact on lawyer-client privilege.’ This is because the Swiss system allows for legal documents to be shared with third parties without any requirement to disclose those documents to the defendant. As for the types of Swiss proceedings that litigation funding could be best suited for, SLF suggest that beyond domestic litigation, ‘domestic and international arbitration proceedings are also an attraction, because they often offer a substantial potential payout and take less time than litigation proceedings.’ SLF acknowledge that as class actions do not currently have a strong foothold in the country, there is little room for funded opportunities in this area. However, they also suggest that there is still a wide array of potential use cases, including divorce and inheritance cases, or even defendant funding.
Commercial Regulatory Issues

Nadhim Zahawi Calls on Government to Protect Access to Litigation Funding

Whilst the Supreme Court’s PACCAR ruling has been viewed as a low point for the UK litigation finance industry, the subpostmasters scandal appears to have drawn public attention to the importance of third-party funding. In another example of a prominent public figure calling for action to reverse the effects of PACCAR, the UK’s former Chancellor has called for action to ‘ensure full access to litigation funding.’ In an op-ed published by City A.M., Nadim Zahawi, MP for Stratford-on-Avon and former Chancellor of the Exchequer, argues that the Post Office scandal has demonstrated the crucial role that litigation funding plays in supporting ‘unfairly maligned groups’ like the subpostmasters. As many industry commentators have previously noted, Zahawi suggests that the elevation of this scandal into the public spotlight ‘has given the government the vital push it needed to speed up the process to ensure they receive justice.’ Describing the Supreme Court’s PACCAR ruling in damning terms, Zahawi says that without corrective government action, the decision ‘could have catastrophic and far-reaching consequences for access to litigation funding.’ Whilst he praises the government’s efforts to speed up the provision of compensation to the Post Office victims, Zahawi emphasises that this corrective action ‘must include ensuring that the next Mr Bates can obtain justice before parliamentary time runs out.’
Commercial Regulatory Issues

Irish High Court Ruling Rejects Allegations of Third-Party Funding in Tax Claim

As the third-party funding of litigation is still prohibited in Ireland, there are few opportunities to examine issues around funding arrangements in this jurisdiction. However, a new piece of analysis looks at a court decision which ruled on allegations that a claimant’s engagement with its lawyers amounted to a third-party funding agreement. A blog post by Lisa Carty and Sarah Twohig from Pinsent Masons examines a judgement handed down by Mr. Justice Michael Quinn in the High Court of Ireland, which dealt with allegations that fee arrangements between a plaintiff and their lawyer ‘amounted to a champertous contingency fee agreement.’ These allegations arose in a dispute between the Collector General of the Revenue Commissioners (Revenue) and two landlords, over unpaid taxes on rental income.  The defendants, Paul Howard and Una McClean, argued that Revenue’s agreement with its lawyers should be classified as a third-party funding agreement due to a clause that stipulated ‘the lawyers would only be paid if legal costs due to Revenue were recovered from a relevant taxpayer.’ Howard and McClean argued that if a costs order were made in the case, then the lawyers would be effectively paid a share of both the tax debt and the legal costs. However, Mr. Justice Quinn ruled that ‘the proceeds of the litigation process were the unpaid taxes, surcharges, and interest, not the costs.’ Therefore, the agreement did not violate Ireland’s prohibitions on champerty, as the clause at issue ‘did not allow a bonus or improper profit, because the lawyers had a right to their costs.’ Carty, a partner at Pinsent Masons, emphasised that the High Court’s decision “should act as a reminder to firms that any innovative funding arrangements may ultimately be scrutinised by a court to determine whether they constitute illegal third-party litigation funding.”  Twohig, a senior associate at the firm, added that until there is any reform of Ireland’s existing limitations on third-party litigation funding, “it is important that firms are mindful that their engagement terms cannot be interpreted as allowing profit from the proceeds of any litigation, other than the costs fairly due.”
Announcements Case Developments Commercial

Rest Super Members Prepare for Class Action Over Alleged Breach of Trustee Duties

