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Commercial Deals

Shareholders and Funders Find Common Ground in ESG Lawsuits

With emphasis and attention being placed on companies’ commitment to their ESG agendas, net-zero targets and broader corporate governance, it is unsurprising to see an uptick in litigation focused on this area. The combination of investors who are seeking to hold corporate boards to account for their failings or false statements, and a strong third-party funding industry, likely means that we will see this activity continue to increase over the coming years. An article by Bloomberg looks at the ongoing trend towards investor-led lawsuits that are being brought against corporations over their ESG failings or misstatements. The reporting highlights that many of these cases are using a specific area of UK law to bring their claims, namely Sections 90 and 90A of the Financial Services and Markets Act 2000. These legal provisions stipulate a company’s liability for making misleading statements or failing to disclose information which results in shareholder losses. According to the law firm Bryan Cave Leighton Paisner, there have been 13 cases brought under these provisions in the last decade. Of these 13 lawsuits, seven are still ongoing, four have been settled, with one successful and one failed claim apiece. James Hennah, partner at Linklaters, noted that whilst investors are becoming increasingly focused on ESG issues and shown a willingness to take these concerns to court, it is also true that “these claims are notoriously hard to bring, particularly for ESG issues.” Bloomberg’s article also notes that these investor-led lawsuits represent a good opportunity for litigation funders, many of whom see alignment with their own focus on ESG issues and can see the potential for lucrative returns on their investments. The reporting highlights a 2022 report from Woodsford that stated the funder was pursuing one of these types of claims under the FSMA provisions, having identified two multinationals that had made false statements to their investors. Emily Blower, managing associate at Simmons & Simmons, puts the proposition for third-party financiers in simple terms: “If a claim succeeds, there’ll be a recovery — that’s of interest to litigation funders.”
Announcements Case Developments Commercial

Attorney Lynwood Evans Appointed to Leadership Role in Camp Lejeune Water Contamination Litigation

Ward and Smith is pleased to announce that litigation attorney Lynwood Evans has been appointed to the Plaintiffs' Executive Committee in the litigation over contaminated water at Camp Lejeune. This appointment is particularly significant as we are quickly approaching the first anniversary of the Camp Lejeune Justice Act. This legislation paved the way for veterans, family members, and workers stationed on the base between 1953 and 1987 to seek compensation and justice for their suffering. However, because claims of this nature have never before been litigated, there has been substantial uncertainty and limited progress made since the passage of the Act despite tens of thousands of claims having been filed. Everyone is hopeful that this newly appointed leadership structure will provide the framework for progress. The Executive Committee assists and advises lead counsel and co-lead counsel in the undertaking of coordinating and conducting these proceedings. Its members also serve on subcommittees to execute a comprehensive litigation plan and ensure oversight, accountability, and coordination throughout the process. One of the subcommittees is the Law and Briefing Subcommittee, on which Mr. Evans will serve.  Reflecting on his new role, Mr. Evans stated, "I am honored to be appointed to the Plaintiffs' Executive Committee and the Law and Briefing Subcommittee in this crucial litigation. Together with the dedicated leadership team, I am confident that we will be able to work collaboratively with the Government and Court to create the framework within which these claims can eventually be brought to conclusion." Mr. Evans is now the third Ward and Smith attorney chosen for a leadership position in this historic litigation process. Recently, the US District Court of the Eastern District of North Carolina named attorneys Charles Ellis and Ret. Major General Hugh Overholt as Liaison Counsel. They are serving as intermediaries between the Court, the Plaintiffs' Leadership Team, and unrepresented victims. "We are encouraged by the appointment of 3 of our attorneys to leadership positions in this groundbreaking litigation and believe that their participation will help propel the legal process forward," remarked Brad Evans, Ward and Smith's Co-Managing Director. Ward and Smith's entire Camp Lejeune litigation team is dedicated to advocating for victims seeking justice for damage caused by the water contamination. Those interested can contact Ward and Smith directly or visit our website for more information about how we can help them begin their journey toward justice. About Ward and Smith Ward and Smith is a full-service law firm in North Carolina with offices in Asheville, Beaufort, Greenville, New Bern, Raleigh, and Wilmington. The firm has more than 100 attorneys knowledgeable in more than 35 practice areas, from agribusiness to zoning. For more information, visit https://www.wardandsmith.com/.
Commercial Deals

Harbour Funds Bamboo Law Acquisition of Regional UK Law Firm

As the environment for litigation funders in the UK is set to undergo some turbulence, we will likely see increased efforts by funders to diversify their activities beyond individual case funding. One sub-sector with enhanced activity is law firm funding, and for the second time in as many months, a funder has stepped in to provide capital for the acquisition of a law firm. An article by Insider Media reports on the acquisition of Hawkins Hatton by Bamboo Law, with Bamboo’s purchase financed by Harbour Litigation Funding. The deal to buy Hawkins Hatton was advised on by Ortus Group, which researched a range of potential buyers for the firm before selecting Bamboo as the ideal acquirer.  Colin Rodrigues, partner at Hawkins Hatton, stated the acquisition will provide “real opportunities for growth” and will allow the team to focus on delivering high quality services “while leaving administration in the hands of experienced professionals.” Speaking about the question, Bamboo’s founder, Michael Burne, emphasized that Bamboo “wants to do more sensible deals with great law firms like Hawkins Hatton”. As LFJ reported in July, this will not be the first law firm acquisition funded by Harbour in recent times, as the funder provided financing for Rothley Law’s acquisition of Shoosmiths’ ‘private client practice’.
Case Developments Commercial

