Trending Now

All Articles

3449 Articles
Commercial People Moves

Stephanie Southwick Joins Law Finance Group as Senior Investment Counselor

Law Finance Group (LFG) has announced that Stephanie Southwick has joined the San Francisco-based funder in the role of Senior Investment Counselor. Southwick joins LFG, having spent four years at Omni Bridgeway as an investment manager and legal counsel, alongside a position at the Santa Clara University School of Law as an Adjunct Professor of Law. Southwick brings an additional 15 years’ experience in the legal sector, including a decade as the managing partner of Greenfield Southwick LLP. Kevin McCaffrey, president and CEO of LFG, described Southwick as “a key addition for LFG” and highlighting her “stellar reputation among leading law firms as both a litigation finance professional and litigator.” McCaffrey emphasised the experience and expertise that Southwick brings to the LFG team, saying that the appointment “signals our continued commitment to growing our portfolio of early stage case investments and law firm portfolios.” Southwick expressed her excitement to join LFG, stating that she was looking forward to working with the LFG team to “provide funding opportunities spanning the life cycle of a case from the early days of litigation through final resolution.” Commenting on why she chose LFG, Southwick explained that “LFG’s ability to offer personalized service while having ready capital on the balance sheet is exactly what plaintiffs and their law firms need.”
Commercial

SpectraLegal Facing Compulsory Strike-Off

As we approach the final months of 2023, a year that was perhaps expected to be one of unparalleled growth for the litigation funding industry, we are seeing signs that the increase in market competition is putting several funders in precarious positions. This challenging environment has been emphasised by new reporting which suggests that another UK funder is set to close up shop before the year is done. Investigative reporting by The Law Society Gazette reveals that UK litigation funder SpectraLegal appears to have ceased operations, and is in the process of shutting its doors for good. The Gazette’s deputy news editor, John Hyde, discovered that the funder’s Companies House’ page now includes a ‘notice for compulsory strike-off’. A compulsory strike-off is usually issued where a company has failed to meet its legal requirements to continue operating or has ceased trading. The notice published on September 26th reads as follows: “The Registrar of Companies gives notice that, unless cause is shown to the contrary, the Company will be struck off the register and dissolved not less than 2 months from the date shown above. Upon the Company’s dissolution, all property and rights vested in, or held in trust for, the Company are deemed to be bona vacantia, and will belong to the Crown.” The Gazette’s article goes on to explain that SpectraLegal has not been operating for many months, having ceased all lending operations, and laid off its employees. The London-based funder was founded back in 2014 and according to the still active company website, focused on three primary service areas: specialised funding schemes, equity release, and disbursement funding.  SpectraLegal does not appear to have made any public statements regarding its apparent winding down of operations, with the company’s LinkedIn page having remained inactive for the past nine months.
Commercial Deals

How Funders Assess Prospective Cases

As many leaders in the litigation finance space have noted in interviews and at industry conferences, one of the most important ways to increase market growth is by providing education to potential clients about how third-party funding operates. A core aspect of this education strategy is ensuring that those considering the use of outside funding understand what information funders are looking for when assessing a case. A new post from Harbour Litigation Funding seeks to provide a simplified and straightforward guide for potential customers, offering four key factors that funders will focus on when analysing the merits of a funding opportunity. Firstly, the article points out that whilst the merits of a case are very important, funders will not pursue those cases where there is not a clear path to recoverability for any potential award or damages. Included within this first assessment area are issues such as the defendant’s financial capability to pay an award, the jurisdiction-specific conditions for any potential enforcement, and the expected duration of any recovery process. Alongside the issue of recoverability, the realistic value of any potential claim is equally key, with funders being naturally hesitant about overly inflated claim values given the extended duration of cases and rising legal costs. As a result, funders are looking to understand how these values have been calculated before seeing whether a case might meet their requirements. As a follow-on from this factor, funders are equally concerned with making sure that a realistic budget has been worked out. As Harbour emphasises, a smaller budget is not necessarily more attractive than a larger proposed budget, especially if the latter has accurately accounted for the various ways in which costs can inflate over time. Finally, even where all these conditions are met, funders will still want to scrutinise and establish whether there is genuine merit to the legal argument being pursued. As part of this assessment, funders are keen to understand the risks associated with the claim and the ways in which those risks can be managed.
Announcements Commercial

