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Announcements Commercial Legal Innovation

KWS Litigation Shapes The Future with Low-Risk Investments and Substantial Returns

KWS Litigation, a pioneering, British litigation funding investment company, is revolutionising the legal and investment landscape by offering a unique opportunity where justice aligns with intelligent portfolio diversification. Creating a realm where justice and investments intertwine, KWS Litigation champions the cause of consumers who have fallen victim to mis-sold loan agreements and business energy claims through deceptive and fraudulent sales practices. Their disruptive approach, rooted in fundamental legal principles upheld by the High Court, introduces innovative solutions that break new ground. Inviting individual investors to finance legal cases in exchange for a share of the proceeds and substantial pro-rata returns, investor capital with KWS Litigation is not only low-risk but also shielded by an FCA-regulated broker insurance bond. This opportunity isn't just smart; it generates a positive social impact, shaping a future where justice prevails and investments flourish. Following a recent landmark judicial review, KWS Law Limited transformed into a Special Purpose Vehicle (SPV) to facilitate the High Court verdict for mis-sold consumers. Out of this restructuring, KWS Litigation emerged as a trading style of KWS Law—an Alternative Business Structure, providing more choices, innovation and transparency. Regulated by the Solicitors Regulation Authority (SRA: 830165), KWS Litigation operates as an agile and client-centric law firm with a laser focus on identifying legitimate litigation claims. Headed by Neil Berkeley, his team of seasoned legal professionals ensures success in various fields of litigation while prioritising investor risk management. “Our commitment is unwavering—to bridge the gap between individuals and powerful entities, championing a legal system where justice is accessible to all.” — Neil Davis-Berkeley, Managing Director at KWS Law KWS Litigation's mission is to equalise the legal landscape by offering financial support and legal expertise to claimants. By rectifying the imbalance between individuals and large corporations in the courtroom, they empower individual investors to achieve outstanding returns, disrupting the dominance of major funders supporting large enterprises. In the UK consumer litigation investment market, characterised by dynamic growth and evolving regulations, KWS Litigation strategically positions itself as a formidable player. Their specialised expertise, robust track record and meticulous approach make them well-suited to attract a diverse array of litigation funders and professional investors. Furthermore, KWS Litigation recently announced a new equity partnership with a leading claims management firm. Facilitating case acquisition, Addlington-West Group seamlessly pairs its clients—everyday people with meritorious cases—for KWS Litigation. The consumer litigation investment sector has experienced significant growth, driven by increased compensation pursuits. Moreover, research conducted by law firm Reynolds Porter Chamberlain LLP reveals the top 15 UK litigation funders reported record assets of £2.2 billion on their balance sheets in 2020/21, signifying an 11% increase from the preceding year. KWS Litigation specialises in distinct categories of consumer litigation cases, including financial services mis-selling. Their rigorous risk assessment and due diligence processes, compliant with litigation and consumer protection regulations, attract investors of all scales, including individual and institutional investors seeking low-risk alternatives with exceptional returns. The innovative investment model offered by KWS Litigation provides low-risk opportunities with no direct correlation to conventional financial markets. Rigorous selection processes, compliance with regulatory requirements and unique features such as FCA-regulated broker insurance bonds, set a precedent, ensuring a higher potential for returns compared to other asset classes.
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Case Developments Commercial

UK Government Announces Plans for Legislation to Overturn Convictions for Post Office Scandal Victims

The Post Office scandal has dominated the headlines in UK media over recent months, highlighting the vast scale of the injustice suffered by the sub-postmasters, and the role that third-party funding played in allowing these victims to seek justice. In another positive step for the victims, the government has now announced plans for a new law that would accelerate the process for overturning many of the sub-postmasters’ convictions. An article by BBC News covers the UK government’s announcement of new legislation that will overturn convictions for the sub-postmasters who were victims of the Horizon Post Office scandal. The new law intends to clear the convictions for the majority of the over 900 sub-postmasters who were wrongfully convicted for false accounting and theft, with the legislation expected to come into effect by the end of July. The legislation sets out specific criteria for the types of convictions that would be overturned, with the law covering those convictions made by the Post Office and Crown Prosecution Service (CPS) in England and Wales. However, those convictions from the Department for Work and Pensions (DWP) are not covered by the bill, nor are any convictions that resulted from cases in Scotland and Northern Ireland. The government stated its intention to work with local governments in those regions to ensure that their own plans for quashing convictions are “compatible with the UK compensation scheme.” As part of the announcement of the planned legislation, Post Office Minister Kevin Hollindrake stated that "the scale and circumstances of this prosecutorial misconduct demands an exceptional response.” Hollindrake acknowledged that whilst the new law may “exonerate a number of people who were, in fact, guilty of a crime”, the UK government considers this “a price worth paying in order to ensure that many innocent people are exonerated.”
Announcements Commercial People Moves

QANLEX hires lawyers Marina Gouveia and Alejandro Arias as Investment Managers

QANLEX, a litigation finance technology fund, founded in Argentina and currently operating in Europe and Latin America, recently incorporated two lawyers as Investment Managers to its international team, Marina Gouveia and Alejandro Arias. Marina Gouveia is a lawyer licensed in both Brazil and Portugal, graduated from Universidade Presbiteriana Mackenzie, with a Master's Degree in Mediation, Negotiation and Alternative Dispute Resolution from Universidad Carlos III de Madrid. She is a mediator for the Centro Brasileiro de Mediação e Arbitragem and the Centro de Arbitragem e Mediação. In addition, she has participated as a volunteer in numerous international arbitration, mediation, and negotiation competitions, acting regularly as a judge and arbitrator. Gouveia joins the office from Paris, France. Alejandro Arias has a law degree from Universidad Panamericana and a Master's degree in International and Comparative Dispute Resolution from Queen Mary University of London. Prior to joining QANLEX, he worked as an international lawyer at firms such as Dechert and Hogan Lovells. He joins the office from Mexico City. With these two additions in key continental law markets for the firm, such as Mexico and France, QANLEX seeks to strengthen its international presence and expand its operational capacity. In addition, Gouveia's experience and training in both Brazil and Portugal will support the development of these markets. Yago Zavalia Gahan, co-founder of the firm, highlights these signings as very significant for the firm: "The addition of these two legal professionals marks a significant milestone in our commitment to strengthen our international team. We are confident that they will help us successfully navigate legal challenges as we continue to grow and expand into new markets. Their passion for innovation and excellence aligns perfectly with our mission and values." Fernando Folgueiro, co-founder of QANLEX, emphasizes: "The arrival of Marina and Alejandro at QANLEX brings a fresh perspective that is vital to our strategy. Their commitment to our project reinforces our presence in two key countries such as Mexico and France, in addition to supporting the Portuguese-speaking market, taking into account Marina's experience in Brazil and Portugal". About QANLEX QANLEX is the first litigation finance technology fund operating in Europe and Latin America, created by an interdisciplinary team of lawyers and engineers with a holistic view of law, finance and technology. Its mission is to provide capital to pursue meritorious lawsuits with an exclusive focus on continental law countries.
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Commercial Legal Innovation

