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Commercial Regulatory Issues

Ireland Approves Third Party Rules for International Arbitration Funding 

Ireland's President has approved legislation that allows third parties to finance international commercial arbitration. Historically, Ireland has enacted a very restrictive approach to third party funding vehicles to finance litigation costs in the name of champerty.  Mondaq reports that legislative approval of Ireland's "Courts and Civil Law (Miscellaneous Provisions) Act 2023" advances many provisions concerning Ministerial Order. While Ireland still maintains a hawkish approach to champerty, now litigation financiers can enter into investment agreements to fund international arbitration proceedings.  Anticipation has been building that Ireland's Law Reform Commission may release new guidelines to vacate the broad prohibition of third party funding. Specifically, Ireland has only approved third party funding of dispute level proceedings, including international commercial arbitration, mediation, conciliation and/or court proceedings derived from international commercial arbitration. Previously, Ireland's Supreme Court had been hesitant to embrace the notion of litigation finance in any form.
Announcements Commercial Legal Innovation

FIGHTRIGHT Technologies Launches LawGeek, an AI Chatbot for Initial Legal Guidance, Under its “BharatKanoon” Brand

FIGHTRIGHT Technologies, a startup specializing in litigation funding & analytics, has announced the launch of its generative AI-based chatbot, LawGeek, today. This innovative tool, the first offering under the BharatKanoon brand, is engineered to provide users with a foundational direction for their legal queries, a pioneering move in their legal research journeys.
LawGeek, pronounced as 'logic,’ is currently in the beta phase and will serve as an initial guidepost for legal research. It will save users time by pointing them in the right direction and providing the critical information they need.
This project marks a significant stride towards revolutionizing the realm of legal research and is poised to be a precious asset for law students, legal professionals, and the general public in search of legal information.
"At FIGHTRIGHT, we have always believed in the transformative power of AI in redefining how we access legal advice," said Nitin Jain, CEO and Co-Founder of FIGHTRIGHT Technologies. "Our AI chatbot, LawGeek, in its beta version under the BharatKanoon brand, demonstrates our steadfast commitment to making basic legal knowledge more readily available to everyone."
Differentiating itself through the employment of a sophisticated generative AI model, LawGeek, in its beta phase, doesn't merely offer static responses based on pre-set rules. Instead, it is designed to comprehend users' queries in-depth and generate responses carrying pertinent information.
With continuous learning and enhancements in subsequent versions, LawGeek is expected to offer deeper insights into the litigation journeys users are embarking upon.
"Our AI chatbot is named LawGeek, combining the essence of law with the modern era's technology obsession," stated Vishal Mangal, COO and Co-Founder of FIGHTRIGHT Technologies. "The name 'LawGeek' perfectly encapsulates our vision of creating a tool that is both proficient in the complexities of law and passionate about technology, much like a 'geek'. We see LawGeek as a digital ally for those starting their legal journeys in this digital era."
The beta launch of LawGeek follows intensive testing and development, emphasizing a user-friendly, intuitive, and technically proficient tool. This launch, under the BharatKanoon brand, represents an exciting leap forward in how legal professionals and laypeople can access and understand basic legal information.
About FIGHTRIGHT Technologies
FIGHTRIGHT Technologies is an innovative startup based in Kolkata, India. Its primary areas of focus include:
Litigation Funding: FIGHTRIGHT Technologies offers non-recourse funding to claimants/litigants with commercial claims to support their litigation expenses.
Litigation Analytics: The company employs advanced AI and machine learning technologies to provide practical and reliable legal information that is strategic to any litigation. Their tools assist in processing and analyzing vast volumes of legal data, leading to more informed decisions and strategies.
Under the BharatKanoon brand, and with the beta launch of LawGeek, FIGHTRIGHT Technologies takes an essential first step towards making basic legal knowledge even more accessible. Users can now receive immediate, preliminary answers to their legal queries.
To explore how the beta version of LawGeek under BharatKanoon can provide immediate answers to your law-related questions, please visit: https://bharatkanoon.ai/
We invite you to experience the potential of AI in simplifying your legal journey, starting with LawGeek.
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Case Developments Commercial

