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  • An LFJ Conversation with Brenna Legaard, Partner, Invenio LLP
Commercial Regulatory Issues

An Argument for Reforming the Principle of Non-Recoverability

August 24, 2022

An Argument for Reforming the Principle of Non-Recoverability

While the availability of, and access to, litigation funding has been a boon for those seeking access to justice, some industry insiders argue that reforms have not gone far enough, and that more change is needed. One area of interest is recoverability for plaintiff costs, where currently claimants still stand to lose financially in order to cover the costs of the very funding that has allowed them to access justice. Writing for The Law Society Gazette, managing director of LionFish, Tets Ishikawa, argues that where defendants have been proven to have harmed plaintiffs, it is right and just that they recoup the costs for an action caused by the defendant’s wrongdoing. He argues this is doubly true in cases where the defendant prolongs proceedings through inaction or failure to properly handle proceedings, thereby causing claimant’s costs to rise; as is true in the case of Cabo Concepts Ltd v MGA Entertainment. Ishikawa also acknowledges that reform should not mean recoverability would be available in all commercial litigation matters, but that it should still be at the liberty of the court to make such determinations on a case-by-case basis. He points out that the basis behind non-recoverability is now outdated, and fundamentally misaligned with the principles of widening the avenues to legal redress that litigation funding is supposed to provide.

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Commercial

Litigation Capital Management Secures Short Covenant Waiver Extension to 13 November

Litigation Capital Management has obtained a further extension of the covenant waiver on its senior debt facility, buying the funder two additional weeks as it works to complete a longer-term amendment to the facility.

As reported in a regulatory announcement released on 2 November 2026, the waiver agreed with lender Northleaf Capital Partners (Canada) Ltd had been due to expire on 31 October 2026 and has now been extended to 13 November 2026. The company said the short duration reflects the fact that the conditions precedent to the longer-term facility amendment announced on 30 September 2026 are close to being satisfied. The interest rate on the facility remains 2.00% per annum above the standard rate, and no additional waiver fee is payable.

The extension is the latest in a sequence of short waivers running back to December 2025, during which the facility limit was increased from US$75m to US$100m. LCM's strategic review, announced in September 2025, concluded without a transaction, and the company is now in orderly run-off.

For the financial year ended June 2026, LCM reported a loss after tax of A$165.7m and net liabilities of A$53.6m. In October the company disclosed an unsuccessful judgment in an Australian insolvency claim and received a termination notice alleging breach of a funding agreement in a Competition Appeal Tribunal collective action, which LCM disputes. Shares closed at 0.499p on 2 November.

Commercial

Deceased Class Representative’s Estate Ordered to Pay £7.7m in Costs

The estate of a deceased class representative has been ordered to pay £7.7m in costs after the collective proceedings he brought against a group of UK rail operators collapsed, in a ruling that underscores the adverse costs exposure attaching to opt-out claims in the Competition Appeal Tribunal.

As reported by The Law Society Gazette, the case concerned David Courtney Boyle, who in 2021 brought a claim valued at roughly £400m against Govia Thameslink Railway and other defendants over allegedly inflated fares on London to Brighton routes. Mr Boyle died of Parkinson's disease in June 2025. With no replacement class representative coming forward, the Tribunal revoked the collective proceedings order and the claim was decertified. The Tribunal's Order of the Chair on costs is dated 26 October 2026, and a further costs hearing has been listed for 24 November 2026.

The outcome is the second costs ruling of its kind against a UK class representative in recent months. In May 2026, Walter Merricks CBE was ordered to pay £70,000 in interim costs — against a defence application for £223,000 — after withdrawing from proceedings for want of after-the-event insurance.

For funders, the decision reinforces the centrality of adverse costs cover in the economics of UK collective actions. Where a class representative dies or withdraws and no successor steps in, the claim does not simply lapse: the defendants' costs crystallise, and the question of who ultimately bears them turns on the funding and insurance arrangements put in place at the outset.

Commercial

An LFJ Conversation with Brenna Legaard, Partner, Invenio LLP

Below is our LFJ Conversation with Brenna Legaard, Partner at Invenio LLP.

Brenna Legaard is an accomplished first chair trial attorney, patent attorney, and intellectual property strategist with more than 20 years of experience advising technology companies on the protection, commercialization, and enforcement of their innovations. Her practice spans high-stakes litigation, strategic IP portfolio development, licensing, and deal support. Brenna has represented Fortune 500 companies and cutting-edge startups alike, guiding clients through patent portfolio development, enforcement campaigns, trademark enforcement, and sophisticated cross-border matters. She is deeply engaged in the evolving landscape of litigation finance, leveraging this important tool to fulfill the promise of the patent system for inventors.

To set the stage, tell us about Invenio and your move there from K&L Gates. Invenio is built around legal underwriting, IP monetization and specialty finance rather than a traditional full-service practice. What did you see in the market that made that the right platform for IP enforcement work in 2026?

