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Commercial People Moves

Balance Legal Capital Appoints Patrick Crisp as Investment Manager

In a LinkedIn post, Balance Legal Capital announced that it had bolstered the strength of its Australian team, with the hiring of Patrick Crisp as an Investment Manager.  Crisp joins the funder’s Sydney office having previously provided consulting services to the litigation funding industry and having spent 10 years at Freshfields Bruckhaus Deringer, as a senior associate in the firm’s commercial disputes team. Crisp is a qualified solicitor with experience in litigation matters across Australia, the UK, and in offshore disputes. Balance Legal Capital’s Australian operations are led by Simon Burnett and Kylie Ansbro, with Burnett also a director of the Association of Litigation Funders of Australia (ALFA). Olivia Pinto serves as managing director for Australia, from the firm’s Sydney office, whilst Fraser Shepherd acts as senior advisor to the investment committee for the funder’s activities in Australia and New Zealand.  Crisp is now the second investment manager in Balance Legal Capital’s Sydney office, joining Maya Shallita, who was also appointed as ALFA’s company secretary in September.
Case Developments Commercial

Argentina Appeals $16 Billion Judgement in Burford-Funded Lawsuit

For litigation funders, reaching a successful resolution to a case is rarely as simple or straightforward as achieving a favourable judgement or award, with the inevitable difficulty of enforcement and recovery proving to be its own separate battle. This is once again being demonstrated in the high-profile YPF case funded by Burford Capital, as Argentina continues its fight to avoid paying the multi-billion-dollar award. Reporting in the Buenos Aires Times and Bloomberg Law provides an update on the latest development in the case of Petersen Energia Inversora, S.A.U. v. Argentine Republic, as the Argentine government has formally appealed against Judge Loretta Preska’s order to pay $16 billion to the shareholders of YPF. The appeal was filed this Tuesday in the US Court of Appeals for the Second Circuit.  As LFJ reported last month, Burford Capital had already moved to begin collecting the award and asked the court to begin attaching Argentine assets from October 16th. In filing the appeal, Argentina argued that forcing the government to pay the award would inflict “irreparable damage to the [Argentine] population, which suffers from high inflation caused by an unprecedented drought.” The appeal also emphasised that the Argentine government “does not have access to the capital market to issue a bond and deposit a guarantee.” The appeal was filed this Tuesday in the US Court of Appeals for the Second Circuit.
Commercial

RPX’s Q3 Report Highlights Reduction in NPE Filings

The financing of patent litigation remains one of the most popular areas of investment for litigation funders, whilst also being the site of frequent contentious showdowns in recent years, as US courts have pressed for increasing levels of disclosure and transparency. However, new market research also highlights that the volume of patent infringement filings by non-practicing entities (NPEs), who often have ties to litigation funders, has fallen over the last quarter. Earlier this week, RPX released its Q3 in Review report and highlighted several key trends from the world of patent litigation, including a particularly interesting trend around NPE filings in the third quarter of 2023. RPX found that across those three months, “NPEs added 382 defendants, down 32% from the same quarter this past year (when NPEs added 558 defendants).” The report also noted that these figures represented a 12% reduction compared to the second quarter, as well as a 31% drop from the trailing Q3 average measured between 2020 and 2022. RPX attributes this reduction in NPE filings, both in this quarter and across 2023, to the significant absence of filings from IP Edge since December 2022, and a decrease in filings in the Western District of Texas since last year’s court order which attempted to redistribute patent litigation across districts. However, RPX did highlight that IP Edge’s extended hiatus finally came to an end on September 13, with a new lawsuit targeting Roku. The plaintiff in this case is Communication Advances, which is another entity created by IP Edge’s principals: Lillian Woung, Gautham Bodepudi, and Sanjay Pant. In an additional point relevant to litigation finance, RPX noted that two Burford special purpose vehicles (SPVs) avoided sanctions from Judge Todd W. Robinson in the Southern District of California, over its funding of Taction Technology’s case brought against Apple. Whilst Burford’s SPVs did not receive sanctions for a potential violation of their ‘duty of candor’ to the court, Judge Robinson did rule in favour of Apple and granted a summary judgement of noninfringement.
Case Developments Commercial

