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Announcing the First Italian Securitization of Personal Injury Claims

The following was contributed by Francesco Dialti, Partner of CBA Studio Legale.

Litigation funding is a mechanism that is gradually taking root in the Italian market. In turn, application of Italian securitization mechanism to litigation funding is a very recent phenomenon.

So far, there had been only a few securitization transactions to fund private antitrust enforcement. 

Last August, finally the first Italian law securitization exclusively dedicated to fund litigation of claims for personal injuries was successfully completed, which represents a milestone for the development of the litigation funding market in Italy.

The transaction – carried out by the special purpose vehicle Prontodanno.it SPV 1 S.r.l., with the assistance of CBA Studio Legale as legal advisor – involves a target portfolio of over 500 claims, with a prospective value of €70 million, for compensation, under contractual and/or non-contractual liability, for personal injuries suffered by individuals as a result of medical malpractice or road accidents or accidents at work.

In the context of the transaction, Prontodanno.it S.r.l. acts as asset manager and Centotrenta Servicing S.p.A. as servicer. This note aims to provide a brief overview of such transaction, focusing in particular on its main structural and operational aspects. From a structural point of view, the transaction qualifies as a true sale securitization.

In order to aggregate as many claims as possible, it is a multi-originator transaction, with the assignors being individuals resident in Italy who own a potential right to compensation for damages suffered as a result of medical malpractice, road accidents or workplace accidents.

The purchase of these claims by a special purpose vehicle (SPV), set up specifically for this purpose under Italian law 130/1999, is financed through the issuance of partly-paid asset-backed securities (ABS), subscribed by a number of professional investors, including family offices and holding companies of some well-known Italian entrepreneurial families.

In particular, by subscribing to the securities and paying to the SPV the relevant subscription price – partly at the time of issue of the ABS and partly during the so-called “investment period” (see below) – the noteholders provide the SPV with the necessary funds not only to purchase the claims, but also to pay the relevant litigation costs.

The transaction has a revolving nature: cash flows generated by the collection of the claims, for a defined term (the “investment period”), are used exclusively to purchase new claims and finance the litigation costs; i.e., in the first phase, there is no repayment of capital to investors.

In order to cover the purchase price of new claims and the litigation costs to be incurred during the transaction, the SPV shall mainly use (i) the initial payments made by the noteholders at the time of subscription of the ABS and (ii) the amounts collected from time to time by the SPV from the claims. If such proceeds are insufficient to purchase new claims and/or finance ongoing litigation, the SPV may request additional payments from the noteholders until expiry of the investment period. 

It is to be noted that, as expressly provided under Italian securitization law, the claims and all related collections constitute assets segregated from all other assets of the SPV, being available exclusively to satisfy the SPV's obligations to the noteholders and any other creditor of the SPV in relation to the relevant transaction.

The asset manager Prontodanno.it S.r.l. has been appointed to select and evaluate the claims, while Centotrenta Servicing S.p.A., acting as servicer supervised by the Bank of Italy in accordance with applicable Italian legislation, is responsible for verifying the compliance of the transaction with the law and the relevant prospectus, as well as for the management and recovery of the claims.

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Francesco Dialti is a Partner and heads the Banking & Finance and Capital Markets practices. He has gained considerable experience in advising Italian and international banks on banking law, asset finance and structured finance. He advises financial institutions, companies and investors on real estate finance, project finance, asset finance and structured finance.

He is recognised by Chambers & Partners; Legal 500 ranks him as Leading Partner in B&F Lender side, as Recommended Lawyer in B&F Borrower side and Shipping, as Key Lawyer in Energy; Best Lawyers ranks him as Recommended Lawyer in Banking and Finance. IFLR1000 recognised him as Highly Regarded in B&F and in Project Finance, Leaders League and Lexology Index placed him in the Banking & Finance category.

At the Client Choice Awards, he was honoured in the Banking category in 2015, 2016, 2017, 2019, 2020 and 2022.

Omni Bridgeway Backs Landmark UK Apple Pay Class Action

By John Freund |

A new UK class action against Apple is set to test the boundaries of competition law and collective redress, with global litigation funder Omni Bridgeway stepping in to finance the case. James Daley, a well-known consumer advocate and founder of Fairer Finance, is spearheading the action with the backing of Milberg London LLP, targeting Apple’s alleged abuse of market dominance through its Apple Pay platform.

According to the claim website, the proposed class action—believed to represent as many as 50 million UK consumers—centers on Apple’s practice of restricting iPhone users to Apple Pay as the sole mobile wallet option, and imposing fees on card issuers that are ultimately passed on to consumers. Legal proceedings are expected to be filed before the UK’s Competition Appeal Tribunal within weeks.

Daley has assembled a high-profile team, including King’s Counsel Thomas de la Mare and economists from Oxera Consulting, to support the claim. Milberg’s Zena Prodromou and James Oldnall lead the legal team, and this marks the third competition claim in as many years for the firm’s increasingly active antitrust litigation practice.

Omni Bridgeway's Investment Manager Simon Latham praised the effort, saying, “Class actions are vital as they often represent the only avenue for consumers to gain access to justice.”

If successful, the case could reshape how platform monopolies are challenged in the UK and open the door for more consumer-focused litigation funders to support broad-based claims. As collective actions continue to gain traction in UK courts, litigation funding will remain a crucial enabler in holding dominant tech firms accountable.

Insurers vs. Legal Funders: Fresh Data Fuels the Debate

By John Freund |

An increasingly loud tug-of-war between insurers and litigation financiers is getting new oxygen from fresh analysis arguing that third-party funding is reshaping pricing and availability across commercial lines.

An article in CIR Magazine contends that legal funding has evolved from a niche alternative asset into a structural feature of modern disputes finance, citing estimates of roughly $18.9bn invested by year-end 2025 and a potential $67bn annual market by 2037. The piece situates TPF alongside other cost drivers facing carriers and notes that, for claimants and contingency-fee firms, non-recourse capital can be the bridge to pursue meritorious, multi-year claims that would otherwise stall.

Beyond the headline numbers, the analysis tracks the now-familiar clash of narratives. On one side, insurers and some trade groups attribute part of premium pressure to the availability of third-party capital and the resulting expansion in claims severity and duration. On the other, funders argue TPF is a risk-sharing tool that expands access to justice and, in commercial matters, helps rationalize corporate legal spend by shifting costs off balance sheet.

If carriers continue to publicly scrutinize TPF while capital keeps flowing into legal assets, expect better disclosure frameworks where appropriate, closer alignment between ATE and funding, and refined risk pricing. The friction itself may accelerate product innovation — including structures that blunt insurer concerns without sacrificing access to justice.

Global Litigation Funding Alliance Launches to Bridge Cross-Border Gaps

By John Freund |

A new international alliance of litigation finance professionals has been launched to streamline cross-border collaboration in the legal funding industry. Global Litigation Funding (GLF) brings together an initial cohort of independent litigation funding advisors and consultants with the aim of creating a smarter, faster, and more trusted network for legal finance across jurisdictions.