ASB Appeals High Court Decision to Allow Opt-Out Class Action to Proceed

Large scale class action claims remain a top priority for many leading funders, providing an opportunity to give significant volumes of consumers access to justice and seek compensation from large corporations. However, these claims can still face challenges and appeals from defendants before they even begin, particularly when opt-out claims look to represent a large number of consumers. An article by Interest.co.nz provides an update on a class action lawsuit that is being brought on behalf of 150,000 customers of ANZ and ASB banks, with the claim being dually funded by CASL from Australia and LPF Group in New Zealand. ASB appeared in the Court of Appeal earlier this week, to appeal last year’s High Court decision which gave the green light for the class action to proceed against the banks on an opt-out basis. The claim focuses on the banks’ alleged failure to give their customers sufficient ‘compliant disclosure’ from June 2015 until 2018, and aims to represent all customers who had a home or personal loan with the bank during this time period. The claim is seeking financial compensation for the customers, with the plaintiffs arguing that under the Credit Contracts and Consumer Finance Act (CCCFA), the banks were not entitled to charge fees or interest on the loans during the time they failed to comply with the disclosure requirements. In its appeal, ASB’s lawyer, Jack Hodder KC, argued that by allowing the claim to proceed under the opt-out basis and with these guidelines, the scope of the class action was too broad and lacked definition. In a statement, ASB noted that “the size of the proposed class is unknown”.  In response to ASB’s arguments, the plaintiff’s lawyer, Davey Salmon KC, responded that the breadth of the opt-out class action would ensure that individual customers who were affected but did not have time to pursue a claim would not be left out.
Commercial Regulatory Issues

German Implementation of the EU Representative Actions Directive Set to Impose Tighter Requirements on Litigation Funding

Among the discussion of new regulations which could affect litigation funding, one of the most important angles to consider is how each country’s implementation of the EU’s Representative Action Directive will shape the future of third-party funding for collective redress. As LFJ recently highlighted, the Dutch implementation of the directive saw litigation funding largely unaffected aside from some added disclosure requirements, but it appears not all jurisdictions will take such a light-touch approach. In a blog post from Linklaters, Mirjam Erb, litigation, arbitration & investigations senior associate, analyses the recent bill adopted by the German Bundestag for the implementation of the EU’s directive, having made alterations to the Government’s original draft. Erb provides a useful summary of the major changes which have largely seen a loosening of requirements around the opt-in period, the types of claims that can be grouped together, and capping the financial risk for claimants in the event of a loss. However, when it came to litigation funding, the Bundestag has tightened requirements compared to the Government bill, including limiting the funder’s reward to 10 per cent of the economic benefit of the successful action. When it comes to disclosure requirements, the German parliament has also gone further than the Dutch bill, by not only mandating disclosure of the existence of litigation funding but also requiring disclosure of the contractual agreements. The bill will now go to the Bundesrat, the other chamber of the German parliament, with the legislation not expected to come into force before October. Whilst this new draft has made Germany’s implementation of the directive incredibly welcoming to consumers involved in collective actions, it appears that funders may have to consider whether they wish to engage in German actions given the strict requirements.
Announcements Commercial Legal Innovation

Lex Ferenda Litigation Funding LLC Announces New ESG Initiatives Focused on Litigation Finance Education and Philanthropy

