As we continue to see a growing number of high profile class actions in Australia, industry leaders are keen to look at how the class action landscape in Australia will evolve and how it can be improved.In a post on LinkedIn, The Association of Litigation Funders of Australia (ALFA) announced the agenda for its upcoming Future of Class Actions in Australia conference, which will be held at Herbert Smith Freehills’ Sydney office on 27 October 2023. The half-day event will cover a wider range of topics including the current trends in Australian class actions, the future of court approval and settlement administration, and potential strategies for reducing the costs of class actions.The event will be bookended by two keynote addresses, opening with an address from the Hon Justice Michael Lee, Federal Court of Australia, and closing with a keynote from the Hon Justice Sarah Derrington AM, Federal Court of Australia.The three panel sessions during the afternoon will feature a range of speakers including senior leaders from Australia’s top law firms, funders, and insurers. Among the representatives from litigation funders set to speak are Stuart Price, CEO of CASL, and Kristen Smith, portfolio manager and senior investment manager at Omni Bridgeway.Limited in-person tickets for the vent are still available here, whilst unlimited virtual passes can be purchased here.
Whilst industry commentators are still debating the potential impact of the Supreme Court’s PACCAR ruling on the enforceability of litigation funding agreements (LFAs), new court rulings in related practice areas are being analysed to see whether they offer lessons for funders post-PACCAR. The most notable in recent weeks has been a Court of Appeal ruling which dealt with the issue of severance of terms for a conditional fee agreement (CFA). A new insights piece from LCM’s senior investment manager, James Foster, examines the recent decision from the English Court of Appeal in Diag Human v Volterra Fietta [2023] EWCA Civ 1107, looking at how the ruling may prove instructive on the issue of severance in LFAs, in a post-PACCAR world. This issue of the ‘severance of offending contract provisions’, is particularly important for LFAs which not only have a clause for a funder’s return to be calculated from a percentage of damages, but also have additional clauses for the return to be calculated on a different basis.Foster begins by highlighting the existing case law from the Supreme Court’s ruling in Egon Zehnder Ltd v Tillman [2019] UKSC 32, which lays out the conditions that must be met for contracts to remain effective after the removal or severance of an unenforceable provision. He goes on to examine the Court of Appeal’s judgement and reasoning, highlighting the court’s position that in this case, ‘public policy considerations alone precluded severance, irrespective of compliance or non-compliance with the three stage test.’Turning to the decision’s relevance to LFAs, Foster explores whether an LFA, with additional clauses laying out differing methods for calculating a funder’s return, would violate the third condition of the Tilman ruling that specifies that the removal of an unenforceable provision must not ‘change the character of the contract that it becomes “not the sort of contract that the parties entered into at all”.’ Foster argues that severance of one provision for a funder’s return does not change the nature of the contract that the parties willingly entered into, as the use of any other provision for a funder’s return means that, ‘in all other respects the bargain struck between the parties in the LFA would be exactly the same.’Furthermore, Foster argues that the public policy considerations are unlikely to be applicable in relation to LFAs, stating that, ‘it would not be possible to argue (as it might be in the case of lawyers who act under non-compliant CFAs or DBAs) that the reward arrangements pre-severance were both illegal and unenforceable and so should not be saved by severance.’In recent days, other industry experts have also offered their own views on the impact of the Diag Human ruling. Martyn Griffiths, of Gatehouse Chambers, acknowledged that funders and their opponents will make differing arguments as to the applicability of the Diag Human decision to LFAs. However, he concluded his analysis by emphasising that the courts ‘will have to consider whether the funder should face the full consequences of the un-enforceability of their agreement or whether to allow those consequences to be ameliorated or avoided by permitting severance or the payment of a quantum meruit.’In a piece for Sentry Funding on LinkedIn, Rachel Rothwell suggested that the Court of Appeal’s judgement ‘may not be seen as particularly helpful to the plight of litigation funders’, and that the main lesson is that for those ‘drawing up fee agreements with clients, make sure you get it right.’