A LinkedIn post states that the alliance was founded by a group of well-known industry professionals, including Peter Petyt (4 Rivers), Kishore Jaichandani (Caveat Capital), Chris Garvey (Sachenga & Co.), Miko Burzec (independent advisor), and Dinesh Natarajan (Trident Strategy). Each of the founding members brings regional specialization and deep domain knowledge in litigation funding, legaltech, asset tracing, and financial structuring.

GLF’s strategy centers on collective intelligence and pooled resources. The alliance aims to improve deal execution capabilities by sharing insights, contacts, infrastructure, and back-office support. Members are positioned across key legal markets, offering clients both local insight and the reach of a global network. The alliance is not itself a fund but functions as a coordinated platform for funding advisors and stakeholders seeking to deliver cross-border legal finance solutions.

Each founding firm brings a complementary strength: 4 Rivers offers deep brokerage experience, Caveat Capital is known for its bespoke case structuring, Sachenga & Co. has earned Chambers recognition, Trident Strategy focuses on sports-related disputes, and Miko Burzec has a background in capital raising and institutional advisory.

GLF’s formation comes amid rising demand for globally coordinated litigation funding strategies. As legal disputes grow increasingly international, this kind of collaboration-focused model may serve as a blueprint for the future.

Consumer Legal Funding: Support for People, Not Control Over Litigation

By Eric Schuller |

The following was contributed by Eric K. Schuller, President, The Alliance for Responsible Consumer Legal Funding (ARC).

Summary: Consumer legal funding (CLF) is a non-recourse financial product that helps people meet essential living expenses while their legal claims are pending. It does not finance lawsuits, dictate strategy, or control settlements. In fact, every state that has enacted CLF statutes has explicitly banned providers from influencing the litigation process.

1) What Consumer Legal Funding Is

CLF provides modest, non-recourse financial assistance, typically a few thousand dollars to individuals awaiting resolution of a claim. These funds are used for rent, food, childcare, or car payments, not for legal fees or trial costs. If the case is lost, the consumer owes nothing.

CLF is not an investment in lawsuits or law firms, it is an investment in the consumer. 

2) Why Control Is Banned

The attorney–client relationship is central to the justice system. CLF statutes protect it by prohibiting funders from interfering. Common provisions include:
- No control over litigation strategy or settlement.
- No right to select attorneys or direct discovery.
- No settlement vetoes. Only the client, guided by counsel, makes those decisions.
- No fee-sharing or referral payments.
- No practice of law. Funders cannot provide legal advice.

These bans are spelled out in statutes across the country. Violating them exposes providers to penalties, voided contracts, and regulatory action.

3) Non-Recourse Structure Removes Leverage

Control requires leverage, but CLF offers none. Because repayment is only due if the consumer recovers, providers cannot demand monthly payments or seize assets. They do not fund litigation costs, so they cannot threaten to cut off discovery or expert testimony. The consumer retains ownership of the claim and full authority over all decisions.

4) Ethical Safeguards Reinforce Statutes

Even without statutory language, attorney ethics rules bar outside influence:
- Lawyers must exercise independent judgment and loyalty to clients.
- Confidentiality rules prevent improper information-sharing.
- No fee-sharing with non-lawyers ensures funders cannot 'buy' influence.
- The decision to settle rests solely with the client, not third parties.

Together, these rules and statutes guarantee that litigation decisions remain with client and counsel.

5) Market Realities: Why Control Makes No Sense

CLF contracts are relatively small, especially compared to the cost of litigation. They are designed to cover groceries and rent, not discovery budgets or jury consultants. Trying to control a case would be both unlawful and economically irrational.

Because repayment is contingent, funders want efficient and fair resolutions, not drawn-out litigation. Their interests align with consumers and counsel: achieving just outcomes at reasonable speed.

6) Addressing Misconceptions

- Myth: Funders push for bigger settlements.
  Fact: They cannot veto settlements. Dragging out cases only increases risk and cost.

- Myth: Funders get privileged information.
  Fact: Attorneys control disclosures; privilege remains intact. Access to limited case status updates does not confer control.

- Myth: CLF pressure consumers to reject fair settlements.
  Fact: Statutes forbid interference. And because advances are non-recourse, consumers are not personally liable beyond case proceeds.

- Myth: CLF is an assignment of the claim.
  Fact: Consumers remain the sole parties in interest. Providers have only a contingent repayment right.

7) How Statutes Work in Practice

States that regulate CLF typically require:
1. Plain-language contracts advising consumers to consult counsel.
2. Cooling-off periods for rescission.
3. Bright-line bans on control over strategy or settlement.
4. No fee-sharing or referral payments.
5. Regulatory oversight through registration or examination.
6. Civil remedies for violations.

This model balances access to financial stability with ironclad protections for litigation independence.

8) The Consumer’s Perspective

CLF does not alter case strategy; it alters life circumstances. Without it, many injured individuals face eviction, repossession, or the inability to pay basic bills. That pressure can lead to ‘forced settlements.' By covering essentials, CLF allows clients to consider their lawyer’s advice based on legal merits, not immediate financial desperation.

9) Compliance in Contracts

Standard CLF contracts reflect the law:
- Providers have no authority over legal decisions.
- Attorneys owe duties solely to clients.
- Terms granting control are void and unenforceable.

National providers adopt these clauses uniformly, even in states without explicit statutes, creating a strong industry baseline.

10) Enforcement and Oversight

Regulators can discipline providers, void unlawful terms, or impose penalties. Attorneys risk ethics sanctions if they allow third-party interference. Consumers may also have remedies under statute. These enforcement tools make attempted control both illegal and unprofitable.

11) Policy Rationale

Legislatures designed CLF frameworks to achieve two goals:
1. Preserve litigation integrity by keeping decisions between client and counsel.
2. Expand access to justice by giving consumers breathing room while claims proceed.

The explicit statutory bans on control ensure both goals are met.

Conclusion

Consumer legal funding is a support tool for people, not a lever over lawsuits. Statutes across the country make this crystal clear: CLF providers cannot influence litigation strategy, cannot veto settlements, and cannot practice law. The product is non-recourse, small in scale, and tightly regulated.

For consumers, CLF offers stability during difficult times. For the justice system, it preserves the attorney–client relationship and the independence of litigation. The result is access to justice without interference—because control of litigation is not only absent, but also expressly banned by law.

Justice Charity Gets £3.7M Unclaimed Settlement Windfall After Rail Fares Case

By John Freund |

The Competition Appeal Tribunal (CAT) has ordered that £3.7 million in unclaimed damages from a £25 million rail fare settlement be transferred to the Access to Justice Foundation (ATJF), citing what it called a “very low rate of take‑up” among eligible claimants.

An article in The Global Legal Post reports that the case involved Stagecoach South West Trains, which had been accused of abusing its dominant position by failing to make boundary fares accessible to Travelcard holders, resulting in some passengers being double-charged for parts of their journeys.

Though around 1.4 million passengers were estimated to be eligible, only about £216,500 was claimed by class members. The CAT allowed an intervention by the campaign group Fair Civil Justice (FCJ), which challenged whether the claimant law firms and funders were acting in the best interests of consumers. The tribunal noted that the take‑up was “very much short of the level predicted by the class representative.” The ATJF was praised for its ability to deploy the unclaimed funds in a way that benefits the public, including its grantees. There is still a pending determination by the tribunal on how much of the remaining settlement fund should go to claimant lawyers and the litigation funder.

