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Commercial

Hedge Fund says Burford Capital is Undervalued by the Market

Much of the information about litigation funders’ business models is cloaked in confidentiality, making it difficult to assess how the rest of the market values those funders who are publicly traded. However, a recent investor letter from a hedge fund offers insight into the way investors view the industry’s top funders. In Greenhaven Road Capital’s ‘Main Fund Q3 2023 Investor Letter’, the boutique hedge fund has included a spotlight on its top holdings which includes Burford Capital, the publicly traded litigation funder. In the investor letter, Scott Miller, the founder of Greenhaven Road Capital, highlighted Burford’s recent win in the YPF case against Argentina which resulted in a multi-billion dollar award being ordered. Miller notes that whilst Argentina is likely to attempt to avoid paying the full award and therefore Burford will likely end up taking a discount on their portion of the award, he still believes that “the returns should be eye-popping.” Miller also argues that “if Burford is going to be successful, a few massive cases like YPF will drive a significant portion of the returns.” He goes on to explain his firm has “spent significant energy looking at other cases that Burford has funded,” and through this research has come to the conclusion that “there is reason to believe that Burford has line of sight to another multibillion-dollar award where collectability is far less of an issue than with YPF.” Based on this research and on Burford’s previous successes, Miller concludes his analysis by saying that he believes “Burford is worth far more than the $13 per share Mr. Market has ascribed to it.”
Announcements Commercial Regulatory Issues

Burford Capital, PLI Press Publish Comprehensive Reference on Commercial Legal Finance

Global legal finance company Burford Capital announces the release of a new book providing an indispensable overview of the industry and practical introductions to the use of commercial litigation and arbitration finance in key jurisdictions worldwide. Published by PLI Press, a division of Practising Law Institute, Commercial Legal Finance addresses key questions about legal finance structures, pricing, and mechanics, providing a step-by-step overview of the process for obtaining legal finance. Covering key jurisdictions including the US, England & Wales, Europe, Asia, and Australia, the book addresses ethical considerations for litigants and lawyers, key considerations for commercial litigation, patent litigation and arbitration financing, and a legal finance glossary of terms. “In-house counsel with responsibility for litigation and arbitration, as well as law firm practitioners advising clients in this area, can benefit from a comprehensive reference to the commercial legal finance industry that offers practical guidance on the mechanics of litigation and arbitration finance in key jurisdictions and practice areas around the world,” says David Perla, Co-Chief Operating Officer at Burford Capital, who co-edited the treatise with Co-Chief Operating Officer Aviva Will and Burford’s Suzanne Butters. For more information and to order, visit pli.edu. About the Author Burford Capital is a 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. About Practising Law Institute (PLI) Founded in 1933, Practising Law Institute is a nonprofit learning organization dedicated to keeping attorneys and other professionals at the forefront of knowledge and expertise. PLI provides accredited, continuing legal and professional education programs delivered by more than 4,000 volunteer faculty, including top experts across practice areas. Additionally, PLI publishes a comprehensive library of treatises, course handbooks, answer books, and journals, also available through the PLI PLUS online platform and app. The essence of PLI’s mission is a commitment to the pro bono community. Based in New York, PLI also has an office and Conference Center in San Francisco. Visit www.pli.edu to learn more.
Case Developments Commercial

$180 Million Settlement Reached in Australian ‘Stolen Wages’ Class Action

There are few cases that epitomize the idea of litigation funding providing ‘access to justice’ than those lawsuits which represent indigenous communities who have suffered harm at the hands of their government, and which seek to provide compensation for these people. The announcement of a settlement in the Stolen Wages class action in Australia represents the tangible positive impact that funders can have when their capital is dedicated to achieving legal redress for those communities who have suffered discrimination and persecution. In a post on LinkedIn, Litigation Lending Services (LLS) announced that the Western Australia (WA) government had agreed to a settlement in the class action brought on behalf of thousands of Aboriginal Australians who were not paid part or all of their wages between 1936 to 1972. The state government agreed to pay up to $180.4 million to eligible workers or their surviving relatives who were affected by the discriminatory legislation in WA.  The class members were represented by Shine Lawyers, with LLS providing funding for the litigation. As part of the settlement, the WA government will issue a formal and public apology in the state parliament, addressed to both surviving and deceased Aboriginal workers. The full settlement will still need to be approved by the Federal Court of Australia, who will determine the exact amount of compensation to be given to each family. Shaun Bonétt, Chair of LLS, said that the settlement was “a historic day in the fight against this injustice,” and expressed the hope that “this settlement provides some comfort to group members who had wages stolen and to the families of workers that are now deceased.” In a post from Shine Lawyers, the firm’s joint head of class actions, Vicky Antzoulatos praised the agreement as “a victory for the many thousands of First Nations people we represent.” She went on to state: “Financial compensation is one way to acknowledge the suffering of First Nations people. It doesn’t correct the past but offers a way forward.” As LFJ reported, this is not the first time that Shine Lawyers and LLS have worked together to bring a class action on behalf of indigenous Australians and then to successfully reach a settlement with the government. In April of this year, the NT Stolen Generations lawsuit’s $50m settlement with the federal government was approved by the NSW supreme court.
Commercial Legal Innovation