Lex Ferenda Litigation Funding LLC "LF2" recently launched two new initiatives in conjunction with its commercial funding operations. "LF2 University" or "LF2U" offers programming and content promoting education about litigation finance. Meanwhile, "LF2 Gives" serves as LF2's philanthropic arm and corporate citizenship program, through which LF2 supports the local communities in which it works. LF2U is a first-of-its-kind educational initiative that seeks to promote a better understanding of the litigation finance industry, which the program achieves by partnering with industry and subject matter experts to offer valuable, timely insights.  "We are excited to kick-off LF2U, which promotes the importance of knowledge-sharing and education in a rapidly growing and evolving industry," said Andrew Kelley, LF2's Managing Director, Underwriting & Risk. "Our expanding purpose-built course catalog is geared for and from the perspectives of different stakeholders in our ecosystem, providing access to course materials that cover a broad coverage of topics, from our Litigation Finance 101 class, to more complex subject matter like Litigation Finance Economics and Finance Ethics," said Kelley. Meanwhile, LF2 also announced its new philanthropy initiative, LF2 Gives. Alternating between community action programs and legal services offerings, LF2 Gives will sponsor twice-yearly "Action Days" during which LF2 personnel will offer their time to serve communities in which LF2 operates. LF2 Gives' first community action program took place on Tuesday, July 11, 2023, when Chief Investment Officer, Michael German, Chief Operating Officer, Chris Baildon, and Summer Associate Director, Andrew Bourhill, volunteered with The Food Brigade in New Jersey, while Mr. Kelley volunteered with the Food Bank of the Rockies. "The launch of LF2U and LF2 Gives is one of the things I've been most excited about here at LF2 because we finally get to demonstrate our commitment to industry education and corporate social responsibility," said Mr. German. Mr. Baildon, added: "Through LF2U, we seek to promote clarity, insight, and comprehension of litigation finance, ultimately driving greater understanding of the industry. With LF2 Gives, we hope to make a positive impact in our communities through meaningful volunteering efforts." LF2 invites interested parties to learn more about these initiatives (or join us!) by visiting our website. LF2 looks forward to collaborating with legal services providers, lawyers, community action organizations, and others who share our commitment to service and education.
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Commercial

Litigation Finance Industry Faces ‘Rough Ride’ with Rising Inflation and Interest Rates

As LFJ outlined in an article last week, one of the key challenges facing the litigation funding market over the coming years is going to be uncertainty in the global economy, with governments battling to keep a lid on inflation. Despite an increase in disputes amid an economic downturn, funders will need to continuously monitor the situation and carefully adjust their strategies as market conditions continue to change. In a new article shared on LinkedIn, Hash Dave, managing director at Exton Advisors, offers some analysis on the impact of these challenging economic conditions on funders. Dave begins by setting out the primary issue: that litigation finance, just like any other asset class, is being ‘repriced’ and with that will come the inevitable increase in the cost of litigation financing. Additionally, Dave argues that we can expect to see more sophisticated investors turning their attention away from litigation finance and towards asset classes that are “more liquid, collateralized, scalable”. Dave suggests that under such conditions, there will be lawsuits which no longer appear financially viable for most funders, but this may not result in an overall drop in the volume of disputes due to the tremendous supply of third-party funding that is entering the market. Looking at specific areas that may suffer, Dave highlights mass torts as one type of disputes that could be at risk, due to its traditional reliance on “a series of refinancings that may require law firms to foot the economic pain”, which only become more costly moving forward. To survive these challenges, Dave argues that whilst solutions such as insurance and secondary market deals can alleviate the pain to an extent, the industry needs “to work together on innovations that can boost liquidity and change risk profiles in terms of downside protection and duration.”  Whilst Dave concludes by predicting that not all market participants will survive these turbulent times, he states that the goal should be “to ensure that the industry collectively retains the energy and momentum that’s been building for the past decade.”
Commercial Deals

Regional UK Law Firm Makes Acquisition, Supported by Funding from Harbour

One of the largest areas of growth for litigation funders in the next decade could be through funding law firms, either via broader portfolio funding structures or the more emergent trend of funders taking ownership stakes in law firms. Whilst there has been more focus on developments in regulations governing law firm ownership in the United States, a new story suggests that the UK may also be a viable setting for increased funder involvement in law firm growth. An article by The Law Society Gazette highlights the news of two regional law firms from the Midlands, Talbots Law and Rothley Law, who are expanding their operations through acquisitions. The latter of these acquisitions is of particular interest, as according to Gazette’s reporting, Rothley Law’s acquisition of Shoosmiths’ ‘private client practice’ is being backed by leading litigation funder, Harbour. Whilst the value of the acquisition has not been disclosed, this move aligns with Harbour and other funders’ ambitions to take an increasingly active role in the funding and ownership of law firms. John Verrill, chair of Rothley Law, highlighted that this acquisition is only one part of their growth plan, stating: “with Harbour’s backing, we have the flexibility and appetite for further acquisitions, with a number of potential opportunities clearly in our sights.”
Announcements Commercial Deals