Investors in RCR Class Action Raise Concerns Over Prolonged Duration

Investor-led class action cases are often viewed as lucrative targets for litigation funders, bolstered by the fact that they offer an opportunity to support investors in seeking legal redress against companies that have misled their shareholders. However, just like any litigation, the protracted duration of these cases can cause issues with investors, as we are seeing in a class action brought in New South Wales, Australia. Reporting by The Australian Financial Review reveals that investors in the collapsed engineering corporation, RCR Tomlinson, are growing frustrated with the continual delays and lack of progress in a class action brought against the company. The investors’ complaints focus on the lack of a settlement nearly five years after the class action was filed, even though the lawsuit has received funding from both Burford Capital and Omni Bridgeway. The Financial Review heard from investors with ongoing concerns that Quinn Emanuel Urquhart & Sullivan, the law firm leading the case, are not proceeding efficiently and may be benefiting financially from the prolonged duration of the litigation. Damian Scattini, partner at Quinn Emanuel, responded to these concerns by emphasising that they had been unsuccessful in reaching a settlement during a mediation on May 30, but were hopeful that a resolution could be achieved at the next mediation session on August 24. The article also highlights that this is not the first time the case has been hit by criticism, noting that a short seller report published by Muddy Waters in August 2019 alleged that Burford was “misrepresenting some of RCR’s financial data and any recovery from the class action would be “little to nothing”. Burford responded at the time by claiming that the report was “misleading” and not an accurate analysis of RCR.
Case Developments Commercial

Parties in Burford-Funded Argentina Claim Remain Far Apart on Payout Amount 

Cases with a prolonged duration and timelines that span nearly a decade are not uncommon for those in the business of litigation finance. However, even in cases where claimants receive a favourable judgement, there is always the issue of determining the size of the award, which further prolongs these lawsuits. A recent article by Bloomberg Law provides an update on the three-day trial in the case of Petersen Energia Inversora, S.A.U. v. Argentine Republic, which ended with the opposing parties still $6.5 billion apart on what they think the proposed payout should be. The case, which dates back to 2015, was brought on behalf of YPF SA shareholders, who argued that the Argentine government failed to offer a required payout after it re-nationalized the oil company in 2012.  As LFJ previously reported, Judge Loretta A. Preska ruled that Argentina was liable for the shareholders’ losses in a summary judgement in March of this year. During last month’s trial in the Southern District of New York, the shareholders argued that the payout could amount to as much as $16 billion, whilst Argentina provided a much lower estimate of $9.5 billion. The significant distance between the two amounts revolved around a number of key issues, including the date that the government took back control of YPF, with the two parties specifying dates that are three weeks apart.  The outcome of the trial has particular significance for Burford Capital who invested $16.6 million in the litigation, and following the March judgement, had stated that the final award could total in excess of $7.5 billion. This figure is notably lower than Argentina’s proposed payout. However, Judge Preska provided no estimate of when she might deliver a ruling on the payout and attorneys for the Argentine government have already made clear that they will appeal the award, regardless of the Judge’s ruling.
Case Developments Commercial

UK Legal Funder Confirms Appointment of Administrators

Since the Supreme Court handed down its judgement on litigation funding agreements last week, there has been much discussion of the difficulties that funders may face to survive in an environment rife with new challenges. However, a recent article offers an important reminder that regardless of this latest ruling, the legal finance industry has always been a challenging market for businesses to survive in. Reporting by The Law Society Gazette provides an update on the struggling law firm funder, VFS Legal, which recently confirmed that it had appointed administrators to handle payments. The article confirms that after VFS had informed the court that it would be appointing an administrator, Alvarez & Marsal Europe LLP has since announced that it would be handling the administration moving forward. Sarah Collins and Mark Firmin are named as joint administrators for the company. According to the Gazette’s reporting, VFS Legal had provided £150 million in funding to support over 25,000 cases across the last eight years, with law firms including Slater and Gordon having previously received funding. However, by 30 June 2022, VFS reportedly owed £38.7 million in repayments within the following year, primarily comprised of a bank loan for £35.6 million. The Gazette notes that VFS’ administrators are considering several routes forward for the company, which could include “finding a buyer for VFS Legal as well as collecting the current book debt from law firms.”
Announcements Consumer

Legal-Bay Pre Settlement Funding Company Reports Syracuse Diocese to Pay $100 Million Settlement to Victims of Childhood Sexual Abuse