The Legal 500 Releases 2024 Funder Rankings and Shares Industry Insights

Legalese has released the latest edition of The Legal 500 Litigation Funding – The UK and US Rankings for 2024, highlighting its top ten funders in the UK and top eight funders in the US. Legalese explains that the rankings are based on several factors, including areas such as: funder size and experience, volume and value of funded cases, transparency of operations, capital adequacy, and longevity. As part of the published rankings, Legalese also includes observations on the current state of the industry from senior leaders at the leading litigation funders, as well as from law firms who work with these funders. Speaking to the maturation of the industry, Richard Wise, disputes partner at Addleshaw Goddard, emphasised that “litigation funding is here to stay” but noted that it is also “going through a stage of evolution at the moment.” Looking from the insider’s perspective at how funders are evolving, Woodsford’s CEO, Steven Friel added that “some of the more successful players in the litigation funding field have diversified – acquiring or building complementary businesses.” Unsurprisingly, the hot topic of the Supreme Court’s PACCAR ruling was discussed, with Adrian Chopin, co-founder and managing director of Bench Walk Advisors, saying that the judgement is “slightly more than a storm in a teacup, but the sky has not fallen and nor will it fall.” Funder Rankings This year’s Tier 1 rankings for funders in the UK include Bench Walk Advisors, Harbour Litigation Funding, and Therium. While in the US, the three Tier 1 ranked funders are Burford, Omni Bridgeway, and Parabellum Capital. Bench Walk Advisors and Parabellum Capital are new entrants to the Tier 1 listing, having each previously been listed in their country’s Tier 2 rankings last year. There is one new addition to the UK rankings this year, as Asertis joins in Tier 3, having been listed as a ‘Funder to watch’ in the 2023 rankings. Asertis is highlighted for its expertise ‘in funding commercial disputes, with an emphasis on group actions, enforcement, and insolvency.’ There are no new additions to the US rankings this year, however, Lake Whillans Capital Partners has been removed from Tier 3 and is no longer present in the rankings. Individuals As was the case in 2023, the Legal 500 rankings still do not place individuals at these funders in a tiered structure. However, in a new addition to the 2024 rankings, it now includes a list of eight ‘industry leaders’ who are highlighted for their work in the industry:
  • Susan Dunn – Harbour Litigation Funding
  • Jonathan Barnes – Woodsford
  • Ayse Yazir – Bench Walk Advisors
  • Adrian Chopin – Bench Walk Advisors
  • Dai Wai Chin Feman -Parabellum
  • Neil Purslow – Therium
  • Patrick Meloney – LCM
  • Matthew Blumenstein – Statera Capital· 
In addition to these industry leaders, the write-ups for each funder includes mentions of key contacts at each company. The full 2024 UK and US Rankings for Litigation Funding can be found here.
Commercial

ALFA Launches Legal Finance Insights Podcast

In a post on LinkedIn, The Association of Litigation Funders of Australia (ALFA) announced that it has launched its own Legal Finance Insights podcast, with two episodes already live and available to listen to. The new in-house podcast is hosted by Pip Murphy, who serves as ALFA’s CEO and as a non-executive director and senior investment manager for CASL. The inaugural episode of the Legal Finance Insights podcast begins with Murphy providing an overview of ALFA’s structure and its mission, introducing ALFA’s members and associate members, along with the individuals that make up ALFA’s board. The podcast’s second episode sees Murphy joined by Maya Shallita, investment manager at Balance Legal Capital, as they offer an introduction to the world of litigation finance, explaining how the industry operates and the benefits it provides for both law firms and businesses. Future episodes of the podcast are set to feature ALFA’s members as they provide insights into “their experiences and what they are seeing, and predicting for the future of legal finance in Australia.” Episodes of the Legal Finance Insights podcast can be accessed through Spotify or Apple.
Announcements Commercial