After many years in Big Law, I was drawn to how entrepreneurial and nimble Invenio is. The legal market, and what clients need from it, is changing fast. I wanted to be somewhere built to respond to that change in ways that are both innovative and disciplined.

Litigation finance was a big part of the draw, too. I spent 25 years helping companies get patents, build portfolios and protect their IP. When litigation finance arrived, it was a remarkable tool. In the right circumstances, it lets a patent owner actually use that IP without cost standing in the way. Invenio's focus on that space gave me the chance to bring the two halves of my career together. It also lets me do more plaintiff-side work than I'd been able to before.

IP underwriting is where a great deal of capital is won or lost. Walk us through what rigorous underwriting of a patent matter actually looks like in practice. What separates a genuinely fundable case from one that merely looks good on paper, and where does diligence most often fall short?

Every patent case comes down to three questions. Are the patents infringed? Are they valid? And are the damages large enough to justify the investment? Those questions are usually treated as separate workstreams, but they're deeply intertwined. When you interpret the claims for infringement, you're committing to a particular claim scope, and you have to live with that same scope on validity and damages. So the real question is whether the claim scope you need for infringement is also valid, and valuable enough to support robust damages. The most common failure I see in underwriting is answering those questions in silos instead of as one interdependent analysis.

The second place diligence falls short is in understanding the real technical value of the invention. Too often, people treat sales figures as a proxy instead of asking whether the industry truly needs the innovation.

Finally, I have strong views on how AI should, and shouldn't, be used in IP underwriting, which I've written about here.

Patent investments are multi-year commitments, but the policy environment around them moves faster than that. USPTO leadership, PTAB practice and discretionary denial standards can all shift with a change in administration. How should funders future-proof IP investments against that volatility, and what does a durable enforcement strategy look like when the rules may change mid-case?

I don't believe your direction should change with the administration. What changes is whether the policy landscape gives you headwinds or tailwinds, but if your direction is sound, you keep heading there either way.

The North Star in patent litigation is claims that are valid and technologically important. That's what preserves a case's value in a hostile environment, and it's what maximizes that value in a friendly one. Right now, the policy climate may let some people get away with looser underwriting. If policy swings back to where it was a few years ago, they won't. The right answer is the right answer, whichever way the wind is blowing.

Large firms that historically defended patent cases are moving onto the plaintiff side, often with contingency or hybrid arrangements. What is driving that shift, and how should funders think about managing those relationships on economics, control, conflicts and case selection compared with working with established plaintiff-side boutiques?

Money, of course. As funding becomes more common and more accepted, and as firms worry less about optics and more about profits per partner, they'll follow the opportunity. But Big Law isn't built to take on risk. Large firms have trouble assessing risk, trouble getting comfortable with it, and trouble doing what needs to be done when it shows up in ways they didn't expect. And their financial model assumes they get paid regardless, which creates friction. Contingency plaintiff firms, by contrast, are built for this work and know how to adapt when the unexpected happens.

My biggest caution to funders is that you can't treat these two kinds of firms the same way. What works with a contingency boutique won't work with a Big Law firm. Those firms are not only risk-averse but systemically risk-intolerant, and their compensation systems aren't designed to reward taking on risk.

To that end, here's my best guidance for funders to navigate the space successfully.

Underwrite the firm, not just the case. Understand how partner compensation treats contingency work, who inside the firm has to sign off, and what happens to the team members' numbers if the case runs long.

Structure the economics around that reality. A hybrid arrangement with a meaningful but survivable fee reduction often keeps a large firm more committed than a pure contingency that its compensation committee will start second-guessing two years in.

Agree on the hard things up front. Settle budgets, staffing and a framework for settlement decisions at the outset, within the ethical limits on funder control. And look for plaintiff experience in the team, as there are big strategic differences between defense and plaintiffs.

Press hard on conflicts, including business conflicts that won't show up in a conflicts check. A firm with a deep defense-side book may face pressure from an important client to step away — pressure that can show up when unexpected risk does.

Be disciplined on case selection. Don't let a firm's appetite for headline-size matters set the agenda.

Looking 18 to 24 months out, you work at the intersection of IP, litigation funding and insurance. Where do you expect capital to find the best risk-adjusted returns in IP, what role will insurance play in de-risking those positions, and where should sophisticated funders be positioning now?

With Big Law moving into the space, there's inflation in what counts as a "good case." A lot of attention goes to the mega-deals, meaning litigations with more than $100 million in damages at stake. But verdicts at that scale often don't survive appeal, if they're reached at all. There's a lot of risk at that size, and funders would be well served by finding ways into cases that don't need as much capital. Learning to make good money at a smaller, more reliable scale matters for the health of the whole industry.

As for insurance: candidly, I don't think any funder should take on a large contingency case without insuring it. Insurance addresses many of the problems created by the way our industry takes on risk, especially when Big Law is involved. It tends to push investments toward aggregated structures. Particularly with Big Law, though, insurance may be what makes those deals viable and sustainable. There isn't always room for it in a smaller deal. But for the big cases and the Big Law work, both firms and funders need to look to insurance to manage the risks built into our business model.