This development throws into relief tensions in UK class actions between the potential scale of recoveries and the actual engagement of harmed consumers. For litigation funders and law firms, it raises fundamental questions: are cases structured and promoted in ways that reach those harmed; should unclaimed funds automatically divert to charity; and how should oversight and claims notice provisions be strengthened?

For the wider legal funding industry, this could signal pushback on low participation, increased regulatory attention, and pressure to ensure that collective actions are both meaningful and accessible to their intended beneficiaries.

IEA Calls for Reform of UK Class Action System, Citing £134 Billion in Claims

By John Freund |

The Institute of Economic Affairs (IEA) has issued a call for major reform of the UK’s collective proceedings regime, warning that the current system invites economically inefficient claims and undermines justice for consumers.

An article in ICLG reports that the IEA estimates over £134 billion in pending class action claims are currently before the Competition Appeal Tribunal, involving approximately 655 million potential claimants—more than ten opt-out claims for every person in the UK. While the regime was initially designed to allow consumers to pursue redress in competition cases, the IEA argues it has increasingly been used for speculative litigation, often delivering poor outcomes. The report cites the Merricks v Mastercard case, which originally sought £14–17 billion but ultimately settled for just £200 million, or less than two percent of the original amount.

The IEA’s critique also extends to the litigation funding models supporting these cases. Following the UK Supreme Court’s 2023 decision in PACCAR, which restricted certain types of litigation funding agreements, the IEA contends that funding arrangements still misalign incentives and may delay compensation to claimants. Among the reforms it proposes are: requiring early payments to a portion of class members before a case is certified; establishing a public valuation mechanism to promote competition among funders; enhancing the economic analysis applied at the certification stage; and simplifying damages assessments by focusing on first purchasers rather than tracing harm down complex supply chains.

While the IEA acknowledges that the opt-out class action system has value, it argues that without reform, it risks damaging business confidence, overburdening the courts, and eroding trust in the legal system. Critics of the report, including funder Winward Litigation Finance, suggest some of the recommendations are impractical and fail to grasp the realities of litigation finance.

Ciarb Finalizes Third-Party Funding Guideline for Arbitration

The Chartered Institute of Arbitrators (Ciarb) has finalized a guideline intended to bring greater clarity and consistency to the use of third-party funding (TPF) in international arbitration. The document addresses practical touchpoints that routinely surface in funded cases, including disclosure expectations, funder–party control, conflicts management, security-for-costs, and termination provisions.

An article in Global Arbitration Review reports that Ciarb’s move follows a multi-year effort to codify best practices as funding becomes a normalized feature of international disputes.

The guideline frames TPF as non-recourse finance that can enhance access to justice, while underscoring the need for transparent guardrails around influence and information-sharing. It also emphasizes tribunal discretion: disclosure should be targeted to the issues actually before the tribunal, with the goal of mitigating conflicts and addressing cost-allocation (including security) without converting funding agreements into mini-trials.

In parallel materials, Ciarb stresses that funded parties need not be impecunious and that funding may extend beyond fees to case-critical costs such as experts and enforcement.

For funders and users alike, the practical effect could be fewer procedural detours and more consistent outcomes on recurring questions (what to disclose, when to disclose it, and how to handle costs). If widely adopted in practice — by counsel in drafting and by tribunals in procedural orders — the guideline may reduce uncertainty premiums in term sheets and, in turn, lower the effective cost of capital for meritorious claims. It also sets a useful marker as regulators and courts continue to revisit TPF norms across key jurisdictions.

Loopa Finance Joins ELFA Amid European Expansion Push

By John Freund |

Litigation funder Loopa Finance has officially joined the European Litigation Funders Association (ELFA), marking a significant step in its ongoing expansion across continental Europe. Founded in Latin America and recently rebranded from Qanlex, Loopa offers a suite of funding models—from full legal cost coverage to hybrid arrangements—designed to help corporates and law firms unlock capital, manage litigation risk, and accelerate cash flow.

The announcement on Loopa Finance's website underscores the company's commitment to transparency and ethical funding practices. Loopa will be represented within ELFA by Ignacio Delgado Larena-Avellaneda, an investment manager at Loopa and part of its European leadership team.

In a statement, General Counsel Europe Ignacio Delgado emphasized the firm’s belief that “justice should not depend on available capital,” describing the ELFA membership as a reflection of Loopa’s approach to combining legal acumen, financial rigor, and technology.

Founded in 2022, ELFA has rapidly positioned itself as the primary self-regulatory body for commercial litigation funding in Europe. With a Code of Conduct and increasing engagement with regulators, ELFA provides a platform for collaboration among leading funders committed to professional standards. Charles Demoulin, ELFA Director and CIO at Deminor, welcomed Loopa’s addition as bringing “a valuable intercontinental dimension” and praised the firm’s technological innovation and cross-border strategy.

Loopa’s move comes amid growing connectivity between the Latin American and European legal funding markets. For industry watchers, the announcement signals both Loopa’s rising profile and the growing importance of regulatory alignment and cross-border credibility for funders operating in multiple jurisdictions.

Burford Covers Antitrust in Legal Funding

By John Freund |

Burford Capital has contributed a chapter to Concurrences Competition Law Review focused on how legal finance is accelerating corporate opt-out antitrust claims.

The piece—authored by Charles Griffin and Alyx Pattison—frames the cost and complexity of high-stakes competition litigation as a persistent deterrent for in-house teams, then walks through financing structures (fees & expenses financing, monetizations) that convert legal assets into budgetable corporate tools. Burford also cites fresh survey work from 2025 indicating that cost, risk and timing remain the chief barriers for corporates contemplating affirmative recoveries.

The chapter’s themes include: the rise of corporate opt-outs, the appeal of portfolio approaches, and case studies on unlocking capital from pending claims to support broader corporate objectives. While the article is thought-leadership rather than a deal announcement, it lands amid a surge in private enforcement activity and a more sophisticated debate over governance around funder influence, disclosure and control rights.

The upshot for the market: if corporate opt-outs continue to professionalize—and if boards start treating claims more like assets—expect a deeper bench of financing structures (including hybrid monetizations) and more direct engagement between funders and CFOs. That could widen the funnel of antitrust recoveries in both the U.S. and EU, even as regulators and courts refine the rules of the road.

Almaden Arbitration Backed by $9.5m Funding

By John Freund |

Almaden Minerals has locked in the procedural calendar for its CPTPP arbitration against Mexico and reiterated that the case is supported by up to $9.5 million in non-recourse litigation funding. The Vancouver-based miner is seeking more than $1.06 billion in damages tied to the cancellation of mineral concessions for the Ixtaca project and related regulatory actions. Hearings are penciled in for December 14–18, 2026 in Washington, D.C., after Mexico’s counter-memorial deadline of November 24, 2025 and subsequent briefing milestones.