LCM Announces Share Buyback Programme

Litigation Capital Management Limited (AIM:LIT), an alternative asset manager specialising in dispute financing solutions internationally, today announces that it intends to commence a share buyback programme in respect of its ordinary shares up to a maximum consideration of A$10.0 million from the date of this announcement (the "Share Buyback Programme"). The purpose of the Share Buyback Programme is to reduce the share capital of the Company in order to return value to shareholders. The Share Buyback Programme was first announced in the full year audited results for the year ended 30 June 2023 released on 19 September 2023. LCM has entered into an irrevocable non-discretionary instruction with Canaccord Genuity Limited ("Canaccord") in relation to the purchase by Canaccord, acting as principal during the period commencing on 5th October 2023 and ending upon the publication of the full year audited results of the Company for the year ended 30th June 2024, of Ordinary Shares for an aggregate consideration (excluding expenses) of no greater than A$10.0 million and the simultaneous on-sale of such Ordinary Shares by Canaccord to LCM, where they will be held in treasury. Canaccord will make its trading decisions concerning the timing of the purchases of Ordinary Shares independently of, and uninfluenced by, the Company. The Share Buyback Programme will be conducted within certain pre-set parameters, and in accordance with Chapter 12 of the UK Listing Rules and the provisions of the Market Abuse Regulation 596/2014/EU as amended by the Market Abuse (Amendment) (EU Exit) Regulations 2019 ("UK MAR") and the Commission Delegated Regulation 2016/1052/EU as amended by Technical Standards (Market Abuse Regulation) (EU Exit) Instrument 2019 which both form part of the law of the United Kingdom by virtue of the European Union (Withdrawal) Act 2018. Notwithstanding the average daily volume restrictions set out in Article 3(3) (b) of the Commission Delegated Regulation (EU) 2016/1052, the Company may make purchases in excess of these volume restrictions, subject to prevailing market conditions and liquidity.
Commercial Special Features

Member Spotlight: Joshua Masia

Co-founder & Chief Executive Officer at DealBridge.ai. Prior to founding DealBridge.ai, he led various data, technology, and product initiatives at some of the largest financial institutions and a category-defining FinTech: JPMorgan Chase, BlackRock, and iCapital. He has spent the past 15 years devising technical & business solutions across manufacturing, life sciences, and financial services. He holds a BS in Electrical Engineering from the Pennsylvania State University.

Company Name & Description: DealBridge.ai is the first Deal Relationship Management (DRM) platform, revolutionizing the way private market deals are handled. Harnessing the power of Generative AI and other advanced algorithms, DealBridge.ai automates the complexities and non-linearity of deal-making. The platform streamlines origination, due diligence, and distribution of private assets, eliminating traditional, labor-intensive processes. DealBridge.ai empowers sellers and buyers of alternative products to connect effortlessly at the deal level, enhancing the overall human experience and allowing users to focus on building and nurturing valuable relationships. With automation at its core, DealBridge.ai maximizes revenue potential and elevates deal-making capabilities in private markets.

Company Website: https://dealbridge.ai

Year Founded: 2021

Headquarters: New York

Area of Focus: Building solutions for the litigation finance community. He aims to solve core issues that have plagued the space for years, facilitating more efficient and effective deal management for all stakeholders.

Member Quote: "Litigation funding democratizes the legal system, leveling the playing field for those seeking justice. Generative AI and DRM technology are pivotal in expanding and driving greater adoption in the litigation finance market. They enable us to revolutionize how legal deals are managed, making the process more accessible and efficient for all parties involved."