Litica Broadens Global Reach with New Cologne Office in European Expansion

Litica, the leading ATE and litigation insurance provider, recently announced at the Annual International Litigation Finance Forum its expansion into Europe, with a new office in Cologne (Köln) Germany. Other offices include London UK and Sydney Australia, with further expansion in the coming months.  Litica has appointed Ed Yell to lead this expansion. As Managing Director of Litica Europe GmbH, Ed is responsible for developing litigation risk opportunities across the European Economic Area (EEA), working extensively with litigation finance providers, brokers, law firms and in-house counsel teams.   “Litica’s launch in Cologne was essential to ensure that we can offer a more efficient and focused solution to a rapidly growing European litigation finance market” – Ed Yell, Managing Director of Litica Europe GmbH.    As the world's leading ATE and litigation insurance provider, Litica is on a mission to empower access to justice in the 21st century. The company strives to provide comprehensive litigation-focused solutions and products  Key highlights: 
  • Established in 2019, Litica was founded and is led by qualified lawyers and financial services professionals, Stephen Bolster ACII and Steve Ruffle. 
  • The experienced in-house legal team has the largest number of legally trained underwriters in the market, with expertise stemming from prominent law firms and international litigation funders.  
  • Litica has attracted the largest panel of insurers (company and Lloyd’s markets) and is permitted to underwrite policies globally. 
  • Litica has provided over EUR €1bn in insurance capacity across a range of litigation & arbitration risks. Most litigation and arbitration case types being heard across the globe can be insured - from €25,000 defamation disputes to multi-billion-dollar class actions. 
  • Underlining Litica’s expertise in the field of litigation, Litica has recently been ranked ‘Band 1 – Litigation Insurance Underwriters 2023’ by Chambers and Partners, with Steve Ruffle and Ed Yell recognised as ‘Band 1’ in the individual category; Eliza Finch was recognised as a ‘WWL Thought Leader - Third Party Funding’; and Stephen Bolster as a ‘Lawdragon Global 100 Leaders in Litigation Finance’. Razi Mireskandari, the Managing Partner and Head of the Dispute Resolution team at Simons Muirhead & Burton (SMB), was recently announced as Litica's new non-executive director.
Case Developments Commercial

CAT Grants CPO Application in Apple Lawsuit, Pending Resolution of Funding Issues

In the aftermath of the Supreme Court’s PACCAR ruling on litigation funding agreements (LFAs), industry observers have been keen to see how lawsuits with pending applications before the Competition Appeal Tribunal (CAT) would be treated. In a new judgement released today, we are seeing signs that the CAT may be taking a pragmatic approach to the issue of funding, whilst still allowing meritorious proceedings to move forward. An article in Reuters provides an update on the case of Mr Justin Gutmann v Apple Inc., Apple Distribution International Limited, and Apple Retail UK Limited, as a CAT tribunal’s ruling granted the application for a collective proceedings order (CPO). The lawsuit, which sees Mr Gutmann acting as the proposed class representative (PCR), seeks to represent approximately 24 million consumers over a claim that Apple concealed battery issues with their iPhone products. The tribunal’s written judgement states that the ‘the requirements of a CPO are met in this case, subject to the resolution of the terms of funding.’ The issue of Mr Gutmann’s third-party funding arrangements were addressed earlier in the judgement’s introduction, with the tribunal noting that the PACCAR ruling raises issues ‘concerning the legality of the PCR’s funding arrangements.’ The tribunal went on to highlight that Mr Gutmann has already ‘indicated that he may need to alter his funding arrangements and he is actively pursuing his options.’ Whilst the judgement noted that neither party had asked the CAT to ‘make a ruling on the current or proposed new funding arrangements’, it also emphasised that the certification for the proceeding was provisional and still ‘subject to further submissions as to funding arrangements.’ In response to the CAT’s ruling, Apple referred back to a previous statement denying the allegations and categorically stating that the company “have never – and would never – do anything to intentionally shorten the life of any Apple product, or degrade the user experience to drive customer upgrades."  Mr Gutmann, who is being represented by law firm Charles Lyndon, described it as “a major step towards consumer justice." In a post on LinkedIn, Eleanor Leedham, of counsel at Charles Lyndon, stated that “the regime may still be in its infancy but rulings like this demonstrate that it is working, and it is a vital system for protecting consumers from abuse by tech behemoths and providing damages where they have suffered loss.”
Announcements Commercial People Moves