Using Data Analytics to Maximize Efficiency in Litigation Funding Proposals

As in-house counsel and corporate legal departments grow more comfortable with the prospect of utilizing third-party funding, litigation funders are keen to provide education about best practices for securing funding.  In a blog post from Omni Bridgeway, Matt Leland and Carrie B. Freed examine the use of in-house data analytics for companies who are looking to secure third-party funding for their litigation strategy. As the authors explain, for in-house counsel who are seeking litigation funding ‘it is imperative to assess the economics of a case with clear eyes’, and this can be best achieved ‘partnering with their business analytics colleagues.’  By collaborating with their data analytics team, Leland and Freed argued that corporate legal teams can create ‘several efficiencies when preparing the litigation funding proposal.’ The five efficiencies that can be achieved are as follows:
  • Pressure-test damages evidence
  • Avoid discovery emergencies
  • Familiarize personnel with the litigation
  • Foster collaboration with colleagues
  • Generate reliable budget forecasting
Leland and Freed highlight that as ‘businesses accumulate copious amounts of data’, they already have a wealth of information that can be used to produce accurate quantitative analyses of potential losses and also build predictive models for likely outcomes. Whilst this use of data analytics will not be able to provide foolproof assessments, ‘the company can better demonstrate to a litigation funder where the recovery risks lie and what resources might be necessary to strengthen the business’s litigation position.’
Commercial Legal Innovation

The Role of ATE Insurance in the Post Office Scandal

The Post Office scandal has brought the role of litigation funding in opening access to justice to the fore, with the media coverage generating fresh opportunities for funders to talk about their vital role in supporting victims of a miscarriage of justice. However, it is equally important to recognise the role that litigation insurance played in supporting the sub-postmasters legal campaign. In an article for Insurance Post, Alan Pratten, chair of M&A, litigation and tax insurance solutions at Gallagher, provides new insights into the use of after-the event (ATE) insurance in the postmasters litigation. Pratten goes into the nuances and challenges that were overcome as an insurance broker, working in tandem the postmasters legal team which was led by James Hartley, partner at Freeths. Pratten explains that the claimants’ legal teams had struggled to secure ATE initially, with one of the primary issues being that ‘many of the claimants, owing to the findings of the Horizon software, had criminal records, having been convicted of fraud, theft and false accounting.’ Insurers were therefore naturally averse to involving themselves with a case involving fraud, which was compounded by the fact that ‘the majority of existing ATE policies would have been nullified due to some claimants having previous convictions.’ Pratten goes on to detail how Gallagher worked with a panel of UK and US insurers to craft sufficient ATE insurance cover for the sub-postmasters, which involved ‘working with a panel of insurers and reinsurers and tailoring the policy wording in 85 different areas.’ He describes the case as setting ‘a new precedent for ATE in the industry’, and emphasised that the bespoke nature of this policy shows ‘that standardised policies are rarely the best fit and that clients need an insurance broker that understands, and can cater to, their unique circumstances.’
Announcements Commercial

Omni Bridgeway Releases Market Update

Omni Bridgeway Limited (Omni Bridgeway, OBL) (ASX:OBL) announces an update on income and income yet to be recognised (IYTBR) from matter completions as well as provisional impairments of certain investments. Positive developments[1]
  • Following the 31 December 2023 period end, approximately A$48.9 million investment income has been generated, with A$18.4 million provisionally attributable to OBL (excluding performance fees on these completions):
  • Completion of three investments generating approximately A$28.1 million of income recognised (MOIC of 2.02x; IRR of 125%).
  • In principle settlement of three investments resulting in approximately A$20.8 million IYTBR.
  • This is incremental to the 2Q24 Investment Portfolio Report disclosures of A$187 million investment income generated in 1H24 from A$147.9 million income recognised and A$39.1 million IYTBR, with A$32.0 million provisionally attributable to OBL (excluding performance fees on these completions).
  • The A$289.7 million cash and receivables balance at 31 December 2023 does not include any cash proceeds from the additional matters stated above.
Negative developments
  • Case developments during the financial year to date (FYTD24) in OBL’s investments in associates have resulted in a A$14.9 million reduction of the carrying value of the OBL residual share. This mainly relates to a positive judgment for a Fund 1 investment, but at a significantly lower than expected amount. The judgment is subject to various appeal proceedings.
  • Case developments during FYTD24 in litigation investments classified as intangible assets have resulted in a A$33.2 million (A$12.9 million attributable to OBL) reduction of the carrying value. This mainly relates to adverse milestones associated with a funded law firm portfolio for which returns are cross collateralised. While OBL’s investment in this portfolio has achieved a positive return on invested capital overall, the remaining carrying amount is considered impaired under OBL’s accounting policies. Appeals are being pursued and may result in a reversal of the full impairment due to the cross collateralisation.
  • Case developments during FYTD24 in litigation investments classified as purchased claims have resulted in a A$6.3million (A$1.1million attributable to OBL) reduction of the carrying value. This mainly relates to two litigation investments for which the anticipated income is lower than expected or the anticipated duration has extended.
  • The above reductions in the carrying value of the investments are non-cash items.
The amounts stated above are subject to completion of the audit process and will be confirmed in the 1H24 Group Consolidated Financial Statements which will be released on 29 February 2024.  
  1. Fund 5 is not consolidated within the Group Consolidated Financial Statements, but the aggregate income figures in this section include 100% of any Fund 5 income recognised/IYTBR.
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Consumer

Let’s Set The Record Straight: Consumer Legal Funding is Not Litigation Finance

The following piece was contributed by Eric Schuller, President of the Alliance for Responsible Consumer Legal Funding (ARC). Consumer Legal Funding, in its various forms, is pretty mundane. It covers living expenses, such as rent, food, clothes and keeping the lights on. It might even enable a family to provide Christmas or birthday gifts for their children. In every case, its sole purpose is to help individuals and families alleviate the cash-flow problems that arise in the wake of an accident or other tragic circumstances, while the individuals and families are seeking compensation for their situation. It has nothing to do with financing of the litigation. What is happing is that groups and individuals who are not taking the time and effort to know the differences between the two different products and are lumping them together. They are saying all transactions where a party to litigation receives any monetary resources from a non-party are considered Third Party-Litigation- Financing (TPLF). It paints a bleak picture of “foreign adversaries . . . undermining U.S. national economic and security interests through the infiltration of the American litigation system,” and it is the end of the free world as we know it. Consumer Legal Funding is nothing like that, it helps a consumer meet their financial obligations while their legal claim is making its way through the justice system. It does not pay for deposition cost. It does not pay for legal fees or expenses. Most of the time the funds go to help a consumer who has had a car accident bridge the financial gap, but there are other times where it goes to help a person who was wrongfully convicted and spent nearly two decades of their life in prison for a crime they did not commit. Consumer legal funding helped them get their life back in assisting with living expenses while they got the justice they so justly deserved. It helped a Police Officer pay to keep a roof over their family’s head while they had their day in court after being wrongfully discharged. Then the case of a single mother of three who was going back to college to make a better life for her children and had to move out of their home because of a toxic mold infestation. She used consumer legal funding to pay for a mobile home so she and her three children could live in a safe, toxic-free, environment while the situation was fixed. There is the case when a 16-year-old was made a quadriplegic due to medical negligence. The family had to modify their home to make accommodations to care for their loved one. Consumer legal funding was the only way they were able to take care of their teenager while the case made its way through the long legal system. Another was a woman was involved in a car accident and her teeth were shattered because of the accident. She used consumer legal funding to get a new set of teeth. She said, “it gave me my smile back”. Finally, there have been times where consumer legal funding was used to help pay for funeral expenses of a loved one that was tragically killed in an accident. Sadly, some families had no other means of taking their loved one to their final resting place if it had not been for consumer legal funding. But what is happening are those groups and individuals that do not take the time, or want to take the time, to learn what consumer legal funding really is. They hear terms like, “corrupting the legal system”, “leads to filing frivolous litigation” and the latest is “foreign governments are leading to international sabotage of our courts”. Then charge ahead saying “the sky is falling; the sky is falling”.
  • How does giving money to a single mother so she can have her children live in a toxic free environment lead to “international sabotage”?
  • How does allowing a person who spent nearly 2 decades of their life living in 48 square foot space corrupting the legal system?
  • How does allowing a person to get their smile back lead to frivolous litigation?
Litigation Financing is just that “financing of the litigation”. It is used to pay for lawyers. It is used to pay for depositions. It is used to pay for expert witnesses. It is used to pay court costs. None of which consumer legal funding does. In fact, in the legislation that we have promoted we specifically state the funds we provide to a consumer cannot be used for those purposes. Don’t be fooled by someone who is throwing out buzz words that make one think we are on the brink of judicial destruction by confusing Consumer Legal Funding with Litigation Financing. They both may be fruit. But one is an apple and one is an orange. Eric Schuller President Alliance for Responsible Consumer Legal Funding http://arclegalfunding.org/
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Announcements Commercial Deals