Legal-Bay, the Pre-Settlement Funding Company, reports that the Roman Catholic Diocese of Syracuse, New York has just announced a $100 million settlement for sexual abuse plaintiffs. With approximately 400 claimants, settlements average out to $250,000 per case, but some plaintiffs will receive more or less than that amount based on the severity of the abuse incurred. The settlement is part of the diocese's bankruptcy arrangement, a situation they were forced into when faced with the overwhelming number of victims who've come forward with claims of childhood sexual abuse inflicted by clergy members and/or church employees. The case filings really piled up once the state of New York extended their statute of limitations, allowing victims to pursue lawsuits long after the abuse had taken place. If you are a plaintiff involved in an active clergy sexual abuse lawsuit and need an immediate cash advance lawsuit loan against an impending settlement, please visit Legal-Bay HERE or call toll-free at 877.571.0405. Chris Janish, CEO of Legal-Bay, says, "This latest Syracuse settlement shows that victims of childhood abuse can expect to receive justice even if the diocese declares bankruptcy. As six of New York's eight dioceses have already filed chapter 11—and all are facing similar lawsuits—we expect to see many other cases settling in comparable fashion nationwide."
Commercial Regulatory Issues

Supreme Court Judgement Unlikely to Stem Long-Term Appetite for Funding

In a briefing from Clifford Chance analyzing the nature and long-term effects of the Supreme Court’s decision, Claire Freeman and her co-authors examine the background to the case, breakdown the details of the judgement and offer their perspective on the implications for litigation funding.  This analysis suggests that the judgement struck “a powerful blow against the regime for opt-out antitrust collective actions”, which will undoubtedly affect some of the highest profile claims with the largest value of damages being sought for breaches of competition law. The authors note that even those class actions where collective proceedings orders (CPOs) have already been granted are not immune to these effects, with any funding agreements needing to be revisited and likely revised before the claims can move forward. Secondly, the analysis highlights that we may potentially see claimants move away from the Competition Appeal Tribunal (CAT) and instead “seek to expand the scope of representative actions in the English Courts.” However, they highlight the broader concern that the decision will “slow the pace of group litigation more generally whilst funders and claimants alike take stock”, especially when the Supreme Court judgement is taken in combination “with the uncertainty surrounding representative actions in the English Courts (after cases such as Lloyd v Google).” In contrast, the Clifford Chance team suggest that although there will clearly be a significant impact in the short-term, they argue that the fallout from the judgement “is unlikely to stem that appetite in the long-term.” The authors point out that funders will have to adapt to stay compliant with the new requirements, and this will require the use of differing solutions on a case-by-case basis. However, they stress that this will not solely be the concern of one party, as both “funders and claimants alike will need to give careful consideration as to the appropriate arrangements for both current and future claims.”
Announcements Consumer

Legal-Bay Pre-Settlement Funding to Add Mesothelioma Cases for Funding Along with Talc After Large $18MM Verdict

Legal-Bay, The Pre Settlement Funding Company, announced today that they are now adding mesothelioma victims to their list of Johnson & Johnson talc plaintiffs. The pharmaceutical company just lost their most recent court case, resulting in a landmark $18 million verdict. Both J&J and plaintiffs/lawyers await the next steps in what has been a painfully slow process. Plaintiffs allege that J&J talc-based baby powder is directly responsible for causing serious medical issues ranging from skin melanoma to ovarian cancer, and point out that the company has long been aware of the health risks associated with their product. Several studies dating back to the 1970s concluded that talc particles increase a person's chances of developing cancer, and evidence suggests that J&J has been intentionally concealing the results for decades.  Johnson & Johnson Baby Powder Talc cases are on track to rank among the largest mass tort settlements in U.S. history, predicted to cost J&J over $10 billion to resolve the 100,000+ claims. With the newly added mesothelioma verdict, the pressure is on. J&J has attempted to settle the cases via bankruptcy filing and a $9 billion payout. However, plaintiffs say that not only is the offered amount insultingly inadequate when one considers the large number of claimants in these lawsuits, but may be an improper use of the bankruptcy code as well, and are asking the U.S. Justice Department to investigate. If you require an immediate cash advance from your anticipated Johnson & Johnson talc baby powder lawsuit settlement, please visit the company's website HERE or call 877.571.0405  Chris Janish, CEO of Legal-Bay, said, "The time has come to move this litigation forward once and for all. Too many victims are not able to have their day in court due to the severity of their injuries; some have even died before seeing justice prevail. While J&J has offered to settle the cases, the amount seems to be a fraction of what juries are awarding in both talc and mesothelioma verdicts of late." Legal-Bay's sources close to the litigation believe that the parties will try to reach a global agreement by year's end, however, payments could be delayed for another two years due to the sheer number of claims to process. Legal-Bay is one of the few legal funding companies who are providing some financial relief to victims and their families with risk-free, non-recourse cash advance settlement loans.