LionFish Announces Acquisition by Funds Managed by Foresight Group

Funds managed by Foresight Group (“Foresight”), a leading, listed, sustainability-led alternative asset investment manager with £12 billion* of assets under management, have completed the acquisition of LionFish Litigation Finance Limited (“LionFish”) from AIM-listed professional services firm RBG Holdings Plc (“RBG”). LionFish was launched in May 2020 as a subsidiary of RBG. Built on strong principles and a solid operating infrastructure, LionFish quickly established its presence in the market and experienced rapid growth. To accommodate its growth, LionFish entered a co-investment arrangement with Foresight in February 2022. Intended to be the first of many, this coinvestment afforded LionFish the ability to expand its capital investment base and reduce its reliance on RBG’s balance sheet. In December 2022, RBG announced intentions to refocus on professional services and received several bids to acquire the LionFish business. Foresight’s bid was unique and stood out given its patient capital base, long-term commitment and alignment with LionFish’s ambitions and investment thesis. Foresight’s acquisition will provide LionFish with the stability and support to leverage its team, its principal investment model, and its operational efficiency. Operationally, LionFish will remain an independent company run by management team Tets Ishikawa and Tanya Lansky, with general oversight from a soon to be announced and newly appointed board. Its existing transactions will continue to be honoured and capital for new investments made available immediately. Tets Ishikawa, Managing Director of LionFish, said: “We would like to thank RBG Holdings Plc for their support in launching LionFish. Although we had originally envisaged the partnership to last for many years, the lessons we learnt together and RBG’s decision to refocus on professional services has given us the opportunity to find a more suitable, long-term and exciting partner. Tanya and I would like to thank both RBG and Foresight for making this transaction possible.” Oliver Bates, Senior Private Debt Manager at Foresight, added: “We have followed the litigation finance market for several years and we have always been impressed by LionFish’s model and commercial approach. Having followed it closely over the last couple of years, it was always clear to us that Foresight could provide a stronger platform on which LionFish could fulfil its true potential. We are therefore delighted with this acquisition and are excited and confident that under our ownership, Tets, Tanya and the LionFish team will achieve their business ambitions.” Tanya Lansky, Managing Director of LionFish, comments: “Foresight’s deep and patient capital base, long-term commitment, and its understanding and support of our model made it stand out. Tets and I would like to thank Foresight for their faith and commitment in us and in our business. Notwithstanding the situation since last year, we have maintained a strong pipeline which we look forward to leveraging and continuing to grow in this exciting next chapter.”

ABOUT FORESIGHT GROUP

Foresight Group was founded in 1984 and is a leading listed infrastructure and private equity investment manager. With a long-established focus on ESG and sustainability-led strategies, it aims to provide attractive returns to its institutional and private investors from hard-to-access private markets. Foresight manages over 400 infrastructure assets with a focus on solar and onshore wind assets, bioenergy and waste, as well as renewable energy enabling projects, energy efficiency management solutions, social and core infrastructure projects and sustainable forestry assets. Its private equity team manages eleven regionally focused investment funds across the UK and an SME impact fund supporting Irish SMEs. This team reviews over 2,500 business plans each year and currently supports more than 250 investments in SMEs. Foresight Capital Management manages four strategies across seven investment vehicles. Foresight operates in eight countries across Europe, Australia and United States with AUM of £12 billion*. Foresight Group Holdings Limited listed on the Main Market of the London Stock Exchange in February 2021. https://www.foresightgroup.eu/shareholders