Westbrooke Associates Unveils a Highly Sought-After Investment With Capital Protection

Westbrooke Associates, the official agent for prominent and proven track record investments, is thrilled to announce its latest portfolio prospect. Providing a broad spectrum of options for those seeking attractive returns, Westbrooke Associates is inviting professional investors to invest in an opportunity that offers generous pro-rata returns with capital protection. Showcasing a groundbreaking investment realm in a venture that goes beyond the ordinary, Westbrooke Associates is working in conjunction with KWS Litigation (a trading style of KWS Law) presenting an extraordinary opportunity in British litigation funding. Litigation funding, also known as legal financing or third-party funding, allows investors to support legal cases without the financial burden for claimants. Enabling litigation to pave the way for justice, this opportunity opens up an intelligent avenue for diversifying investment portfolios, providing a powerful tool to level the playing field. Recent market research highlights how the global litigation funding investment market has demonstrated substantial growth potential, valuing the market at approximately $12.2 billion in 2021 and anticipating it to surge to an impressive $25.8 billion by 2030. Following a landmark judicial review, KWS Litigation offers access to both justice and financial growth by inviting individual investors to finance mis-selling loan agreement legal cases and business energy contracts. Meeting the demands of a disruptive and evolving industry, KWS Litigation--a trading style of KWS Law Limited, operates as an Alternative Business Structure, providing choice, innovation and transparency. Regulated by the Solicitors Regulation Authority (SRA: 830165), KWS Litigation is a client-centric law firm focused on identifying legitimate litigation claims. Their mission is to rectify courtroom disparities between individuals and large corporations. The stringent claimant selection process is also a testament to the firm's commitment to excellence. In a symbiotic relationship that benefits mutual clients, the Claims Management firm, Addlington-West Group, authorised and regulated by the Financial Conduct Authority (FRN:838665), collaborates with KWS Litigation as an Introducer of Clients. Leveraging this partnership, Addlington-West Group has access to a pool of legitimate and meritorious prospects actively seeking funding and assistance in pursuing claims of financial mis-selling. Coupled with legal opinions from independent barristers confirming the highest likelihood of a successful outcome, each investment benefits from legal expertise, case due diligence and streamlined process management. Holding the promise of significantly larger returns compared to traditional alternative asset classes and in stark contrast to the extended timelines associated with typical private equity deals, this opportunity presents a return in approximately 12 months. Moreover, this unique and potent avenue stands independently from conventional financial markets, market fluctuations and volatility. Safeguarding the investor journey at every turn, upon completion of each successful case, the investor receives the principal amount and exceptionally high pro-rata returns. Even in the unlikely event of an unsuccessful case, the principal amount is secured via an insurance bond, offering unparalleled protection. Additionally, investor flexibility means the option to reinvest at any stage, providing each investor with the autonomy to navigate their investment with confidence. Throughout the process, KWS Litigation meticulously adheres to litigation and consumer protection regulatory requirements, ensuring compliance and transparency at every step. Discussing the new opportunity, Company Director for Addlington-West Group Magaret Bladon says: “I envision a future marked by even greater success and positive transformations. Our commitment to excellence, coupled with our unwavering dedication to client satisfaction, positions us as industry pioneers. I predict a future where our innovative approaches and client-centric strategies will continue to redefine the landscape. Together, we are poised for a journey of unparalleled success, achieving new milestones and setting industry standards for years to come.” Neil Davis-Berkeley, Managing Director for KWS Law says: “We believe in providing individuals with a voice, especially those who have been marginalised or faced injustices. Litigation funding ensures everyone, regardless of financial means, has access to justice and aligns with our goals for fairness, transparency and the right to seek restitution. Our commitment is unwavering – to bridge the gap between individuals and powerful entities, championing a legal system where justice is accessible to all." Westbrooke Associates facilitates strategic sector engagement, allowing investors to align their interests with industries they are passionate about, from promoting sustainability and social impact to embracing technological innovations. As seasoned and strategic players, this opportunity boasts a robust track record, specialised expertise and a meticulous approach, positioning it as a formidable choice for qualifying investors. If you want to seize the opportunity to be part of a venture that not only stands at the forefront of legal innovation but also promises exceptional returns, contact Westbrooke Associates to request the Investor Memorandum. Alternatively, you can visit www.westbrookeassociates.com to learn more, email info@westbrookeassociates.com or telephone 0203 745 0294.
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Announcements Commercial Deals

New Research Shows Businesses Increasingly Open to Reframing Legal Department from Overhead to Capital Source

Burford Capital, the leading global finance and asset management firm focused on law, today releases new independent research demonstrating that an increasing number of businesses are recognizing litigation portfolios as value sources and are becoming more open to tools that help them reframe the legal department from overhead to capital source.

In the nearly 15 years since Burford’s inception and in the wake of the last great recession, how businesses view their litigation and arbitration portfolios has drastically changed. Pressures on cost management have been persistent through turbulent economic times, Covid, supply chain constraints, geopolitical tensions and slow economic growth in major economies. To better understand how in-house lawyers and finance professionals expect these dual issues of cost management and value generation to evolve in the years ahead, Burford commissioned independent research with 400 GCs, heads of litigation, senior in-house lawyers, CFOs and other leaders responsible for litigation decision-making in their companies.

Highlights from the research include:

  • Businesses' already significant investment in litigation is growing: 43% of GCs say litigation spend will grow at least 25% in the next five years.                 
  • GCs and CFOs are aligned in seeking innovation for the legal department: More than half of businesses (55%) either have an affirmative recovery program (18%) or intend to build one (37%)—making it all the more important that best practices are in place to manage costs and optimize outcomes.
  • GCs and CFOs agree that collaboration is needed but differ on its extent: 70% of GCs and CFOs say it is important that the legal department find new ways to recover value—signaling a shared desire to reframe the legal department as a capital source. However, three times as many in-house lawyers as finance professionals say the decision to pursue potential claims is generally left to legal with little input from finance.
  • Legal finance is a key tool and finance has an important role in leveraging it: Almost three quarters (73%) of all respondents say their organizations have used legal finance (39%) or would consider doing so (34%), and more than two thirds (67%) of finance professionals feel that legal can increase its value to the business by using tools like legal finance.

Christopher Bogart, Chief Executive Officer of Burford Capital said: “The trend of ‘corporate finance for law’ is growing, as confirmed by this research and our own business, given that more than 50% of our commitments are now with corporates. That’s due to the impact legal finance can have on reducing the impact of litigation on the P&L and business leaders’ desire to use their capital to maximize shareholder value, not pay lawyers. This marks our 15th year in business – and while the legal field is generally slow to change, this research reinforces that CFOs and GCs are thinking about their legal departments differently, and Burford is laser-focused on helping companies reframe the legal department more as capital source than overhead.”

The Litigation Economics: CFOs and GCs weigh in on best practices in optimizing legal department value survey can be downloaded on Burford’s website. The research was conducted by GLG from December 2023 – January 2024.

About Burford Capital

Burford Capital is the 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.

For more information, please visit www.burfordcapital.com.