An announcement via GlobeNewswire confirms the non-recourse funding arrangement—first disclosed in 2024—remains in place with a “leading legal finance counterparty.” The company says the financing enables it to prosecute the ICSID claim without burdening its balance sheet while pursuing a negotiated settlement in parallel. The update follows the tribunal’s rejection of Mexico’s bifurcation request earlier this summer, a step that keeps merits issues moving on a consolidated track.

For the funding market, the case exemplifies how non-recourse capital continues to bridge resource-intensive investor-state disputes, where damages models are sensitive to commodity prices and sovereign-risk dynamics. The disclosed budget level—$9.5 million—sits squarely within the range seen for multi-year ISDS matters and underscores the need for careful duration underwriting, including fee/expense waterfalls that can accommodate extended calendars.

Should metals pricing remain supportive and the tribunal ultimately accept Almaden’s valuation theory, the claim could deliver a meaningful multiple on invested capital. More broadly, the update highlights steady demand for funding in the ISDS channel—even as governments scrutinize mining concessions and environmental permitting—suggesting that cross-border resource disputes will remain a durable pipeline for commercial funders and specialty arbitrations desks alike.

Legalist Expands into Government Contractor Lending

By John Freund |

Litigation funder Legalist is moving beyond its core offering of case-based finance and launching a new product aimed at helping government contractors manage cash flow. The San Francisco-based firm, which made its name advancing capital to plaintiffs and law firms in exchange for a share of litigation proceeds, is now offering loans backed by government receivables.

An article in Considerable outlines how Legalist’s latest product is designed to serve small and midsize contractors facing long payment delays—often 30 to 120 days—from federal agencies. These businesses frequently struggle to cover payroll, purchase materials, or bid on new work while waiting for disbursements, and traditional lenders are often unwilling to bridge the gap due to regulatory complexities and slow timelines.

Unlike litigation finance, where returns are tied to legal outcomes, these loans are secured by awarded contracts or accounts receivable from government entities. Legalist sees overlap in risk profiling, having already built underwriting systems around uncertain and delayed payouts in the legal space.

For Legalist, the move marks a significant expansion of its alternative credit offerings, applying its expertise in delayed-cashflow environments to a broader market segment. And for the legal funding industry, it signals the potential for funders to diversify their revenue models by repurposing their infrastructure for adjacent verticals. As more players explore government receivables or non-litigation-based financing, the definition of “litigation finance” may continue to evolve.

Funders’ Hidden Control Spurs Calls for Litigation‑Funding Transparency

By John Freund |

Litigation funding contracts are usually sealed from public view—but recently disclosed agreements suggest they often grant funders much more power than commonly acknowledged. A batch of nine contracts submitted by Lawyers for Civil Justice, a corporate and defense‑oriented group, to a judicial panel considering a proposed federal rule to mandate disclosure reveals funders in some instances reserve the right to reject settlement offers, choose or even replace counsel, and take over lawsuits entirely.

An article in Reuters explains that one example involves a 2022 contract between Burford Capital and Sysco Corp, in which Sysco is forbidden to accept a settlement without the funder’s written approval. Another case shows a contract with Longford Capital treating a change of counsel as a “Material Adverse Event,” again requiring funder consent. These terms reveal control far beyond the “passive investor” role many funders claim.

Currently, many funders argue that because their agreements do not always alter case control in practice, full disclosure of the contracts is unnecessary. But defenders of transparency say even the potential for control—whether or not exercised—can materially affect litigation outcomes, especially in settlement negotiations.

There is increasing momentum toward mandatory disclosure. Over 100 corporations, including those in tech, pharma, and automotive sectors, have urged the U.S. Advisory Committee on Civil Rules to adopt a rule requiring disclosure of funder identities and control rights. Several states (like Kansas, Louisiana, Indiana, West Virginia) have also put disclosure requirements into law. In Kansas, for instance, courts may review full funding agreements in private, while opposing parties receive more limited disclosures.

LCM Exits Gladstone Class Action; Writes Off A$30.8M

By John Freund |

Litigation Capital Management has pulled funding from a long-running Australian class action brought by commercial fishers against the state-owned Gladstone Ports Corporation, opting to cut its losses and reset capital allocation. The funder said the case has now settled on terms that provide a full release between the parties and a payment to the defendant toward costs—covered in full by after-the-event insurance—pending court approval in late October.

An announcement on Investegate details that LCM will write off A$30.8 million, equal to its cash invested, and has launched a formal strategic review with Luminis Partners. Management attributed the exit to portfolio discipline following adverse outcomes and noted preparation issues and aspects of expert evidence that, in the company’s view, no longer supported the case theory.

LCM is pursuing two potential recovery avenues: a costs assessment it says could recoup a portion of legal fees paid, and a prospective claim against the original solicitors for alleged breach of contract and negligence. Beyond this case, LCM flagged near-term milestones: an expected judgment within roughly three weeks in a separate UK commercial litigation co-funded alongside Fund I (A$20.6 million LCM capital at stake), and a decision soon on permission to appeal an April 1 arbitration loss.

Full-year FY25 results will be presented on October 1, when management plans to update investors on strategy and portfolio priorities.

Padronus Finances Collective Action Against Meta Over Illegal Surveillance

By John Freund |

Austrian litigation funder Padronus is financing the largest collective action ever filed in the German-speaking world. The case targets Meta’s illegal surveillance practices.

Together with the Austrian Consumer Protection Association (VSV) as claimant, the German law firm Baumeister & Kollegen, and the Austrian law firm Salburg Rechtsanwälte, Padronus has filed collective actions in both Germany and Austria against Meta Platforms Ireland Ltd. The lawsuits challenge Meta’s extensive surveillance of the public, which, according to Padronus and VSV, violates European data protection law.

“Meta knows far more about us than we imagine – from our shopping habits and searches for medication to personal struggles. This is made possible by so-called business tools that are deployed across the internet. The U.S. corporation is present on third-party sites even when we are logged out of its platforms or when our browser settings promise privacy. This breaches the GDPR,” explains Richard Eibl, Managing Director of Padronus.

Meta generates revenue by allowing companies to place paid advertisements on Instagram and Facebook. Which ad is shown to which user depends on the user’s interests, identified by Meta’s algorithm based on platform activity and social connections. In addition, Meta has developed tools such as the “Meta Pixel,” embedded on countless third-party websites, including those dealing with sensitive personal matters. The “Conversions API” is integrated directly on web servers, meaning data collection no longer occurs on the user’s device and cannot be detected or disabled, even by technically savvy users. It bypasses cookie restrictions, incognito mode, or VPN usage.

Millions of businesses worldwide use these tools to target consumers and analyze ad effectiveness. “Use of these technologies is now omnipresent and an integral part of daily internet usage. Every user becomes uniquely identifiable to Meta at all times as soon as they browse third-party sites, even if not logged into Facebook or Instagram. Meta learns which pages and subpages are visited, what is clicked, searched, and purchased,” says Eibl. He adds: “This surveillance has gone further than George Orwell anticipated in 1984 – at least his protagonist was aware of the extent of his surveillance.”

While Meta users can configure settings on Instagram and Facebook to prevent the collected data from being used for the delivery of personalized advertising, the data itself is nevertheless already transmitted to Meta from third-party websites prior to obtaining consent to cookies. Meta then, without exception, transfers the data worldwide to third countries, in particular to the United States, where it evaluates the data to an unknown extent and passes it on to third parties such as service providers, external researchers, and authorities.