ABOUT LIONFISH LITIGATION FINANCE LIMITED

LionFish is a market-leading litigation funder, providing efficient, effective financing solutions to high value dispute assets. www.lflf.co.uk
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Announcements Commercial Fundraising

Aristata Capital Completes Final Closing of Impact Litigation Fund Dedicated to Driving Positive Social and Environmental Change

Aristata Capital is pleased to announce that it has secured nearly £52 million of capital at final closing for its first impact litigation fund, Aristata Impact Litigation Fund I LP (AILF I). Aristata is a pioneer in the field of social and environmental litigation, bringing an impact investing lens to commercial litigation funding to seek attractive, uncorrelated financial returns while delivering positive, systemic social and environmental change. Aristata offers the first truly blended approach to litigation funding allowing investors to combine both the commercial rigour of traditional litigation funding methodologies and the success of public interest litigation strategies to drive social and environmental change. Aristata is building a global portfolio of claims covering areas including human rights, environmental protection, climate change, equality, indigenous rights, access to justice and a range of other critical cause areas. Aristata Capital’s first fund is anchored by Capricorn Investment Group’s Sustainable Investors Fund and The Soros Economic Development Fund. LPs include foundations, impact fund-of-funds, family offices in the US, UK, Europe, and Australia, as well as a number of high net worth individuals. “Aristata is proud to launch the first impact commercial litigation fund, and to have exceeded our fundraising target in a challenging market. The claims we are seeing and supporting demonstrate the need for funders focused on driving positive social and environmental impact - we want to close the justice gap in commercial litigation, where the system favours commercial strength and penalises those without.” said Rob Ryan, CEO of Aristata Capital. “We are proving that investors don’t have to choose between achieving financial returns and driving social and environmental impact”. “Since 2000, Capricorn has backed multiple new partnerships focused on specific areas of impact or sustainability, such as renewable energy infrastructure, clean technology, health and wellness, financial inclusion, and sustainable asset management.” Said Eric Techel, Partner at Capricorn. “Aristata is a great fit with this strategy, and we are excited to support the team as it builds the platform and establishes the funding of commercial litigation, with positive and measurable social impact, as an asset class.” Aristata seeks to create a safer and more equitable world by financing legal cases that empower historically marginalised voices, equalize unjust power dynamics and catalyse systemic change that protects the environment and communities. Aristata investments seek to secure compensation for individuals and communities and other entities affected by damaging commercial activity, to unlock the impact potential of similar cases to provide scalability and to generate successful legal outcomes that pressure corporations and industries to change behaviour. “We are delighted to partner with Aristata on this first of its kind impact litigation,” said Georgia Levenson Keohane, CEO of the Soros Economic Development Fund.  “This investment marries Open Society’s longstanding commitment to strategic litigation with innovative finance, as we test how private sector resources can enhance accountability on human rights and environmental protections.” Aristata operates in markets across the globe, sourcing claims from law firms and civil society wherever corporate activity causes harm. Aristata’s experienced litigation funding team is supported by an Investment Committee made up of experienced legal professionals and an Impact Advisory Board of international thought leaders across a diversified range of cause areas. About Our Investors: Capricorn Investment Group is one of the largest mission-aligned firms in the world and has since its inception in 2000 grown to manage more than $9 billion in multi-asset class portfolios for institutional investors through their range of impact-focused strategies. Their Sustainable Investors Fund (SIF) is a private equity partnership whose investment objective is to create significant value through ownership and early-stage investment in public and private asset managers who incorporate sustainability as a key driver of investment returns. The firm has offices in New York City and Palo Alto and was born from a belief that sustainable investment practices can enhance risk-adjusted returns. Underlying this investment approach is a deep desire to demonstrate the huge investment potential that resides in breakthrough commercial solutions to the world’s most pressing problems. The Soros Economic Development Fund (SEDF) is the impact investing arm of the Open Society Foundations (OSF).  Founded in 1997, SEDF has committed over $500 million to support Open Society’s commitments to democracy, human rights and social justice across the globe.
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