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Commercial Regulatory Issues

An Overview of Litigation Funding in Switzerland

When the European litigation funding market is discussed, it is perhaps unsurprising that these conversations are largely focused on third-party funding opportunities within member states of the European Union. However, outside of the EU, there is potential for Switzerland to become one of the continent’s most interesting jurisdictions for the adoption of third-party funding services. A blog post from Swiss Legal Finance (SLF) provides an overview of third-party litigation funding in Switzerland, examining the potential for the local market to grow, and outlining the best use cases for litigation finance in the country. The article begins by noting that whilst litigation funding has existed in Switzerland for the last 20 years, we have not seen widespread adoption of third-party funding services with ‘only a handful of funders currently active’. However, SLF point out that this may be change in the near future, ‘in part because local asset managers are becoming increasingly interested in litigation funding as an investment vehicle.’ The current state of litigation finance in Switzerland is a market that is unregulated yet recognised by Swiss law, with the Federal Court going as far as stating that there is a ‘ethical obligation for lawyers to inform their clients of the existence of TPLF.’ The post also explains that the Swiss legal model avoids some concerns around third-party funding that arise in other jurisdictions, noting that a funder’s presence has ‘no impact on lawyer-client privilege.’ This is because the Swiss system allows for legal documents to be shared with third parties without any requirement to disclose those documents to the defendant. As for the types of Swiss proceedings that litigation funding could be best suited for, SLF suggest that beyond domestic litigation, ‘domestic and international arbitration proceedings are also an attraction, because they often offer a substantial potential payout and take less time than litigation proceedings.’ SLF acknowledge that as class actions do not currently have a strong foothold in the country, there is little room for funded opportunities in this area. However, they also suggest that there is still a wide array of potential use cases, including divorce and inheritance cases, or even defendant funding.
Commercial Regulatory Issues

Nadhim Zahawi Calls on Government to Protect Access to Litigation Funding

Whilst the Supreme Court’s PACCAR ruling has been viewed as a low point for the UK litigation finance industry, the subpostmasters scandal appears to have drawn public attention to the importance of third-party funding. In another example of a prominent public figure calling for action to reverse the effects of PACCAR, the UK’s former Chancellor has called for action to ‘ensure full access to litigation funding.’ In an op-ed published by City A.M., Nadim Zahawi, MP for Stratford-on-Avon and former Chancellor of the Exchequer, argues that the Post Office scandal has demonstrated the crucial role that litigation funding plays in supporting ‘unfairly maligned groups’ like the subpostmasters. As many industry commentators have previously noted, Zahawi suggests that the elevation of this scandal into the public spotlight ‘has given the government the vital push it needed to speed up the process to ensure they receive justice.’ Describing the Supreme Court’s PACCAR ruling in damning terms, Zahawi says that without corrective government action, the decision ‘could have catastrophic and far-reaching consequences for access to litigation funding.’ Whilst he praises the government’s efforts to speed up the provision of compensation to the Post Office victims, Zahawi emphasises that this corrective action ‘must include ensuring that the next Mr Bates can obtain justice before parliamentary time runs out.’
Commercial Regulatory Issues

Irish High Court Ruling Rejects Allegations of Third-Party Funding in Tax Claim

As the third-party funding of litigation is still prohibited in Ireland, there are few opportunities to examine issues around funding arrangements in this jurisdiction. However, a new piece of analysis looks at a court decision which ruled on allegations that a claimant’s engagement with its lawyers amounted to a third-party funding agreement. A blog post by Lisa Carty and Sarah Twohig from Pinsent Masons examines a judgement handed down by Mr. Justice Michael Quinn in the High Court of Ireland, which dealt with allegations that fee arrangements between a plaintiff and their lawyer ‘amounted to a champertous contingency fee agreement.’ These allegations arose in a dispute between the Collector General of the Revenue Commissioners (Revenue) and two landlords, over unpaid taxes on rental income.  The defendants, Paul Howard and Una McClean, argued that Revenue’s agreement with its lawyers should be classified as a third-party funding agreement due to a clause that stipulated ‘the lawyers would only be paid if legal costs due to Revenue were recovered from a relevant taxpayer.’ Howard and McClean argued that if a costs order were made in the case, then the lawyers would be effectively paid a share of both the tax debt and the legal costs. However, Mr. Justice Quinn ruled that ‘the proceeds of the litigation process were the unpaid taxes, surcharges, and interest, not the costs.’ Therefore, the agreement did not violate Ireland’s prohibitions on champerty, as the clause at issue ‘did not allow a bonus or improper profit, because the lawyers had a right to their costs.’ Carty, a partner at Pinsent Masons, emphasised that the High Court’s decision “should act as a reminder to firms that any innovative funding arrangements may ultimately be scrutinised by a court to determine whether they constitute illegal third-party litigation funding.”  Twohig, a senior associate at the firm, added that until there is any reform of Ireland’s existing limitations on third-party litigation funding, “it is important that firms are mindful that their engagement terms cannot be interpreted as allowing profit from the proceeds of any litigation, other than the costs fairly due.”
Announcements Case Developments Commercial

Rest Super Members Prepare for Class Action Over Alleged Breach of Trustee Duties

Shine Lawyers has filed a class action on behalf of members of the Rest Superannuation fund who may have had income protection insurance premiums wrongfully deducted from their superannuation accounts.    “This class action alleges that between December 2008 and June 2019, Rest Superannuation (Rest) signed up new members to income protection insurance by default, without the member actively choosing to sign up to the policy,” said Shine Lawyers’ Practice Leader, Hadi Boustani.    “We also claim that when members did not make any contribution to their Rest account for 13 continuous months or more, the default income protection insurance policy did not provide the member with any coverage and when members held multiple income protection insurance policies at the same time, the Rest income protection policy provided little to no coverage.”    “This was money down the drain for fund members who paid a premium for no benefit. As a result, we’re seeking compensation for insurance premiums which we allege were unfairly deducted, as well as investment returns and administration costs,”    “Up to 500,000 Rest members may be affected,” said Boustani.   Shine Lawyers client, Jarrod Lane, has registered for the class action to demand accountability from his super fund.   He was not earning an income for over 3 years between 2018-2021 and believes he was charged for income protection insurance that he could never claim on.    “I felt it was important to join this class action because what Rest has done is wrong and they should compensate those who were affected.”  The action is being funded by Woodsford, a leading global ESG, access to justice and litigation finance business.   Clare Owen, Director and Head of Origination, Woodsford Australia, commented: “Everyday Australians trust their superannuation funds to look after their hard-earned dollars which they have invested for their retirement. Having sufficient superannuation to fund retirement is so important. Woodsford is pleased to be supporting this action to assist those everyday Australians in recouping losses to their superannuation which has been unfairly eroded.”    To be a part of this class action, you must have:   
  • Been a Rest Super fund member for any time between 5 December 2008 and 30 June 2019; and   
  • By default, signed up to a Rest Superannuation account which included an income protection insurance policy; and   
  • Had income protection insurance premiums deducted from your Rest Super account; and  
  • Either:  
    • Made no contribution to your Rest Superannuation account for 13 continuous months or more but continued to receive deductions from your account to cover income protection insurance premiums to Rest during that period; and/or  
    • Paid for multiple default income protection policies alongside your Rest income protection insurance policy.   
Anyone who meets the above criteria and was a Rest super fund member between 5 December 2008 and 30 June 2019 may be entitled to compensation.      To find out more, register here.    The class action was listed for a case management hearing on Friday 16 February, 2024 in the Federal Court. Justice Button made orders including for Rest to file its defence by the 28 March 2024. 
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Commercial Regulatory Issues

Arizona House Judiciary Committee Approves Litigation Investment Safeguards and Transparency Act