Numerous German district courts (including Berlin, Hamburg, Munich, Cologne, Düsseldorf, Stuttgart, Leipzig) and more than 70 other courts have already confirmed Meta’s illegal surveillance in over 700 ongoing individual lawsuits. These first-instance rulings, achieved by lawyers Baumeister & Kollegen, are not yet final. Eibl notes: “The courts have awarded plaintiffs immaterial damages of up to €5,000. If only one in ten of the up to 50 million affected individuals in Germany joins the collective action, the dispute value rises to €25 billion. This is the largest lawsuit ever filed in the German-speaking world.”

Meta’s lack of seriousness about user privacy is well-documented. In 2023, Ireland’s data protection authority fined Meta €1.2 billion for illegal U.S. data transfers. In 2021, Luxembourg imposed a €746 million fine for misuse of user data for advertising. In 2024, Ireland again fined Meta €251 million for a major security breach. In July 2025, a U.S. lawsuit was launched against several Meta executives, demanding $8 billion in damages for systematic violations of an FTC privacy order. Richard Eibl notes: “This case goes to the heart of Meta’s business model. If we succeed, Meta will have to stop this unlawful spying in our countries.”

The new collective action mechanism for qualified entities such as VSV is a novel legal instrument. If successful, the unlawful practice must be ceased, and compensation paid to consumers who have joined the case.

The lawsuit is expected to trigger political tensions with the current protectionist U.S. administration. Only last week, the U.S. President again threatened the EU with new tariffs after the Commission imposed a €2.95 billion fine on Google. “We expect the U.S. government will also try to exert pressure in our case to shield Meta. But European data protection law is not negotiable, and we are certain we will not bow to such pressure,” says Julius Richter, also Managing Director of Padronus.

Consumers in Austria and Germany can now register at meta-klage.de and meta-klage.at to join the collective action without any cost risk. Padronus covers all litigation expenses; only in the event of success will a commission be deducted from the recovered amount.

Seven Stars, PayTech Launch Crypto-to-Litigation Bond with 14% Fixed Return

By John Freund |

In a move that could reshape both crypto and legal funding markets, Seven Stars Structured Solutions (UK) and PayTech (Dubai) have announced the launch of the world’s first “Real World Staking” bond—an investment vehicle that allows cryptocurrency holders to fund UK litigation assets and earn a fixed 14% annual return.

A press release from Seven Stars Legal details how the offering bridges the $2.3 trillion crypto market and the traditionally conservative litigation finance sector. Issued under a Dubai VARA-regulated framework and processed through licensed VASP GCEX, the bond enables high-net-worth and institutional crypto investors to earn yield from UK legal claims—specifically, the massive discretionary commission arrangement (DCA) claims market following a recent UK Supreme Court ruling.

Unlike conventional DeFi staking models that depend on volatile smart contracts, this new “Real World Staking” concept ties digital assets to real-world legal outcomes. Proceeds fund Seven Stars’ litigation strategies, which have seen over £40 million deployed across 56,000 cases with a reported 90%+ success rate. Investors can receive returns in USDC or GBP and benefit from a three-jurisdiction compliance structure involving Dubai, the UK, and the EU.

This initiative is being billed as a milestone in the institutional adoption of digital assets, offering crypto holders both fixed income potential and exposure to a highly regulated, historically insulated asset class. It also underscores a broader trend of convergence between blockchain technology and traditional finance.

If successful, this model could set a template for future tokenized legal finance products, raising key questions about the role of crypto infrastructure in expanding access to alternative legal assets. Legal funders and institutional investors alike will be watching closely.

Gramercy Turmoil Threatens Pogust’s £36bn BHP Claim

By John Freund |

The law firm leading one of the UK’s largest-ever class actions is facing a destabilizing internal revolt that could ripple through a landmark case. Pogust Goodhead—fronting a £36 billion claim against BHP tied to the 2015 Mariana dam disaster—has seen senior lawyers depart and staff raise concerns over governance and independence as tensions mount with its principal backer, Gramercy Funds Management.

An article in Financial Times reports that the flashpoint follows the abrupt replacement of co-founder Tom Goodhead as CEO and a subsequent $65 million credit top-up from Gramercy, on top of an earlier substantial funding package. According to the FT, at least two senior partners—previously central to marquee matters, including BHP and Dieselgate—have stepped down, while a staff group has challenged transparency around funder involvement. The Solicitors Regulation Authority is said to be monitoring events as BHP’s counsel queries whether the firm can stay the course. Pogust’s chair rejects any suggestion of external control, insisting the firm remains independently managed and committed to clients.

For litigation finance observers, the story lands at the intersection of capital intensity, governance, and case continuity. Large, multi-year collective actions carry heavy, lumpy spend profiles and complex funder covenants; when leadership flux and fresh capital coincide mid-stream, questions naturally arise about strategic autonomy, settlement posture, and reputational risk.

If the rift deepens, the implications extend beyond a single case: market confidence in high-leverage portfolio strategies could be tested, and counterparties may push harder on disclosure or consent terms. The episode will likely fuel ongoing debates over funder influence and the safeguards needed when billions—and access to justice—are on the line.

Consumer Legal Funding and Social Inflation: Clearing the Misconceptions

By Eric Schuller |

The following was contributed by Eric K. Schuller, President, The Alliance for Responsible Consumer Legal Funding (ARC).

Over the past decade, insurance companies, tort reform advocates, and certain think tanks have increasingly pointed to “social inflation” as a driving force behind higher insurance premiums and larger jury awards. Let’s be clear “social inflation” is not a formally a defined economic concept; it’s an insurance industry narrative that describes some real legal and cultural trends The term itself is elastic, meant to describe cultural, legal, and economic shifts that allegedly lead to outsized liability costs. Critics have attempted to lump Consumer Legal Funding (CLF) into this category, claiming that it somehow fuels runaway verdicts and higher settlement values.

But such claims are deeply flawed. Consumer Legal Funding is fundamentally distinct from litigation financing or any mechanism that could impact the cost of litigation or influence the size of awards. CLF does not bankroll attorneys, experts, or trial strategies; rather, it provides modest, non-recourse financial assistance to injured individuals so they can pay rent, keep the lights on, and buy groceries while their legal claims move through an often slow and complex justice system.

Consumer Legal Funding has nothing to do with social inflation by exploring the mechanics of CLF, unpacking the definition of social inflation, analyzing the evidence, and dismantling the arguments insurers use to conflate the two.

Understanding Social Inflation

“Social inflation” is a term widely used in the insurance industry but often poorly defined. Broadly, it refers to increases in insurance claims costs beyond what can be explained by general economic inflation. Insurers believe it is due to several factors, including:

  1. Expanding liability concepts – Courts and legislatures allowing broader recovery for damages.
  2. Plaintiff-friendly juries – Larger awards due to shifting attitudes toward corporations and insurers.
  3. Aggressive plaintiff bar strategies – Creative legal theories, demand of damages at high levels.
  4. Erosion of tort reform – Judicial rulings striking down statutory caps or limits.