Susanna Taylor is Head of Investments – APAC, for Litigation Capital Management (LCM). Susanna leads LCM’s team of Investment Managers in Australia and Singapore and is responsible for overseeing the sourcing, due diligence and management of LCM’s investment activities across the APAC region. Susanna is a highly experienced and skilled operator being active in the litigation funding industry since 2014 when she joined LCM. Since that time Susanna has been responsible for sourcing, underwriting and managing a large and diverse portfolio of dispute projects consisting of commercial disputes, class actions, insolvency claims and international arbitration. Susanna sits on LCM’s investment committees for both APAC and EMEA and is intimately involved in the operational aspects of LCM’s business, taking part in regulatory and compliance and capital raising activities, investor relations and the expansion of LCM to new jurisdictions. Prior to joining LCM in 2014, Susanna was a litigation specialist with Norton Rose Fulbright in Sydney where her practice canvassed class actions, financial institutions disputes, contentious regulatory work (including work for the Australian Competition and Consumer Commission) and corporate disputes. Before joining Norton Rose Fulbright, Susanna practised in London for UK firm Hammonds Suddards Edge where her focus was on construction litigation. Susanna’s Chambers and Partners profile describes her as “one of the top operators in the industry,” and as “an extremely impressive litigation funder with a strong ability to cut to the commercial reality of claims.”Company Name & Description: LCM specialises in providing bespoke dispute finance solutions to facilitate the pursuit and successful recovery of funds from legal claims, while protecting our clients from the downside risk associated with disputes. Founded in 1998, LCM is one of Australia’s most experienced and successful disputes finance companies. LCM has completed over 260 cases and has assisted hundreds of companies and individuals in achieving significant recoveries from claims that, without LCM, may not have been pursued due to the associated costs and risks. All of LCM’s Investment Managers are former litigators with the level of experience required to facilitate successful outcomes in disputes. LCM’s team is highly skilled in the assessment of claims and in providing strategic assistance throughout the process of determining the dispute. LCM has an unparalleled track record, driven by effective project selection, active project management and robust risk management. LCM’s capability stems from being a pioneer of the industry with more than 25 years of disputes finance experience. LCM is listed on AIM (at the London Stock Exchange), trading under the ticker LIT. Company Website https://lcmfinance.com/ Year Founded: 1998 Headquarters: Headquartered in Sydney, with offices in London, Singapore, Brisbane and Melbourne Area of Focus: Arbitration, Insolvency Claims, Commercial Claims, Class Actions Member Quote: “Disputes finance is a risk management tool which allows a variety of claimants from small to large to leverage their dispute assets in order to transfer the costs and risk of a dispute to a third party funder. Being involved in structuring these finance solutions and sitting alongside claimants to assist them to reach a successful outcome makes this a very rewarding industry to be a part of“.
Ireland's litigation funding laws differ from those of the United Kingdom and other common law jurisdictions. Dispute resolution investment in Ireland is broadly illegal under champerty and maintenance crime statutes, however, Ireland's Courts and Civil Law Act 2023 offers a new legal framework that permits the use of third party funding products and services for international arbitration proceedings in commercial disputes. Mondaq reports lawmakers in Ireland are embracing litigation finance as a tool for citizens' access to justice. The Representative Actions for the Protection of the Collective Interests of Consumers Act 2023 is a positive step to decriminalize third party funding in international arbitration in Ireland. Furthermore, recommendations to expand legalization of litigation funding vehicles in Ireland have included insolvency, liquidation, receivership and bankruptcy actions. The Law Reform Commission continues to explore and examine policy considerations that decriminalize litigation investment in Ireland. According to Mondaq, Ireland's Department of Justice is working to publish additional policy findings on litigation finance by the second quarter of 2024.
The video game industry has seen tremendous growth over recent decades, with research from PwC projecting that it could generate more than $300 billion in revenue by 2026. However, this rising tide has also brought with it allegations that some of the largest gaming companies have engaged in anti-competitive and anti-consumer practices, resulting in claims being brought with increasing regularity.A LinkedIn post and announcement from Milberg London LLP reveal that the law firm has secured ‘a substantial funding package’ from Bench Walk Advisors to bring a claim against Valve Corporation, one of the world’s largest gaming companies. The opt-out competition claim focuses on allegations that Valve’s digital distribution service and storefront, Steam, used ‘excessive pricing and anti-competitive price parity clauses, with the aim of ensuring fair competition in the digital gaming marketplace.’The intended claim will be filed with the UK’s Competition Appeal Tribunal (CAT), with Vicki Shotbolt, founder and CEO of Parent Zone, acting as the proposed class representative. Shotbolt is working with Milberg London, as well as barristers from Monckton Chambers including Robert Palmer KC, Julian Gregory, and Will Perry. This is notably the second opt-out claim that Milberg London has brought against a gaming corporation, having already brought a claim, worth up to £5 billion, against Sony Playstation for alleged abuses of its monopolistic position.
Silver Bull Resources, Inc. (TSX: SVB, OTCQB: SVBL) (“Silver Bull” or the “Company”) is pleased to announce that following the entering into the litigation funding agreement with Bench Walk Advisors LLC (the “LFA”), the Company has established a Management Retention Agreement (“MRA”), which is a long-term incentive program to retain key personnel of the Company who have important historical information and knowledge to contribute towards the Claim.The MRA provides that if the international arbitration claims against Mexico for breaches of its obligations under NAFTA (the “Claim”) is successful and the Company receives damages proceeds, 12% of the net proceeds will be directed to the MRA for distribution to its participants, which include Timothy Barry, President, CEO and Director, Brian Edgar, Chairman of the Board, Christopher Richards, CFO, Juan Manuel Lopez Ramirez, and David Xuan.Each participant must satisfy specific Claim related duties and if they do so, each participant may be entitled to a pre-defined percentage of the proceeds received by the MRA.Certain participants under the MRA constitute related parties of the Company and accordingly the MRA constitutes a “related party transaction” of the Company under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The Company is relying on the exemption from the requirement to obtain a formal valuation pursuant to section 5.5(g) of MI 61-101, which provides an exemption where the criteria set out therein are met.The Toronto Stock Exchange (the “TSX”) has provided their conditional approval of the MRA, including that the MRA be approved by the Company’s disinterested shareholders at the next Annual Meeting of Shareholders, which will also be sought in compliance with the requirements for minority shareholder approval under MI 61-101.
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.
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.
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.
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