The campaign across the United States to introduce state-level legislation regulating third-party litigation funding continues to gain momentum, as the Arizona state legislature has moved forward with its own bill designed to increase oversight of funding arrangements. An article in Chamber Business News covers the progression of HB 2638, the Litigation Investment Safeguards and Transparency Act, which was advanced by Arizona’s House Judiciary Committee earlier this week. The draft bill was approved by the committee in a 5-4 vote and will now be sent to the House Rules Committee, before proceeding to a full vote in the House. The language in the current version of HB 2638 bears a striking similarity to the bill making its way through Florida’s legislature, with an emphasis placed on increasing transparency requirements and laying out restrictions on funders’ control over the litigation and settlement processes. As is the case in the Florida bill, HB 2638 prohibits litigation financiers from paying commissions or referral fees, and prohibits them from assigning any part of a litigation financing agreement. The bill, which is sponsored by Rep. Travis Grantham, has received support from the American Property Casualty Insurance Association, the U.S. Chamber of Commerce Institute for Legal Reform, and a coalition of Arizona’s business associations. Those organisations publicly opposing the bill include the Arizona Trial Lawyers Association and the International Legal Finance Association (ILFA).
Announcements Commercial People Moves

Global law firm behind $70 billion BHP mining disaster claim launch Sydney office

The lawyers behind a multibillion-dollar class action against BHP over the fatal 2015 Samarco dam disaster in Brazil, are opening an office in Sydney.

Global law firm Pogust Goodhead has corporates who fail to uphold their social and environmental responsibilities in its sights as it establishes an Australian presence with the opening of an office in Sydney’s legal district at 126 Phillip Street.

Pogust Goodhead is bringing a case against BHP, the world’s biggest miner, on behalf of over 700,000 claimants in Brazil following the collapse of the Fundão Dam in 2015. The collapse killed 19 people and released 50 million metres of toxic waste, destroying entire villages and livelihoods. The case is the largest class action of its kind and is set to go to trial in London in October 2024.

The new office in Sydney is expected to serve as a base to launch new claims against Australian corporations who fail to uphold their obligations.

Global Managing Partner Tom Goodhead said:

“We are delighted to be launching in Sydney. We are establishing a base in BHP’s backyard to ensure we explore every avenue in our fight for justice for the victims of one the world’s worst environmental disasters.”

“The mining sector in Australia plays a vital role in ensuring the availability of increasingly important rare and critical minerals, which makes it a major driver of economic growth and wellbeing. However, with this enormous wealth and influence comes a responsibility to the communities in which they operate - a responsibility premised on basic decency and fairness.”

“We are investigating a number of new cases against Australian multinational corporations, such as BHP, in which their commitment to this responsibility has been seriously thrown into question. With the launch of our Sydney office, we are putting Australian corporations on notice that we are ready to hold them to account.”

Described as ‘the first legal unicorn’, Pogust Goodhead, has seen huge growth in just over five years and now represents over three million clients worldwide. It is also accumulating a sizeable war chest, enabling it to confront some of the world’s largest corporate entities on behalf of its clients which include some of the most disadvantaged people on the planet.

In October last year the firm announced a landmark US$550m investment partnership with US-based emerging markets investment manager Gramercy. The firm employs over 700 staff and has offices in London, Rio, Edinburgh, Amsterdam, Miami, Philadelphia and now Sydney.

The Sydney office will be headed up by Partner | Head of Australia, Amie Crichton and Partner, Joshua Carton. With over 15 years’ experience, including across top-tier Australian and global firms, Amie is a highly sought after disputes specialist and commercial litigator. She has a proven track record in defending and prosecuting claims across the consumer, financial services, technology, resources and infrastructure sectors, with a primary focus on complex multi-party disputes and high-profile class actions. Amie is joined in the partnership by long standing colleague and complex commercial disputes and class action specialist, Joshua Carton

Partner | Head of Australia Amie Crichton said:

“Pogust Goodhead’s arrival in Australia is more than just another player in the legal field. What sets the firm apart is its global reputation and extensive network. In bringing their resources, knowledge and invaluable strategic partnerships to Australian shores, the firm is empowering individuals to seek justice on an unprecedented scale. This launch also signifies the firm’s recognition of Australia’s importance as a hub for representative proceedings and underscores its confidence in the country’s sophisticated class action framework. Pogust Goodhead is poised to leave an incredible mark, cementing their status as trailblazers in the pursuit of justice.”

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Case Developments Commercial

Industry Reaction to Ruling In Burford Capital, Sysco Antitrust Cases

As LFJ reported earlier this week, the ongoing saga of Burford Capital and Sysco Corp experienced a new twist as a Minnesota judge denied the joint motions for substitution of plaintiff in the antitrust lawsuits against pork and beef producers. Whilst Burford has already stated its intention to challenge the court’s ruling, litigation finance leaders and analysts have begun to offer their perspectives on what the potential impact of this court order may be. An article in Bloomberg Law gathers insights from legal scholars, senior executives from litigation funders and other organizations, as they react to Judge Docherty’s February 9 ruling. Maria Glover, civil procedure and civil justice professor at Georgetown Law School, framed the development as an unhelpful addition to the broader climate of scrutiny on litigation funding which has seen “a cascade of things going wrong.” In a similar vein of thought, Tom Baker, law professor at the University of Pennsylvania, said that the judge’s decision “will be something that the anti litigation funders will use to try to promote what the industry will regard as restrictive regulation.” However, leaders within the litigation finance industry have offered a far more measured reaction to the ruling, with Dai Wai Chin Feman, managing director at Parabellum Capital, describing it as “just more of the sideshow” and “a huge distraction from the underlying case.” Reinforcing this position, Rebecca Berrebi, litigation finance broker and consultant, emphasised that the Burford-Sysco situation was atypical for the industry, and “the result of a series of unfortunate events.”
Commercial Deals

Erso Capital: 2024 the ‘Crucial Year’ for Collective Actions in England & Wales

The important role that litigation funding plays in supporting group claims has been evident in the sub-postmasters scandal, with funders able to assert the value they can provide to the public in facilitating access to justice. Moreover, funders are looking at the coming year ahead with optimism, with their sights set on major cases that could build momentum for collective actions in England and Wales. A new blog post from Erso Capital looks at the current state of collective actions in England and Wales, assessing whether 2024 might be a transformative year for group claims in this jurisdiction. Starting with the premise that England and Wales are currently trailing behind other jurisdictions’ class action frameworks, the article examines some of the key cases and developments that may ‘forge a workable regime.’ The two major cases highlighted in the post are the Mariana dam and Dieselgate claims, with the former set for trial in April 2024, and the latter due for a series of hearings in the lead up to a trial next year. The fact that both of these claims are representing a huge number of claimants, leads Erso Capital to suggest that ‘both will test to the extreme the case management powers of the court.’ Observing how effectively these claims are managed and whether they are able to proceed in an orderly fashion, will provide the industry with a guide as to how viable these large-scale collective actions are in England and Wales. Erso Capital also highlight the potential for more representative claims to be brought ‘under CPR19 on behalf of a group of claimants with the same interest’, noting that the Court of Appeal’s decision in January 2024 to allow a representative action to proceed ‘may lay the ground for future representative claims.’ Similarly, the article suggests that there may be opportunities for the CAT to expand its remit, citing the ongoing trial in Le Patourel v BT Group Plc as an important marker that could open the way for ‘the CAT regime to be widened to allow non-competition claims.’
Commercial Regulatory Issues

Malaysian Government Minister Meets with EU Officials to Discuss Litigation Funding Regulations