While these elements may influence claims costs, they have little to do with the day-to-day survival assistance provided through Consumer Legal Funding. CLF is not part of the litigation itself—it is part of the consumer’s household economy.

What Consumer Legal Funding Actually Is

Consumer Legal Funding is a simple, consumer-focused financial product:

  • Non-recourse funds – The consumer receives a small amount of financial assistance (average $3,000–$5,000) against the potential proceeds of their legal claim. If they lose the case, they have no further obligation.
  • Restricted use – The funds cannot be used to pay legal fees or litigation costs. They are meant for everyday living expenses such as rent, medical co-pays, utilities, and food.
  • Separate from litigation – Attorneys remain fully in charge of legal strategy, and courts determine the value of the case without reference to whether a consumer has received CLF.
  • Statutory protections – In states where CLF is regulated, statutes explicitly prohibit the funds from being used to finance litigation.

In essence, CLF is about financing life, not litigation it ensures that injured consumers are not put into a “forced settlement” simply because they cannot afford to wait for fair compensation.

The False Link Between CLF and Social Inflation

Opponents of CLF often argue that providing consumers with financial breathing room allows them to hold out for larger settlements, thereby inflating claims costs. This narrative is problematic for several reasons:

  1. Settlements are driven by case value, not desperation.
    Settlement negotiations are based on liability facts, damages evidence, and the likelihood of success at trial. A consumer’s ability to pay rent has no bearing on whether a defendant is legally liable for an injury.
  2. CLF levels the playing field, not tips it.
    Insurers routinely exploit financial desperation to force low-ball settlements. CLF prevents this imbalance but does not artificially inflate case value, it simply ensures consumers can wait for the fair value of their settlement and not a forced settlement. 
  3. No evidence connects CLF to higher verdicts or insurance premiums.
    Despite repeated assertions, insurers have not produced empirical studies demonstrating that states with regulated CLF experience higher claim costs or premium growth compared to states without it.
  4. Average funding amounts are too small to affect case economics.
    With fundings averaging just a few thousand dollars, it cannot influence the outcome of the litigation.

Social Inflation Drivers: CLF Isn’t One of Them

To further dismantle the narrative, it is important to examine what is thought to be the drivers of “social inflation” and show where CLF stands in relation.

1. Jury Attitudes and “Nuclear Verdicts”

Juries may award higher damages due to distrust of corporations or outrage over egregious conduct. These cultural and psychological factors are wholly unrelated to whether a consumer had help paying rent while waiting for trial.

2. Expanding Damages Categories

Courts and legislatures increasingly allow recovery for noneconomic damage or broaden definitions of liability. CLF has no influence over judicial doctrine or statutory reform.

3. Litigation Tactics 

CLF contracts explicitly bar funding companies from interfering in legal strategy.

By every measure, CLF is not a driver of social inflation but a consumer protection tool.

Evidence From Regulated States

Roughly a dozen states—including Ohio, Nebraska, Oklahoma, Utah, and Vermont—have enacted statutes regulating Consumer Legal Funding. These states continue to have competitive insurance markets, and there is no evidence of outsized premium growth attributable to CLF.

If CLF were truly a driver of so-called social inflation, one would expect observable differences in these states’ insurance markets compared to others. None exists.

Insurer Motivations for Blaming CLF

Why, then, do insurers persist in linking CLF to social inflation? Several strategic motivations are at play:

  1. Deflection from internal cost drivers.
    Insurers face rising costs due to investment losses, catastrophic weather events, and corporate overhead. Blaming “social inflation” provides a convenient external scapegoat.
  2. Preservation of settlement leverage.
    Low-ball settlements save insurers billions annually. CLF disrupts this model by giving consumers the financial means to reject unfair offers.
  3. Regulatory advantage.
    By conflating CLF with commercial litigation finance, insurers push for broad disclosure and restrictions that would make CLF less accessible, thereby tilting the field back in their favor.

In short, attacks on CLF are less about economics and more about control of the settlement process.

Consumer Stories: The Human Impact

Behind every policy debate are real people. Consider these examples:

  • Maria, a single mother in Ohio, suffered a serious injury in a car accident. While her case moved through litigation, she was unable to work. A $3,000 funding allowed her to pay rent and avoid eviction. Her case later settled for fair value based on her medical damages, not because she received CLF.
  • James, a factory worker in Tennessee, used a $4,500 funding to cover medical co-pays and keep food on the table for his family. Without CLF, he would have been pressured to accept an early, inadequate settlement. His attorney, free from outside interference, negotiated based on case facts.

These stories illustrate that CLF prevents forced settlements, a concept fundamentally at odds with the idea of social inflation.

Reframing the Debate: CLF as a Consumer Protection Tool

Instead of vilifying CLF, policymakers and regulators should recognize it as a consumer protection mechanism that:

  • Preserves access to justice by ensuring consumers can sustain themselves while cases proceed.
  • Protects vulnerable populations from financial exploitation by insurers.
  • Operates transparently under statutory frameworks that prohibit interference with litigation.
  • Provides an alternative to payday loans or credit card debt.

By reframing CLF in this way, legislators can see that it is part of the solution to financial inequity in the justice system, not a contributor to systemic cost drivers like “social inflation”.

Conclusion

The narrative that Consumer Legal Funding contributes to social inflation is unsupported by evidence, inconsistent with the mechanics of the product, and misleading its intent. CLF does not increase jury awards, expand liability doctrines, or drive insurance premiums. Instead, it provides a lifeline for consumers caught in the limbo of pending legal claims.

Policymakers should reject the false linkage and recognize Consumer Legal Funding for what it is: a narrow, humane financial product that has nothing to do with so called “social inflation”, but everything to do with justice and survival.

Archetype Sues Ex-Co-Founder Over $100M Trade-Secret Raid

By John Freund |

Fresh on the heels of Siltstone's announcement of a trade secrets lawsuit against former GC Mani Walia, another funder-versus-insider fight has broken out - this time in Nevada federal court, where Archetype Capital Partners alleges that its former co-founder orchestrated a “lift-out” of confidential risk models and deal intelligence to seed a rival venture.

Reuters reports that the $100 million complaint names Andrew Schneider and Georgia-based Bullock Legal Group, claiming they misappropriated Archetype’s proprietary underwriting, pipelines and client data tied to the firm’s mass-tort thesis—including lawsuits targeting alleged videogame-addiction harms. The suit also points to nondisclosure and confidentiality obligations Archetype says were ignored, with knock-on damages measured in lost opportunities and diverted investors.

Defendants have not yet responded publicly. Filed in the U.S. District Court for the District of Nevada (No. 2:25-cv-01686), the case frames a familiar narrative as litigation finance matures: the more funders professionalize and productize origination and risk analytics, the more those intangible assets look like trade secrets worth fighting over. Archetype says its internal marketing strategies, investment criteria and pricing models were lifted to help secure outside capital and counterparties for a competing platform.

Expect more of this as fundraising cycles lengthen and origination competition intensifies. Litigation finance is inheriting private-equity-style playbooks on noncompetes, clawbacks and trade-secret enforcement. The sector could soon see a wave of policy upgrades—employee handbooks, offboarding policies, and standardized NDAs—that add friction in the near term but reduce leakage risk and protect valuation over time.