Ben Herbert Departs LFG for Miller Barondess

In a post on LinkedIn, Ben Herbert announced that he would be departing Law Finance Group (LFG) to take up a new role as partner and co-lead of the IP practice at Miller Barondess.  Commenting on the move in a press release from Miller Barondess, Herbert stated: “I’m thrilled to join the talented team at Miller Barondess, a firm renowned for excellence inside and outside the courtroom.  I look forward to helping build upon the firm’s strong track record of success, leveraging its capabilities to provide clients with exemplary service and sophisticated representation in the types of patent and trade secret matters I have focused on throughout my career.” Skip Miller, founding partner of Miller Barondess, stated that Herbert would be “instrumental in further expanding the firm’s IP practice.” Sasha Frid, also a founding partner of the firm, described Herbert as “a highly skilled and respected patent and technical trade secret litigator whose expertise will complement the capabilities of our IP team.” Herbert’s departure from LFG comes nearly a year after he joined the litigation funder, having spent the last 10 months leading LFG’s operations in Los Angeles originating new business, and underwriting LFG’s transactions and investments in IP litigation. Prior to joining LFG, Herbert spent over 10 years at Kirkland & Ellis, where he was also a partner in the firm’s intellectual property litigation group.
Commercial Regulatory Issues

Law Professor Argues Some Funders ‘Will Never Be Passive Partners’

Debates over the role of third-party litigation funding have grown increasingly contentious over recent years, with interest groups and policymakers wading into the discussion with assertions that funders operate in the dark and have exerted control over litigation processes and outcomes. A new academic essay dives into this topic with renewed focus, offering an assessment of the current funding landscape and specifically highlighting the role of ‘opaque capital’ as an aggressive and chaotic force in the funding of torts. In an article published in Volume 133 of The Yale Law Forum, Samir D. Parikh, professor of law at the Lewis & Clark Law School, examines the relationship between ‘opaque capital and mass-tort financing,’ and the dangers that third-party funding may pose to mass torts. In the essay, he starts from the position that litigation funders ‘will never be passive partners,’ because ‘all the tools necessary for a financier to create and control a mass-tort case are available and unregulated.’  At the heart of Parikh’s paper is the idea of the ‘Alchemist’s Inversion’, which he describes as ‘the process of employing unethical and potentially illegal tactics to create, enhance, and marshal apparently low-value claims with the hope of turning them into gold.’ Whilst he is quick to emphasise that this kind of behaviour is not currently widespread among funders, he suggests that lessons can be learned from the actions of opaque financiers in other markets and that ‘recent cases demonstrate that the arsenal is available, and deployment is underway.’  In his examination of the funding market, Parikh separates third-party financiers into three types: dedicated, sporadic, and opaque capital.  The ‘dedicated funder’ category encompasses the major litigation funders who have ‘an arguably transparent business model and willingness to engage in public debate about litigation finance.’ Parikh’s ‘sporadic funders’ are categorised as smaller players who operate less systematically, often focusing on smaller lawsuits such as personal-injury claims, and who only ‘receive public scrutiny only when they engage in some sort of malfeasance or unethical conduct.’  Most worrying to Parikh are the ‘opaque capital’ financiers, a group of ‘aggressive hedge funds and private-equity firms’ whose ‘chase for yield requires direct engagement in high-stakes, big-ticket disputes.’ He argues that these opaque funders are notable for their desire to increase their control over the outcome of litigation by ‘exerting leverage at each process point’, with a relationship between the funder and claimant which ‘allows clandestine maneuvering and influence that could undermine cases and litigants in unforeseen ways.’ The rest of the article provides an analysis of how these funders ‘can create chaos in this space’, looking at various case studies and examples to argue that ‘creation and control are the governing dynamics.’ Whilst Parikh describes the article as ‘a primarily descriptive treatment in order to spotlight the challenges posed by opaque capital,’ he concludes by suggesting that it also shows the need for reform and the introduction of measures to ensure greater oversight of funder activities. He puts forward the idea that such proposals could include enhanced disclosure requirements for funding arrangements, introducing ‘a fee to file a claim’, as well as reforms to the ‘regulation of claims marshalling’ and ‘the ways courts and attorneys verify claims. The essay can be read in full here.