The dispute between the Malaysian government and the Sulu heirs has been one of the most high profile international arbitration cases in recent times, raising issues around state sovereignty and the role of third-party funders in international arbitration. Whilst Malaysia has already managed to achieve some success towards overturning the unfavourable arbitration rulings, the government is now increasing its vocal support for reforms around the international regulation of litigation funding. An article in MalayMail highlights new comments from Datuk Seri Azalina Othman Said, the Malaysian government minister for law and institutional reform, who stated that she had participated in several bilateral meetings with European Union (EU) officials to discuss its own efforts towards regulating third-party litigation funding. These meetings reportedly included representatives from the European Commission, European Parliament and European External Action Service.  Azalina stated that “there is a pressing need for concerted global action to combat the misuse of third-party litigation funding solely for profit-seeking purposes, which subverts the pursuit of justice.” With the arbitrations and disputes in the Sulu case taking place across several EU jurisdictions, she highlighted that the issues which have affected Malaysia are also of concern to “EU member states that are not spared from such detrimental effects.” Azalina also expressed her desire for these discussions to continue with a wider and more international scope, including forums with policymakers from the United States and ASEAN. She stated that it was the Malaysian government’s position that there should be “a robust debate on regulating third-party litigation funding vis-a-vis the need for greater transparency, accountability and ethical professionalism among the funders.”
Case Developments Commercial

Piper Alderman Files Class Action Targeting IC Markets Over CFD Sales to Retail Investors 

As LFJ reported in October of last year, Piper Alderman have been exploring bringing a class action against International Capital Markets (IC Markets) over its marketing and sale of contracts for difference (CFD) products to retail investors. After a short delay, it now appears that this lawsuit has been formally filed in the Australian courts. An article by CDR reveals that Piper Alderman has filed its class action against IC Markets in the Federal Court of Australia, with the lawsuit submitted on 6 February. The class action focuses on allegations that IC Markets failed to adequately assess retail investors’ knowledge of CFD products and the associated risks with trading before selling them. Woodsford is providing the litigation funding for the class action, with the litigation looking to represent any investors who bought CFD products from IC Markets between 6 February 2018 and 6 February 2024. Commenting on the class action, Kate Sambrook, partner at Piper Alderman highlighted that many retail investors “have suffered significant financial losses and distress as a result of being offered highly-leveraged CFDs when they had little or no experience in trading complex financial products.” Woodsford’s chief investment officer, Charlie Morris stated that the funder is “committed to backing this action against IC Markets on behalf of those people who have suffered loss trading these excessively risky and complex products.” As LFJ has previously reported, this is not the only class action that Piper Alderman and Woodsford are involved in targeting trading platforms over the sale of CFD products, as both firms are engaged in separate class actions against IG Markets. In addition, according to CDR’s reporting, IC Markets is also the target of another class action representing retail investors who were sold CFD products, with that lawsuit being led by Echo Law.
Case Developments Commercial

Minnesota Judge Denies Burford and Sysco’s Joint Motions for Substitution of Plaintiff

The dispute between Burford Capital and Sysco Corp was one of the biggest litigation finance stories of 2023, providing critics of the industry with fresh talking points around the level of controls that funders can exert over litigation. Despite the core issues of the dispute being resolved last year, it appears that the story will continue throughout 2024, as a Minnesota judge has denied Burford’s request to be named as the plaintiff in the ongoing antitrust lawsuits. Reporting by Reuters covers the decision handed down by U.S. Magistrate Judge John Docherty, which not only denied Burford’s bid to take over the lawsuits, but also raised pointed questions about the reasons behind Burford’s request. Judge Docherty’s order denied the ‘joint motions for substitution of plaintiff’, which had been filed by Sysco Corp and Burford affiliate Carina Ventures LLC, in the ‘Pork Antitrust Litigation’ and ‘Cattle and Beef Antitrust Litigation’ cases. Judge Docherty found that there was no precedent for substituting a plaintiff for ‘a newly formed shell company created mid-suit for the sole purpose of litigating assigned claims on behalf of a litigation funder.’ He went on to emphasise, that in the court’s view, Burford Capital ‘has no stake in the litigation other than maximizing its return on an investment it made in the outcome of the litigation.’  Docherty’s ruling stressed that such a substitution would be in opposition to public policy, as it could discourage parties from reaching settlements. In what appeared to be a rather bold critique of the litigation funder’s involvement in these cases, Judge Docherty stated that ‘the litigation burden caused by Burford’s efforts to maximize return on investment has been enormous.’ He also described the joint motion’s ‘extraordinary nature’ as a contributing factor to the denial, noting that ‘the fact that no other litigation funder has apparently ever before asked to be substituted for its client under Rule 25(c)—leads the Court to be particularly chary of granting the substitution.’ Burford Capital responded to the decision by stating that it would contest the order.
Commercial Special Features

Key Takeaways from LFJs Digital Event: Litigation Finance: What to Expect in 2024

On February 8th, 2024, Litigation Finance Journal hosted a special digital event titled 'Litigation Finance: What to Expect in 2024.'  The event featured Gian Kull, Senior Portfolio Manager at Omni Bridgeway, David Gallagher, Co-Founder of LitFund, Justin Brass, Co-CEO and Managing Director of JBSL, and Michael German, Co-Founder and CIO at Lex Ferenda. The event was moderated by Peter Petyt, founder of 4 Rivers. The discussion covered a range of topics pertinent to the litigation funding space. Below are some key takeaways from the event: Which areas are you particularly interested in investing in over this coming year?  MG: There is a supposition that this industry will continue to grow in 2024. All of the indicators suggest that the industry will continue to grow--nearly all of the funders are funding bankruptcy-related cases, and three quarters are funding patent cases. Those are areas of interest to us, and I think that will continue to make sense, given the types of commercial cases they are - complex cases that require significant amounts of attorney time and defendant time,  and yield significant costs to the litigaiton. JB: We're going to see a continued expansion into the mass arbitration space. That is something that has been coming up with more frequency. Mass torts has been staying quite busy. And where we see a lot of potential is with the evolution of the secondary market. There are a lot of funders coming up with maturing cases, and it makes sense for those funders to redeploy that capital into other opportunities - not necessarily exit that case - but just sell a minority stake or a portion of it. We that in traditional fixed income classes, so we think that is going to continue in the funding market as well. Are you seeing any kind of appetite to invest in jurisdictions you haven't previously invest in? Have some jurisdictions matured to the point where you now will give them a serious look?  GK: That's a hard question to ask Omni Bridgeway as a whole, because we try to be in a lot of places. But from my own experience in Europe, we've gotten quite comfortable in the Netherlands, we have a very large investment in Portugal. Spain is next on the list. Italy is after that. The jurisdiction I've been most disappointed in - aside from the UK with the regulatory issues there - is Germany. For such a large economy, from a commercial collective redress perspective that is a dead end. As we move through Europe, I'll be watching the regulatory regimes and how those are tested over the coming years. Are you seeing many requests for monetization of judgements or awards, or is that not an area that you are particularly interested in?  DG: We're especially interested in that, largely because my partners have spent a lot of their careers making those types of investments. And just speaking from my own experience, that has always been an important part of the market, and continues to be an important part of the market. I think the availability of judgement preservation insurance makes funding more available and appropriate both on the funder's side and the client's side. In my view, it's very interesting to see the number of people in the market moving into the insurance space. In my view quite a surprising number - it's certainly indicative of a trend. LFJ just announced today that Ignite has launched a capital protection insurance resource. So there are a lot of interesting things happening here. Is it still early days for this space, because there are a lot of people moving into it with interest?  MG: I share the sentiment of having a general level of surprise with how many folks from the litigation finance industry insurance has drawn. From the Lex Ferenda perspective, insurance has proven to be a very expensive option, that ultimately my clients and I don't feel is worth the cost. But the vast majority of our investments - from an insurer's perspective - are probably the least good fit, so that's probably why it's reflecting in the price. JB: I think the insurance aspect of litigation finance is here to stay. There will be growing pains along the way. I think even as recently as last week, there were disclosures in the Affordable Care Act fee dispute where the law firm got an insurance policy related to its fee award. What was interesting there, was the law firm was seeking disclosure about the policy, and in essence how it worked. So not only is it new and here to stay, we're seeing it become public. The risk to early-stage cases is the pricing can be expensive, but what will happen over time, is like anything else, the insurers will be tracking the progress on those cases, and as funders come back as repeat customers, they'll be looking at you and factoring that relationship into their pricing, just like how a bank factors that into a credit score. I think the best path forward is figuring out how to work together and create a level of transparency and trust, because it's not going away. For the full recording of the event, click here.
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Announcements Commercial People Moves

Legal Finance Firm Creates Jobs Across Manchester, Dublin and The Netherlands Amid European Expansion

A prominent litigation finance firm has marked a significant growth milestone by establishing a new office in The Netherlands to complement its existing presence in Manchester and Dublin.