Australian Class Action Brought Against McDonald’s Secures Favourable Judgements 

Whilst class actions in the UK, US and Europe often receive more coverage, Australia continues to demonstrate its place as one of the top jurisdictions for class actions, particularly those cases that benefit from third-party funding. This is once again demonstrated by news today that a major class action brought against McDonalds has scored two significant victories. In a post on LinkedIn, Michelle Silvers, CEO of Court House Capital, provided an overview of two major developments in the class action being brought against McDonald’s in Australia by Shine Lawyers.  Court House Capital is providing funding for the claim. Firstly, the Federal court of Australia rejected an application to stay the class action, allowing the case to proceed to a case management hearing in 21 days. Secondly, the Full Court of the Federal Court ruled that it had the power “to order that a portion of settlement monies be paid to the litigation funder, Court House Capital, supporting the action, upon approval of any settlement – a so called Settlement Common Fund Order.” The class action focuses on allegations that McDonald’s failed to give its workers a paid 10-minute break when they were working shifts of four hours or more. This refusal to provide paid breaks was in contravention to McDonald’s Australia Enterprise Agreement 2013 (EBA) and the Fast Food Industry Award 2010 (Award). The class action is also being supported by the Retail and Fast Food Workers Union (RAFFWU). Commenting on the ruling, Silvers said, “We now look forward to progressing the class action for the thousands of group members represented by Shine Lawyers and funded by Court House Capital.”
Announcements Commercial People Moves

The European Litigation Funding Association (ELFA) Adds Litigium Capital

The European Litigation Funding Association (ELFA) is delighted to announce that Litigium Capital has become the latest member to join the organisation.  “Joining ELFA is a natural step for Litigium Capital. From a European perspective, the legal financing market is still evolving and, as such, subject to continuous development and innovation. It is essential that key players within the market set standards for, and monitor, responsible operations. By joining ELFA, we continue our commitment to industry best practice in our mission to further develop litigation funding in our home markets”, says Litigium Capital’s CEO, Thony Lindström Härdin.  Omni Bridgeway Managing Director and ELFA Chairman, Wieger Wielinga commented: “I am delighted to welcome Litigium Capital as the latest ELFA member and first Nordic based litigation funder. Litigium’s core mission to establish litigation funding as a well-recognised and widely used form of financing in the Nordics, aligns perfectly with ELFA’s aims. We look forward to collaborating with Litigium founders, Thony Lindström Härdin and Oscar Holm.”  About ELFA:  ELFA was founded by three leading litigation funders with a European footprint, Deminor, Nivalion AG, and Omni Bridgeway Limited. ELFA's current directors are Charles Demoulin (Chief Investment Officer, Deminor); Marcel Wegmüller (Co-Founder and Co-CEO, Nivalion AG); and Wieger Wielinga (Managing Director EMEA, Omni Bridgeway), who is ELFA's Chairman. The intention of the association is to be inclusive for all professional litigation funders of larger or smaller size.  About Litigium:  Litigium Capital is a Swedish investment company dedicated to legal financing. Litigium Capital focuses on funding litigation and arbitration disputes in the Nordics, as well as funding Nordic clients globally. Combining legal and financial expertise for superior risk www.elfassociation.eu 2 assessments and customer service, Litigium Capital’s vision is to make legal financing a natural tool for companies of all sizes in the Nordics.
Case Developments Commercial

Woodsford-Funded ‘Car Delivery Charges’ Claim Reaches Settlement with One Defendant

Despite the ongoing discussions around the fate of litigation funding for class action claims in the UK, we are still seeing positive outcomes in ongoing claims before the Competition Appeal Tribunal (CAT).  Reporting by Commercial Dispute Resolution (CDR) provides an update on the Car Delivery Charges claim, which has seen the impressive milestone of a settlement being reached today. Although the claim has been brought against five separate shipping companies, this settlement is between only one company, CSAV, and the class representative Mark McLaren.  In the opt-out claim that is funded by Woodsford, McLaren is representing both UK consumers and businesses who had bought or leased vehicles from one of five international shipping companies: MOL, “K” Line, NYK, WWL/EUKOR and CSAV, between 2006 and 2015. The claim alleges that these companies engaged in a price-fixing scheme, following a European Commission ruling in 2018 which found that these corporations had violated the European Union’s competition laws and issued a fine of €395m. Now that the settlement with CSAV has been reached, both the law firms representing the claimants and CSAV have submitted an application for the CAT to approve the settlement. The CAT will consider the application at a hearing on 6 December 2023.  However, it is important to note that CSAV’s market share is the smallest of all five defendants, at only 1.7%, with the other four defendants set to continue to fight the claim at trial in 2025. McLaren highlighted that the settlement was important not only for this case, but was “also a significant development for the wider UK collective action regime.” Steven Friel, CEO of Woodsford described the outcome as a “pioneering settlement, which demonstrates the power of litigation funding to help hold large companies to account for their wrongdoing, in this case cartel behaviour.”
Announcements Commercial