Commercial Special Features

Highlights from the 6th Annual LF Dealmakers Conference

From September 26th-28th, LF Dealmakers hosted its sixth annual event in New York City. The three-day conference kicked off with a workshop on navigating the Mass Torts landscape, and an opening reception at the James Hotel. Days two and three featured panel discussions and networking opportunities between key stakeholders in the litigation finance space. Wendy Chou, founder of LF Dealmakers, was extremely pleased with the outcome of the event: "For six consecutive years, LF Dealmakers has sold out, a testament to the growing interest and importance of litigation finance in today's legal landscape. We are immensely proud to have created a platform where the best minds in the litigation finance and legal sectors can come together for powerful connections and productive discussions.” Day two began with a pair of panels on the overall state of the industry and an insider’s approach to getting the best deal. The latter included a panel of experts, including Fred Fabricant, Managing Partner of Fabricant LLP, Molly Pease, Managing Director of Curiam Capital, and Boris Ziser, Partner at Schulte Roth and Zabel. The discussion revolved around the following topics:
  • Getting up to speed on funding & insurance products
  • How to fast track diligence and deal with exclusivity
  • Negotiating key terms and spotting red flags
  • Benchmarking numbers & making the waterfall work for you
One interesting point arose on the issue of judgement preservation in the IP space, where Fred Fabricant explained that he hasn’t seen a lot of insurance products in the pre-judgement section. “There are too many uncertainties, and it is very hard to assess the risk in this phase of the case.”  Fabricant is looking forward to insurance products in this phase. “In post-judgement, much easier for insurance to assess the risk, because you’ve eliminated lots of uncertainties.” Click here for the full recap of this panel discussion. The featured panel of Day 2 was titled: “The Great Debate: Trust and Transparency in Litigation Finance.” The panel consisted of Nathan Morris, SVP of Legal Reform Advocacy at the U.S. Chamber of Legal Reform, Charles Schmerler, Head of Litigation Finance at Pretium Partners, and Maya Steinitz, Professor of Law at Boston University. The panel was moderated by Michael Kelley, Partner at Parker Poe. This unique panel was structured as a pair of debates (back-to-back), followed by an open forum involving panelists and audience questions. On the topic of ‘what is a litigation funder?’ what perhaps seems like an obvious question sparked a passionate back-and-forth between moderator Michael Kelley and Charles Schmerler over whether entities such as legal defense funds and the Chamber of Commerce should technically be classified as litigation funders. After all, the Chamber accepts donations and then uses its capital to file claims—so would donors to the Chamber be considered litigation funders? One interesting point came from Schmerler, who noted that causal litigation is different from commercial litigation—especially from a public policy perspective. So conflating them under the semantic of ‘litigation funding’ isn’t as useful, even if they can each be technically classified as litigation funding. Click here for a full recap of this panel discussion. Day three offered four panels and three roundtable discussions, followed by a closing reception. One panel focused on opportunities in Mass Torts and ABS, and consisted of Jacob Malherbe, CEO of X Social Media, Sara Papantonio, Partner at Levin Papantonio Rafferty, and Ryan Stephen, Managing Partner of Pine Valley Capital Partners. The panel was moderated by Steve Nober, CEO of Consumer Attorney Marketing Group (CAMG). The wide-ranging discussion covered the following topics:
  • Who’s doing what in mass torts? How about funding?
  • How funders are evaluating and working with firms
  • Examples of the ABS framework in action & challenges
  • Pre- and post-settlement funding and time to disbursement
One key point for funders to consider, is that as more funders enter the mass torts space, they need to be cognizant of ethical considerations around marketing, PR, claimant communications—all aspects of a case that are unique to class actions and mass torts. Congress is now taking a look at how law firms market to prospective claimants, and should any lawsuits arise, funders will no doubt be corralled into the mix. Given that, it is critical for funders to mitigate the inherent risks by asking more questions at the outset of case diligence: What kind of advertising is being used, where are the clients coming from, how do I know that the clients are real (ad tracking)?  Funders need to be proactive about managing risk, rather than getting caught on the wrong side of a PR headache. Click here for a full recap of this panel discussion. Additional panel discussions covered topics such as successful models of cost and risk sharing, managing IP risk, and a CIO roundtable featuring investors in the space. In addition to the knowledge-sharing, attendees were able to network with founders, CEOs, C-suite officers, thought leaders and other key stakeholders in the litigation finance space. All of which makes the LF Dealmakers event the ongoing success that it is. Founder Wendy Chou spoke to the core ethos of the event: "At Dealmakers, we believe that connections and conversations are the keys to progress. At this year’s LF Dealmakers Forum, we were honored to host a number of critical conversations, including a thought-provoking debate on trust and transparency. It was a historic moment as we welcomed a representative from the US Chamber of Commerce to our stage, marking their first-ever appearance at a litigation finance industry event. It speaks to our commitment to open dialogue and advancing important discussions within our community.”
Commercial Deals