Nera Capital’s expansion into Europe is set to create 10 new positions across the company including at its newly minted location in Weert, Netherlands, with US expansion plans also in the pipeline.

The positions will span key areas including legal, finance, audit, origination, technology and marketing, demonstrating the company’s commitment to building a diverse and dynamic platform to support its successfully growing portfolio. 

Since the firm’s inception in 2011, Nera Capital has been a trailblazer in legal finance in multiple jurisdictions assisting over 100,000 claimants to date. Director Aisling Byrne expressed her enthusiasm at the growth, stating: "Our venture into Europe is a strategic move to better serve our clients and partners, providing enhanced access to justice through innovative funding solutions.

"Our new offices mark a geographical expansion that aligns with Nera Capital's vision for growth and accessibility. The decision to establish a presence in Europe reflects a careful consideration of market dynamics and growth potential."

With over 13 years of operation, Nera Capital is a specialized funding provider for law firms, offering support across diverse claim portfolios including Financial Mis-selling, Data Breach, Anti-trust, Personal Injury, and beyond.

In the realm of legal and financial markets, Nera Capital’s seasoned and dynamic team boasts decades of collective expertise and is dedicated to delivering profound insights and cultivating strategic industry partnerships with leading law firms across the globe. 

Byrne added “The positive outcomes from our ventures globally have not only fortified our influence, but bolstered industry relationships, enabling us to adeptly navigate and thrive in these new jurisdictions.”

“Our expansion into Europe is also about creating more access to justice. We are excited about the possibilities this brings and look forward to making a further positive impact on the legal landscape. I take immense pride in witnessing the remarkable growth of Nera Capital as it expands its footprint worldwide. It’s a testament to the hard work of our incredible team and is truly gratifying to see the firm's influence extend beyond borders, creating job opportunities and spearheading justice in Europe."

About Nera Capital

·       Established in 2011, Nera Capital is a specialist funding provider to law firms.

·       Provides Law Firm Lend funding across diverse claim portfolios in both the Consumer and

        Commercial sector.

·       Headquartered in Dublin, the firm also has offices in Manchester and The Netherlands.

·       www.neracapital.com

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Commercial Deals

Shoosmiths Report: 31% of UK GC’s Would Consider Third-Party Litigation Funding

As legal industry analysts continue to predict increasing degrees of litigation risk for corporations, in-house counsel are being forced to develop strategies to manage their resources that are already under threat from budget cuts. New research suggests that litigation funders may find a receptive audience among these legal professionals, with GCs at large UK companies showing interest in exploring alternative funding for litigation. Shoosmiths’ Litigation Risk 2024 report provides insight into the attitudes of in-house legal professionals in the UK, surveying over 360 senior general counsels and senior lawyers. The survey covered a wide variety of topics including emerging areas of litigation risk, allocating resources for disputes, anticipating and mitigating exposures, and responding to these increasing litigation risks. In the introduction to the report, Alex Bishop, partner and head of dispute resolution & litigation, says that ‘the fallout from geopolitical turmoil and other external shocks, GCs can rightly anticipate increasing caseloads alongside escalating litigation costs.’ As a result, report sheds some light on the views of these in-house lawyers towards the use of third-party funding to manage these escalating costs. In the section of the report on ‘allocating resources for disputes’, Shoosmiths highlight its finding that ‘increasing costs associated with litigation encourage organisations to explore new methods of funding.’ 31% of respondents said that they would consider using third-party litigation funding in response to rising litigation costs. When looking at those surveyed broken down into their respective industries, Shoosmiths found that when it comes to third-party funding, ‘twice as many GCs in the technology sector likely to consider it as a tool to combat rising costs compared with those working in financial services’. As for the reason behind this divide across industries, Shoosmiths’ report suggests that ‘financial services businesses may be less inclined to adopt third-party funding because they are less likely to be in the position of claimant.’
Commercial

Speakers and Agenda Announced for Brown Rudnick’s Litigation Funding Conference 2024

The speakers and agenda for Brown Rudnick’s upcoming Litigation Funding Conference have been announced, with an impressive range of speakers from across the litigation finance industry set to engage in a day of insightful discussions. The conference will be kicking off with a keynote speech from Camille M. Vasquez, partner and co-chair of Brown Rudnick’s Brand & Reputation Management group. Vasquez is best known for her co-leadership of Johnny Depp’s legal team in the Depp v. Heard defamation trial. The morning of the event will include three panel discussions, beginning with an opening session looking at the ‘State of the Market’, featuring Susan Dunn from Harbour Litigation Funding and Matthew Lo from Exton Advisors. This will be followed by a panel focusing on UK class actions in a post-PACCAR world, and another looking at litigation funding from the in-house perspective. Following the lunch break, the conference’s focus will expand to include discussions on law firm funding and the secondary market opportunities for litigation finance, with speakers including thought leaders from Gramercy, Leigh Day, Omni Bridgeway, and Augusta. The penultimate session of the day aims to look outside the UK, with a panel discussion focusing on collective redress in Europe. A variety of perspectives from different European jurisdictions will be included, with speakers sharing insights from the Netherlands, France, Italy and Spain. The final item on the agenda for the day will be a discussion on the latest trends and challenges in the CAT regime, featuring insights from Adam Erusalimsky at Litigation Capital Management, Genevieve Quierin at Stephenson Harwood, and Anneli Howard KC from Monckton Chambers. The full agenda and details for the conference can be found here, and LFJ looks forward to reporting live from the event on Thursday, 14 March.
Commercial Deals

Maturing Litigation Finance Market Creates Opportunities for General Counsel

The benefits of litigation funding for general counsel and legal departments are regularly espoused by litigation funders, who see a huge opportunity to support companies in monetizing their claims. In addition to reducing risk and freeing up corporate cash flow that would otherwise be lost in financing these claims, a new article suggests that in-house counsel can take advantage of third-party funding in a variety of ways.  In a guest article for Today’s General Counsel, Michael Kelley, partner at Parker Poe, takes a look at the maturation of the litigation finance industry and explores the different ways that in-house counsel can third-party funding to ‘turn the legal function from a cost center to a profit center in the eyes of their C-suites and boards of directors.’ Kelley begins his article by highlighting some of the less common use cases for litigation finance, noting that when it comes to the defense side, ‘an increasing number of corporate leaders are thinking about litigation finance as an important tool in how they manage risk.’ Whilst plaintiff-side funding is more regularly used, Kelley notes that funding agreements can be structured for defense-side clients by using a ‘repayment formula based on what the projected liability of the company would be if all claims against the company are successful.’ Kelley also points out that some legal departments are accessing litigation finance services to cover the costs of judgment preservation insurance, thereby allowing the business ‘to prudently hedge its bets in case the appeals court reduces or overturns the judgment.’ Turning to the more common use of funding to pursue claims, Kelley argues that third-party financing can allow C-suite executives to ‘think about those claims as assets they can monetize,’ whilst also preserving the company’s own cash to fuel other growth areas.  Kelley suggests that the increasing maturity of the litigation finance market brings added benefits for GCs considering third-party funding, as the growing number of established funders means that ‘the competition for meritorious and financially viable deals has increased.’
Commercial People Moves