Burford Capital Releases Latest Quarterly Journal of Legal Finance

Burford Capital, the leading global finance and asset management firm focused on law, today releases its latest Burford Quarterly, a journal of legal finance that explores the top trends impacting the business of law. The latest issue of the Burford Quarterly 4 2023 includes:
  • Data analytics and litigation: How Artificial Intelligence (AI) will (and won't) change the economics of law Key takeaways from a recent discussion with leading players in integrated data analytics and AI, moderated by Co-COO David Perla.
  • Macroeconomic trends affect how GCs think about dispute costs and risk Burford Co-COO Aviva Will analyzes key considerations top in-house lawyers face around the world, leveraging new insights from a survey of 66 GCs, heads of litigation and other senior lawyers.
  • Best practices for building risk-based practices Senior lawyers from Gibson Dunn, Morgan Lewis, Mayer Brown and Proskauer Rose discuss best practices for law firms expanding their risk-based practices with Burford Director Evan Meyerson.
  • New data shows judgment and award enforcement remains a perennial problem Vanishingly few senior in-house lawyers (2%) recover the full value of their judgments and awards. Burford Vice President Victoria Fox explains how this problem is only exacerbated by difficult economic conditions.
  • Case study: $325 million corporate deal A recent portfolio financing arrangement with a Fortune 500 company demonstrates how businesses benefit from building—and financing—affirmative litigation recovery programs.
  • Arbitration data analytics Third-party funding of investor-state and international commercial arbitration is on the rise. Burford Director Jeffery Commission examines key arbitration dispute data.
  • As US bankruptcy filings increase, legal finance is set to play an important role Burford Managing Director Emily Slater explores recent US bankruptcy activity and explains how the legal finance industry is increasingly playing a role.
Setting a new standard for legal finance reporting and transparency Burford's CFO Jordan Licht describes Burford's new industry-standard approach for valuing legal finance asset values, which gives clients and investors greater transparency into the performance of legal finance partners.
Commercial Deals

The Pivotal Role of Funding for Climate Litigation

Recent years have demonstrated that issues around climate change and environmental protection are becoming a more central part of decision-making for governments and businesses alike. However, for those individuals and groups looking to advance positive change in this area by using the courts to build momentum, they face the underlying issue of raising funds to support this kind of litigation. An article in Energyworld examines the growing prominence of litigation focused on climate change, highlighting the difficulties faced by plaintiffs, and looking at how the prospect of litigation funding could prove to be a game changer for both the volume of lawsuits, and their probability of success.  Demonstrating the ongoing growth in climate-focused litigation, Reuters cites research from the Sabin Center for Climate Change Law which found that “the cumulative number of cases globally has more than doubled since 2015 to nearly 2,200.” However, additional research from the Grantham Research Institute shows that around 90% of these cases are being brought by individuals or NGOs.  With an increase in the volume of climate change cases and the associated litigants lacking the financial resources of a government or corporation, it is apparent why the issue of financing becomes so crucial. Francois de Borchgave, investment specialist and plaintiff in the Klimaatzaak (Climate Affair) case in Belgium emphasises that “funding is a barrier in the sense that it limits the ability of any group of citizens to do it.” With philanthropy and crowdfunding offering limited solutions, the article examines the opportunities for litigation funders to take on an active role in the climate litigation fight. Ana Carolina Salomão Queiroz, chief investment officer at Pogust Goodhead, suggests that taking legal action against companies who harm the environment is an effective method, stating that “by holding corporations accountable, it is increasing the cost of non-compliance with environmental regulations.” Dr Noah Walker-Crawford, research fellow at University College London, cautions that whilst litigation funders can support these cases, he notes that there may be a disparity in the kind of cases they will fund. He explains that this is because “if there’s a profit motive, there might be a financial incentive to look more toward cases brought by wealthy homeowners who are threatened by sea level rise.”
Commercial Regulatory Issues

Have Litigation Funders Downplayed the Impact of the PACCAR Decision?

The Supreme Court’s PACCAR decision has provoked a wide range of reaction and analyses from across the legal sectors, with most funders stating that they either have solutions in place, or are actively working towards those solutions with clients. However, a recent analysis argues that “the litigation funding industry is very much playing down the decision”, whereas the real impact could be much more severe. In a new piece for The Law Society Gazette, costs lawyer Jim Diamond, takes a look at the PACCAR judgement and its potential impact on the litigation funding industry, arguing that the Supreme Court’s ruling is “a catastrophic decision.” Diamond identifies the four main types of cases in which litigation funding agreements could, and likely will, be challenged because of the PACCAR decision: cases funded in the CAT, cases funded solely with a multiple return, cases with both a multiple and a percentage return, and historical concluded cases. Each of these types of cases will have their own nuanced issues to tackle and require tailored solutions, with Diamond predicting that the scale of this upheaval will mean that “a number of UK funders will not survive the challenges.” Diamond poses the potential situation in which “a funder that has been advising investors for a number of years, but now has to revert to them and ask for funds paid over to be returned on the basis that the agreements they used are unenforceable and the profits made have to be reimbursed.” Faced with such a prospect, Diamond argues that it is unsurprising that funders have issued statements that largely played down the potential impact of the PACCAR decision. Additionally, Diamond examines additional issues that may arise from “further satellite litigation on the multiple instead of percentage-based LFA agreements”, arguing that funders “who use the term ‘reasonable legal costs’ in their LFA may not fully understand the consequences of that term.” He concludes by suggesting that both funders and lawyers are likely to face “some very turbulent times ahead.”