The Common Ground Between Big Business, Insurance, and Litigation Funding

Among those critical of the litigation finance industry, large corporations and insurers are often cast as two of the chief opponents of third-party funding. However, as a recent article has pointed out, the opposition to litigation funding from these types of organisations is neither unanimous nor consistent in its criticisms. In an opinion piece for the New York Law Journal, G. Andrew Lundberg, managing director at Burford Capital, provides an alternative look at litigation funding’s detractors, questioning whether there is perhaps more common ground than is usually acknowledged. Lundberg first highlights that while entities such as the U.S. Chamber of Commerce and the Insurance Information Institute may vocally oppose third-party funding, the businesses they represent do not have such a one-sided relationship with funders. As Lundberg points out, large corporations are increasingly taking advantage of litigation funding to relieve financial and legal risk, allowing their legal departments to pursue meritorious legal actions without putting additional strain on departmental budgets. Similarly, while there are of course insurers who are concerned about the effects of outside funding on rising legal costs and the size of awards, there are plenty of insurers who are also benefiting from a booming market for litigation risk insurance. Focusing in on the insurers’ perspective, Lundberg uses both judgement preservation insurance (JPI) and after-the-event insurance, as two products that insurance companies offer that have a mutually beneficial relationship with the work of litigation funders. He also highlights that there is so much overlap between the two areas, that even Burford Capital has dedicated resources to its own in-house provider of ATE insurance: Burford Worldwide Insurance. Concluding his analysis, Lundberg argues that the intersection between big business, insurance, and legal finance, demonstrates that “the line between good capital and bad capital isn’t as clear and as fine” as critics would suggest.
Commercial Regulatory Issues

Funders File Petition in Louisiana Disciplinary Case for MM&A

Investments by litigation funders into claims not only represent their belief in the validity of the legal case, but also their belief in the lawyers who will be representing the claimants. When those law firms are revealed to have acted improperly or misused that capital, funders can find themselves having to fight to recoup their investment, as is the case in an ongoing disciplinary matter in Louisiana. An article in the Insurance Journal provides insight into a petition lodged in the Western District of Louisiana by two funders, the Equal Access Justice Fund and EAJF ESQ Fund, over US District Judge James D. Cain’s sanctioning of law firm McClenny Moseley & Associates (MM&A). In August, the judge had ruled that MM&A was not entitled to any legal fees from clients involved in over 200 hurricane-damage claims related to Hurricanes Laura, Delta, and Ida. The funders argued in their petition that they have been prevented from recouping their investments in MM&A, which amount to around $30 million. Judge Cain had sanctioned the law firm after hearings revealed that MM&A had improperly filed claims, by falsely stating they were representing property owners, as well as duplicating pre-existing claims and making false statements to insurers. Judge Cain’s order, barring MM&A from collecting on fees and expenses for the claims, was preceded by a $2 million fine from the Louisiana Department of Insurance, as well as the state’s Bar’s Office of Disciplinary Counsel suspending the law license of R. William Huye III, manager of MMA’s New Orleans office. In their petition to Judge Cain, the funders’ attorneys argued that “neither the lenders nor any other party received notice or an opportunity to be heard regarding the law firm’s interest in case proceeds before the court adjudicated that issue.” They stated that the judge should have consulted the lenders who had a financial interest in these claims and therefore filed the petition “to voice their concerns and defend their interests before this court and/or before a reviewing court.”
Commercial

Dispelling Myths About Litigation Funding

As the litigation finance industry continues to mature and we see more widespread adoption across a range of jurisdictions, common misconceptions about third-party funding are still present. Although funders can eloquently dispel these myths themselves, it is equally useful when these misguided assumptions are questioned by law firms who can offer their own perspective on the benefits of litigation funding. In an insights piece from Weightmans, Damien Carter and Jessica Kraja provide some illumination on four of the most common myths surrounding litigation funding, analysing how these concerns are often based on faulty premises. Firstly, Carter and Kraja tackle the idea that “litigation funding is only useful if you can’t afford to fund litigation”, pointing out that it is equally useful for litigants who are keen to offset risk and preserve their own capital rather than devoting it to a lawsuit. As a further example of this, they highlight that third-party funding can be useful for companies who wish to pursue more than one claim, but are limited by legal budget constraints. Secondly, the lawyers dispel the notion that “claimants lack control in their own litigation when using litigation funding”, stating that control over the litigation process will remain, as usual, with the claimant and their legal counsel. Whilst funders will be kept informed of developments during the case, funders are rarely involved in decision-making outside of situations that are specified in funding agreements. Addressing the claim that “litigation funding fails to cover all costs and disbursements involved in litigation”, Carter and Kraja emphasise that all funding arrangements can be tailored to meet the client’s individual needs. Outside of direct funding, clients are still able to work with their lawyers to utilise additional services such as litigation risk insurance. Finally, the article addresses the misconception that “litigation funding is only available for commercial litigation cases”, as the authors explain that funders engage with a wide variety of disputes. They note that funders will primarily assess cases based on several factors, including the merits of the claim and the ability of the defendant to pay any damages, rather than being solely limited to purely commercial litigation matters.