Shine Lawyers has filed a class action on behalf of members of the Rest Superannuation fund who may have had income protection insurance premiums wrongfully deducted from their superannuation accounts.    “This class action alleges that between December 2008 and June 2019, Rest Superannuation (Rest) signed up new members to income protection insurance by default, without the member actively choosing to sign up to the policy,” said Shine Lawyers’ Practice Leader, Hadi Boustani.    “We also claim that when members did not make any contribution to their Rest account for 13 continuous months or more, the default income protection insurance policy did not provide the member with any coverage and when members held multiple income protection insurance policies at the same time, the Rest income protection policy provided little to no coverage.”    “This was money down the drain for fund members who paid a premium for no benefit. As a result, we’re seeking compensation for insurance premiums which we allege were unfairly deducted, as well as investment returns and administration costs,”    “Up to 500,000 Rest members may be affected,” said Boustani.   Shine Lawyers client, Jarrod Lane, has registered for the class action to demand accountability from his super fund.   He was not earning an income for over 3 years between 2018-2021 and believes he was charged for income protection insurance that he could never claim on.    “I felt it was important to join this class action because what Rest has done is wrong and they should compensate those who were affected.”  The action is being funded by Woodsford, a leading global ESG, access to justice and litigation finance business.   Clare Owen, Director and Head of Origination, Woodsford Australia, commented: “Everyday Australians trust their superannuation funds to look after their hard-earned dollars which they have invested for their retirement. Having sufficient superannuation to fund retirement is so important. Woodsford is pleased to be supporting this action to assist those everyday Australians in recouping losses to their superannuation which has been unfairly eroded.”    To be a part of this class action, you must have:   
  • Been a Rest Super fund member for any time between 5 December 2008 and 30 June 2019; and   
  • By default, signed up to a Rest Superannuation account which included an income protection insurance policy; and   
  • Had income protection insurance premiums deducted from your Rest Super account; and  
  • Either:  
    • Made no contribution to your Rest Superannuation account for 13 continuous months or more but continued to receive deductions from your account to cover income protection insurance premiums to Rest during that period; and/or  
    • Paid for multiple default income protection policies alongside your Rest income protection insurance policy.   
Anyone who meets the above criteria and was a Rest super fund member between 5 December 2008 and 30 June 2019 may be entitled to compensation.      To find out more, register here.    The class action was listed for a case management hearing on Friday 16 February, 2024 in the Federal Court. Justice Button made orders including for Rest to file its defence by the 28 March 2024. 
Commercial Regulatory Issues

Arizona House Judiciary Committee Approves Litigation Investment Safeguards and Transparency Act

The campaign across the United States to introduce state-level legislation regulating third-party litigation funding continues to gain momentum, as the Arizona state legislature has moved forward with its own bill designed to increase oversight of funding arrangements. An article in Chamber Business News covers the progression of HB 2638, the Litigation Investment Safeguards and Transparency Act, which was advanced by Arizona’s House Judiciary Committee earlier this week. The draft bill was approved by the committee in a 5-4 vote and will now be sent to the House Rules Committee, before proceeding to a full vote in the House. The language in the current version of HB 2638 bears a striking similarity to the bill making its way through Florida’s legislature, with an emphasis placed on increasing transparency requirements and laying out restrictions on funders’ control over the litigation and settlement processes. As is the case in the Florida bill, HB 2638 prohibits litigation financiers from paying commissions or referral fees, and prohibits them from assigning any part of a litigation financing agreement. The bill, which is sponsored by Rep. Travis Grantham, has received support from the American Property Casualty Insurance Association, the U.S. Chamber of Commerce Institute for Legal Reform, and a coalition of Arizona’s business associations. Those organisations publicly opposing the bill include the Arizona Trial Lawyers Association and the International Legal Finance Association (ILFA).
Announcements Commercial People Moves

Global law firm behind $70 billion BHP mining disaster claim launch Sydney office

The lawyers behind a multibillion-dollar class action against BHP over the fatal 2015 Samarco dam disaster in Brazil, are opening an office in Sydney.

Global law firm Pogust Goodhead has corporates who fail to uphold their social and environmental responsibilities in its sights as it establishes an Australian presence with the opening of an office in Sydney’s legal district at 126 Phillip Street.

Pogust Goodhead is bringing a case against BHP, the world’s biggest miner, on behalf of over 700,000 claimants in Brazil following the collapse of the Fundão Dam in 2015. The collapse killed 19 people and released 50 million metres of toxic waste, destroying entire villages and livelihoods. The case is the largest class action of its kind and is set to go to trial in London in October 2024.

The new office in Sydney is expected to serve as a base to launch new claims against Australian corporations who fail to uphold their obligations.

Global Managing Partner Tom Goodhead said:

“We are delighted to be launching in Sydney. We are establishing a base in BHP’s backyard to ensure we explore every avenue in our fight for justice for the victims of one the world’s worst environmental disasters.”

“The mining sector in Australia plays a vital role in ensuring the availability of increasingly important rare and critical minerals, which makes it a major driver of economic growth and wellbeing. However, with this enormous wealth and influence comes a responsibility to the communities in which they operate - a responsibility premised on basic decency and fairness.”

“We are investigating a number of new cases against Australian multinational corporations, such as BHP, in which their commitment to this responsibility has been seriously thrown into question. With the launch of our Sydney office, we are putting Australian corporations on notice that we are ready to hold them to account.”