Zachary Krug Joins NorthWall Capital as Managing Director of Legal Assets

In a post on LinkedIn, NorthWall Capital announced the appointment of Zachary Krug to the position of Managing Director of Legal Assets. Krug joins NorthWall Capital from his position as Director at Signal Capital Partners, where he led the firm’s litigation finance and legal assets strategy through a joint venture, SLF Capital Limited.  Krug’s career in litigation funding also includes over four years at Woodsford as a Senior Investment Officer, with a focus on investment opportunities in U.S. litigation, Latin American disputes, and international arbitration matters. Prior to his move into litigation finance, Krug spent a decade as a qualified litigator, having served as a senior trial associate in Quinn Emanuel’s Los Angeles office. In the announcement, NorthWall Capital highlighted Krug’s ‘decades of experience’ and stated that he would ‘play a prominent role in the expansion of our legal assets strategy.’
Announcements Commercial People Moves

Ignite Specialty Risk Launches in the US with Litigation Capital Protection Insurance

 Ignite Specialty Risk, a leading provider of litigation risk insurance, announced today the US launch of its Litigation Capital Protection Insurance offering and the appointment of litigation finance expert and former litigator, Nicole Silver as Lead Underwriter and Head of US Operations.

Ignite’s Litigation Capital Protection Insurance enables litigation funders and law firms to deploy capital across a portfolio of litigation assets with the assurance that their underlying investment will be protected even if the portfolio does not perform as expected. It is backed by a panel of AM Best A- (Excellent) rated capacity.

Ignite was founded in the UK in 2022 by a team with deep experience in both litigation funding and insurance. Following the company’s London market success offering the most extensive range of litigation insurance products among UK providers, Ignite is now bringing its Litigation Capital Protection Insurance product to the US market.

“Litigation Capital Protection Insurance is a relatively new concept to many funders and law firms, but it is quickly gaining popularity for its ability to protect a litigation asset portfolio investment and, as a result, facilitate a more efficient and robust capital structure within the asset class,” said Byron Sumner, Ignite CEO and Co-founder. “Ignite’s US team has significant experience in the structuring of these policies, having been at the forefront of their design for several years. We are excited to bring this expertise to the US market to help litigation funders and law firms benefit from a meaningful risk-transfer in the context of litigation, and ultimately secure access to justice for claimants with meritorious disputes.”

Silver, head of Ignite’s US operations, brings a 20-year track record litigating complex disputes. She has worked at Winston & Strawn and Greenberg Traurig and has appeared before numerous courts and tribunals including the US Supreme Court, various appellate and district courts, as well as the ICDR, ICC, ICSID, UNCITRAL, and the USTR. Silver’s experience in litigation finance includes work at Validity Finance, where she supervised and advised on litigation matters including performing due diligence and underwriting portfolios of cases. As a funder, she has had exposure to all aspects of litigation insurance, including ATE, judgment protection, and litigation capital protection insurance.

“Not only is Nicole considered to be a highly skilled attorney, she brings along an excellent track record of success litigating complex disputes, and her work as a funder has given her an insider’s view on all aspects of litigation insurance,” said Sumner. “Her extensive expertise within the insurance, investment, and legal communities will be invaluable to Ignite in the US market, and we could not be more delighted to be launching here with Nicole leading the charge.”

About Ignite:

Ignite Specialty Risk provides an extensive range of insurance products to meet the growing demands of the commercial litigation marketplace. Founded in March 2022 Ignite provides litigation risk insurance with AM Best Financial Strength Rating of A- (Excellent) capacity to a range of clients including litigation funders, law firms, and other lenders.

For a full list of licenses, visit ignitespecialty.com.

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Consumer

Florida Litigation Finance Bill Stalls in House Without Committee Support

As LFJ reported in recent weeks, the Florida state legislature has been the latest venue to see bills introduced which seek to impose a greater array of restrictions on the use of third-party litigation funding. Whilst the Senate saw success with its draft legislation at the committee stage, the House version of the bill has now failed to move forward twice. Reporting from Florida Politics provides an update on HB 1179, the ‘Litigation Investment Safeguards and Transparency Act’, which once again had its committee vote deferred and failed to progress past the House Justice Appropriations Subcommittee. The vote on the bill was deferred due to it failing to garner the support of Republican Representatives Mike Beltran, Mike Redondo and Paula Stark, along with the absence of Rep. Wayne Duggan.  With one absentee and three Republicans remaining opposed to the bill, the vote was deferred rather than face defeat by the Democrat representatives on the committee who would constitute a majority and are also opposed to the draft legislation. In an attempt to move the bill forward, Rep. Tyler Sirois has proposed an amendment that would soften disclosure requirements around financing agreements, by excluding the amount of funding provided and details of attorney’s fees and costs from any disclosure. It is unknown whether such an amendment will be sufficient to win majority support from the committee members, and if it is, when the committee could schedule a third attempt at a vote.
Case Developments Commercial

Music Royalty Claimant Points the Finger at Litigation Funder

When large companies are targeted by lawsuits supported by third-party litigation funders, it is not uncommon for these defendants to draw public attention to the presence of these funders to raise questions about the nature of the claim itself. A press release from one such corporate defendant appears to show this same tactic being used, with the company positioning the information as part of its response to ‘media commentary’ on the lawsuit. An article in Proactive Investors covers an announcement from Hipgnosis Songs Fund (SONG), a music royalty group, related to the ongoing legal claims being brought against it in the High Court. The litigation was filed last year by Hipgnosis Music Limited, who accused SONG, its founder Merck Mercuriadis, and the company’s investment adviser Hipgnosis Songs Management (HSM), of ‘diverting business opportunities to the trust and HSM.’ The company announcement largely focused on SONG’s appointment of commercial litigation specialists, Kastle Solicitors, ‘to review the claim’, and its intention to ‘seek to secure an indemnity from Mr Mercuriadis and Hipgnosis Songs Management against any liability that might be incurred.’  However, the announcement also revealed that SONG ‘has recently become aware that Hipgnosis Music Limited has secured litigation funding’, as the plaintiff is looking to ‘recover a substantial but as yet unquantified sum under the claim’. The announcement did not reveal the identity of the litigation funder or how the company has discovered the involvement of a third-party financier.
Commercial Deals

Gordon Legal Exploring Funded Class Action Against Magnis Energy Technologies

Class actions representing investors who lost money due to the failings or fraudulent behaviour of corporate directors are a top target for litigation funders, with Australia being a prime jurisdiction for these claims. The appetite for these class actions has been highlighted once again as an Australian law firm has stated that it is exploring a claim, supported by litigation funding, against a battery manufacturing company. Reporting by The Australian reveals that Gordon Legal is investigating a potential class action against Magnis Energy Technologies, which would represent both current and former Magnis investors who suffered financial losses. The claim would primarily focus on Magnis’ actions from 2021 onwards, with the law firm exploring potential wrongdoing around the company’s directors ‘providing market sensitive information to shareholders, while the market remained uninformed.’ Speaking with The Australian, Andrew Grech, partner at Gordon Legal, emphasised that the law firm was “at the beginning, not the end, of our investigations,” but explained that the scope of the claim could include “the conduct of the directors, officers, and (Magnis’) auditors Hall Chadwick.” He also revealed that the firm had already made progress towards securing third-party funding for any potential claim, saying, “The discussions with funders are proceeding as we would hope and like us they want to get to all the facts and circumstances before any decision is made.”