Nera Capital Surpasses $1 Billion in ERV, Cements Global Standing

By John Freund |

Litigation funder Nera Capital has announced a major milestone, revealing its portfolio’s expected realisation value (ERV) has now exceeded $1 billion—a figure that reflects both realised and anticipated returns net of investor repayments. The Dublin-based firm, which also maintains offices in Manchester, the Netherlands, and the United States, says this landmark demonstrates its rapid growth and underlines its place among the leading players in the litigation finance space.

A press release from Nera Capital notes that this surge in ERV comes just months after Nera crossed $100 million in cumulative investor repayments. That figure is now expected to top $150 million this quarter. The firm credits its success to a disciplined approach to case selection, a tech-enabled risk management strategy, and an emphasis on scalable funding models—particularly in the realms of financial mis-selling, cartel damages, and mass consumer redress.

ERV, a key industry metric, estimates the net value funders expect to realise after satisfying investor obligations. For Nera, surpassing $1 billion in ERV underscores its capacity to manage high-volume, high-impact litigation with robust financial discipline. “This milestone isn’t just about numbers—it validates our model and our mission,” said co-founder and director Aisling Byrne.

The firm’s trajectory has been marked by strategic expansion, including a $75 million new fund, increased institutional support, and the appointment of seasoned finance lawyer James Benson as General Counsel. Nera also reiterated its commitment to supporting claims with measurable damages, strong merits, and potential for positive societal impact.

Siltstone Sues Ex-GC Over ‘Stolen’ Trade Secrets

By John Freund |

A funder-versus-insider fight has erupted in Texas, where Siltstone Capital alleges its former general counsel Manmeet Walia secretly formed a rival vehicle and siphoned opportunities using Siltstone’s confidential materials. The complaint names a would-be investor, Hazoor Select LP, and a new venture, Signal Peak Partners, as pieces of the purported plan.

According to Bloomberg Law, Siltstone contends that Walia set up the competing effort while still employed, diverting deals and leveraging trade secrets. Details on damages and requested relief weren’t immediately available, but the fact pattern reads like a classic private-capital dust-up: restrictive covenants, fiduciary duties, and the hard-to-quantify value of a nascent pipeline in a niche asset class.

The case spotlights the growing institutionalization of litigation finance: the closer the industry looks to mainstream private credit or PE, the more it inherits their playbook of non-competes, IP enforcement, and investor-relations friction.

A decisive ruling could nudge funders toward more standardized employment covenants and trade-secret protocols—especially around deal pipelines and model IP—potentially raising operating costs but lowering leakage risk across the sector.

Burford Backs Kindleworth to Launch Next-Gen Firms

By John Freund |

Burford Capital has taken a strategic step further into firm-side infrastructure, investing in Kindleworth—the operations partner behind a wave of high-performing specialist law firms—in a bid to accelerate launches and scale boutique platforms.

A press release in PR Newswire reports that Kindleworth has helped bring more than 50 firms and offices to market globally, supporting over 1,000 lawyers across strategy, compliance, finance, technology and BD/marketing. The investment is pitched as fuel for “next-generation” firms: elite, focused teams that prefer an outsourced, non-legal backbone to preserve partner time for client work. Recent Kindleworth-supported names include Three Crowns LLP, Northridge Law and Pallas Partners—case studies for how a fit-for-purpose MSO model can enable premium work without BigLaw overhead.

For Burford, the move underscores its foray into law-firm operations, where capital can unlock growth in tech, talent, and pricing innovation without touching the practice of law. It also dovetails with the industry’s growing interest in MSO structures that separate ownership of back-office functions from lawyer-owned entities, sidestepping non-lawyer ownership bans while still injecting outside capital into operations.

If early results show faster time-to-launch, healthier margins, and better cost control for boutiques, expect rivals to explore similar partnerships with legal-ops platforms—or to stand up their own. Open questions remain around governance: how information flows between an MSO partner and a funder, how conflicts are policed, and whether ethics regulators will ask for clearer guardrails as more deals close.

WinJustice Pushes Litigation Finance into LegalTech and SaaS

By John Freund |

Litigation funding may soon be more than a tool for plaintiffs — it’s shaping up to be a cornerstone of growth strategy for tech startups, according to a new thought piece by funder WinJustice.

A recent post on LinkedIn from the firm outlines how litigation funders are expanding their remit to support LegalTech and SaaS companies embroiled in high-stakes litigation over IP, data privacy, and cross-border regulatory issues. As these companies scale, legal exposure often rises faster than revenue, making litigation finance not just a defensive tool, but a growth enabler.

For early- and growth-stage tech firms, litigation costs can cripple cash flow and deter investment. WinJustice argues that non-recourse funding allows companies to protect IP and contractual rights without diverting resources from R&D or expansion. By absorbing litigation costs — and recovering only on success — funders offer startups a financial shield that levels the playing field against larger adversaries.

The piece also explores how LegalTech platforms are feeding value back into the funding ecosystem. AI tools now assist funders with diligence, risk modeling, and portfolio management, creating what WinJustice calls a “two-way synergy” between finance and technology. The UAE, with its dual ecosystems in litigation funding (DIFC and ADGM) and tech innovation, is spotlighted as an ideal hub for this convergence.

The strategic implications stretch across stakeholders: founders get breathing room, legal departments shift from cost centers to value creators, and funders broaden their pipeline while enhancing operational efficiency. As litigation funding migrates from courtrooms to cap tables, WinJustice paints a future where disputes are assets, not liabilities.

LCM Sets October 1 Date for FY25 Results

By John Freund |

Litigation Capital Management (LCM) has set a timetable for its next major disclosure, telling the market it will release audited results for the year ended June 30, 2025, on Wednesday, October 1. The notice gives investors and counterparties a clear marker for updates on realizations, fair-value movements, new commitments, and progress across single-case, portfolio, and claims-acquisition strategies. With funding markets steady and secondary activity picking up, attention will focus on monetizations and cash generation as LCM cycles older matters and deploys into new ones.

An announcement on Investegate dated September 8 confirms the reporting date and recaps LCM’s operating model: direct investments from balance sheet capital alongside third-party fund management, pursuing single-matter funding, portfolio structures, and acquisitions of claims. The company notes it derives revenue both from direct investments and from performance fees on managed capital. The notice also reiterates LCM’s international footprint, with headquarters in Sydney and offices in London, Singapore, and Brisbane, reflecting a pipeline that spans common-law jurisdictions and arbitration hubs.

While the update is procedural, the date sets expectations for details on commitments, deployments, and realizations through fiscal 2025—metrics that typically drive NAV, fee accruals, and liquidity for further commitments. Investors will also look for commentary on case duration, provisioning, and any balance-sheet recycling that can support new originations without dilutive capital raises.

Against a backdrop of competitive pricing and increasingly bespoke structures, LCM’s disclosures should offer a read-through on demand for commercial funding and the cadence of exits across core verticals. If realizations and commitments point in the right direction, expect continued momentum in portfolio-level and acquisition strategies as funders lean into capital-efficient growth.