Described as ‘the first legal unicorn’, Pogust Goodhead, has seen huge growth in just over five years and now represents over three million clients worldwide. It is also accumulating a sizeable war chest, enabling it to confront some of the world’s largest corporate entities on behalf of its clients which include some of the most disadvantaged people on the planet.

In October last year the firm announced a landmark US$550m investment partnership with US-based emerging markets investment manager Gramercy. The firm employs over 700 staff and has offices in London, Rio, Edinburgh, Amsterdam, Miami, Philadelphia and now Sydney.

The Sydney office will be headed up by Partner | Head of Australia, Amie Crichton and Partner, Joshua Carton. With over 15 years’ experience, including across top-tier Australian and global firms, Amie is a highly sought after disputes specialist and commercial litigator. She has a proven track record in defending and prosecuting claims across the consumer, financial services, technology, resources and infrastructure sectors, with a primary focus on complex multi-party disputes and high-profile class actions. Amie is joined in the partnership by long standing colleague and complex commercial disputes and class action specialist, Joshua Carton

Partner | Head of Australia Amie Crichton said:

“Pogust Goodhead’s arrival in Australia is more than just another player in the legal field. What sets the firm apart is its global reputation and extensive network. In bringing their resources, knowledge and invaluable strategic partnerships to Australian shores, the firm is empowering individuals to seek justice on an unprecedented scale. This launch also signifies the firm’s recognition of Australia’s importance as a hub for representative proceedings and underscores its confidence in the country’s sophisticated class action framework. Pogust Goodhead is poised to leave an incredible mark, cementing their status as trailblazers in the pursuit of justice.”

Case Developments Commercial

Industry Reaction to Ruling In Burford Capital, Sysco Antitrust Cases

As LFJ reported earlier this week, the ongoing saga of Burford Capital and Sysco Corp experienced a new twist as a Minnesota judge denied the joint motions for substitution of plaintiff in the antitrust lawsuits against pork and beef producers. Whilst Burford has already stated its intention to challenge the court’s ruling, litigation finance leaders and analysts have begun to offer their perspectives on what the potential impact of this court order may be. An article in Bloomberg Law gathers insights from legal scholars, senior executives from litigation funders and other organizations, as they react to Judge Docherty’s February 9 ruling. Maria Glover, civil procedure and civil justice professor at Georgetown Law School, framed the development as an unhelpful addition to the broader climate of scrutiny on litigation funding which has seen “a cascade of things going wrong.” In a similar vein of thought, Tom Baker, law professor at the University of Pennsylvania, said that the judge’s decision “will be something that the anti litigation funders will use to try to promote what the industry will regard as restrictive regulation.” However, leaders within the litigation finance industry have offered a far more measured reaction to the ruling, with Dai Wai Chin Feman, managing director at Parabellum Capital, describing it as “just more of the sideshow” and “a huge distraction from the underlying case.” Reinforcing this position, Rebecca Berrebi, litigation finance broker and consultant, emphasised that the Burford-Sysco situation was atypical for the industry, and “the result of a series of unfortunate events.”
Commercial Deals

Erso Capital: 2024 the ‘Crucial Year’ for Collective Actions in England & Wales

The important role that litigation funding plays in supporting group claims has been evident in the sub-postmasters scandal, with funders able to assert the value they can provide to the public in facilitating access to justice. Moreover, funders are looking at the coming year ahead with optimism, with their sights set on major cases that could build momentum for collective actions in England and Wales. A new blog post from Erso Capital looks at the current state of collective actions in England and Wales, assessing whether 2024 might be a transformative year for group claims in this jurisdiction. Starting with the premise that England and Wales are currently trailing behind other jurisdictions’ class action frameworks, the article examines some of the key cases and developments that may ‘forge a workable regime.’ The two major cases highlighted in the post are the Mariana dam and Dieselgate claims, with the former set for trial in April 2024, and the latter due for a series of hearings in the lead up to a trial next year. The fact that both of these claims are representing a huge number of claimants, leads Erso Capital to suggest that ‘both will test to the extreme the case management powers of the court.’ Observing how effectively these claims are managed and whether they are able to proceed in an orderly fashion, will provide the industry with a guide as to how viable these large-scale collective actions are in England and Wales. Erso Capital also highlight the potential for more representative claims to be brought ‘under CPR19 on behalf of a group of claimants with the same interest’, noting that the Court of Appeal’s decision in January 2024 to allow a representative action to proceed ‘may lay the ground for future representative claims.’ Similarly, the article suggests that there may be opportunities for the CAT to expand its remit, citing the ongoing trial in Le Patourel v BT Group Plc as an important marker that could open the way for ‘the CAT regime to be widened to allow non-competition claims.’