Burford’s MSO Law-Firm Stakes Draw Critique

By John Freund |

Burford Capital’s proposal to take minority, non-controlling stakes in U.S. law firms via management services organization (MSO) structures has sparked a fresh round of debate over investor involvement in legal practice. The funder frames the plan as a way to provide growth capital while remaining a passive owner outside the practice of law. Critics counter that any move toward outside ownership, even indirectly through MSOs, risks putting investor preferences ahead of client interests and could entangle firms in thorny ethics issues across multiple jurisdictions.

An article in Insurance Journal reports that Burford Chief Development Officer Travis Lenkner said the firm is “pursuing strategic minority investments” and would be a passive investor. The piece canvasses pushback from the Florida Justice Reform Institute and outlines the patchwork of state rules: most jurisdictions still bar nonlawyer ownership; Arizona allows it directly; and a recent Texas ethics opinion signaled that well-structured MSOs can be permissible if they don’t engage in the practice of law or share fees.

Insurance Journal also notes the broader political and regulatory context—more states moving toward disclosure or licensing of funders—while highlighting unresolved questions about how courts and bars might treat MSO-based ownership in practice.

For funders, the proposal—if accepted by regulators and clients—could represent a new pipeline to origination and data, deeper relationships with firms, and adjacencies to traditional case funding. For firms, it dangles capital for tech, talent, and operations without ceding control of fee streams. The near-term test is whether any first-mover deals clear ethics review and demonstrate independence in substance, not just form. If they do, expect a competitive race among funders and private capital to define the template. If not, this episode may reinforce the status quo—and accelerate states’ efforts to spell out guardrails for third-party finance and law-firm ownership models.

Insurers Ease PII Premiums, But Litigation Funders Draw Scrutiny

By John Freund |

Law firms across England and Wales are experiencing a rare reprieve in professional indemnity insurance (PII) costs, with a wave of new market entrants and increased capacity pushing premiums downward for the first time in years.

An article in the Law Gazette reports that firms of all sizes have seen rate reductions—most notably larger firms, where primary layer premiums have dropped by 5%–10%. Mid-sized firms are also benefiting, with typical decreases of 2%–5%, while smaller firms face a more uneven landscape. Brokers attribute the softening market to heightened competition among insurers and a lack of the anticipated post-Covid surge in claims, particularly in conveyancing.

Yet insurers remain cautious. The severity of claims is on the rise, with 20% now pleading losses above £3 million, per Lockton data. Notably, litigation funders are increasingly cited as a key contributor to this trend. Funders’ financial backing, or “war chests,” allow claims to proceed further than before, raising concerns for insurers and heightening law firm liability. Administrators and funders alike are probing legal advice as part of post-insolvency investigations, bringing a new wave of high-value, third-party claims.

In response, insurers are urging firms to reassess their risk profile, invest in excess coverage, and present stronger underwriting narratives. Brokers also report growing interest in regulatory defense cover, as SRA-related claims become more frequent.

Meanwhile, cyber risk and artificial intelligence loom large. Despite rising ransomware attacks and a 77% spike in cyber threats, only 28% of firms carry standalone cyber policies. Insurers are urging firms to adopt multi-factor authentication, conduct risk assessments, and develop AI usage policies to mitigate exposure.

Ex-Therium Team Launches Ninety Mile Capital in Australia

By John Freund |

A new third-party funder has joined Australia’s increasingly competitive class actions market. Ninety Mile Capital, founded in Melbourne by former Therium executives Simon Dluzniak and Louise Hird, will focus on financial services, consumer and environmental claims domestically, while also eyeing opportunities in Singapore-seated arbitration. The launch comes amid continuing portfolio realignments among global funders and sustained claimant appetite for vehicles that can shoulder the cost and risk of complex, multi-year disputes.

An article in CDR News notes that Dluzniak will serve as director and Hird as chief investment officer, following their departures from Therium earlier this year. Their new vehicle signals a back-to-basics thesis in Australia: target well-defined class cohorts and regulatory-driven harms in financial services and consumer protection, where causation and damages models are increasingly standardized and courts are familiar with funded proceedings.

For practitioners and claimants, Ninety Mile Capital’s arrival could widen the field of potential terms on offer. Competition among funders has already tightened pricing and diversified structures; from single-matter to portfolio and even hybrid credit facilities. A new entrant with local experience may also accelerate filings in environmental claims, where granular scientific evidence and regulatory interplay often demand both capital and patience. The international dimension—scouting Singapore—underscores how funders with Australian DNA are increasingly structuring for regional reach, syndication options and enforcement pathways beyond a single jurisdiction.

If Ninety Mile Capital executes on its targeted strategy, expect incremental pressure on incumbents in Australia and more cross-forum coordination with Singapore. The bigger question for the industry: does this signal a new wave of specialist boutiques spinning out of legacy platforms?

Kerberos Named Finalist for 2025 CIO Industry Innovation Awards in Private Credit

By John Freund |

Kerberos Capital Management has been named one of only four finalists nationwide for Chief Investment Officer (CIO) magazine’s 2025 Industry Innovation Awards in the Private Credit category.

Each year, CIO magazine honors organizations that demonstrate “truly exceptional approaches to the challenges of institutional asset ownership and asset management.” This recognition highlights Kerberos’ leadership in private credit and its innovative strategies that continue to set new standards in the institutional investing market.

“We are proud to be recognized among the top firms in the country for our work in private credit,” said Joe Siprut, CEO & CIO of Kerberos Capital Management. “This acknowledgment underscores our team’s commitment to innovation, disciplined risk management, and delivering differentiated value to our investors.”

Kerberos’ inclusion as a finalist reinforces its growing national reputation as a forward-thinking investment manager that thrives on tackling complex challenges, seeking to generate alpha from complexity but not from increased risk.

About Kerberos Capital Management

Kerberos Capital Management is an SEC-registered investment adviser and alternative investment manager, providing creative solutions for those seeking capital in special situations. Kerberos’ flagship private credit strategy emphasizes legal assets and other complex collateral. Kerberos manages both a pooled vehicle and separate accounts for institutional and high net worth investors worldwide.

Litigation Funding Voided: Bankruptcy Court Underscores Need for Court Approval

By John Freund |

Litigation finance has become an increasingly utilized tool to support valuable claims in financially distressed bankruptcies. However, a recent decision from the Northern District of Texas—voiding a $2.3 million litigation funding agreement between a liquidating trustee and a funder—has reignited scrutiny over how these arrangements are structured and approved.

An article on McDonald Hopkins's website emphasizes best practices in the wake of that ruling, urging parties to proactively ensure enforceability of funding agreements. Even when plan documents appear to authorize litigation funding, it’s strongly recommended that parties secure explicit approval from the bankruptcy court. Such approval enhances certainty, mitigates future challenges, and solidifies the funder's standing against all estate stakeholders.

Key recommendations from the advisory include:

  • Prepare for judicial and stakeholder scrutiny. Courts are likely to closely examine the economics and procedural fairness of funding agreements. Demonstrating that terms are fair, reasonable, and beneficial to the estate and creditors is essential.
  • Review existing agreements carefully. Funders and trustees should verify that their authority is clearly established in underlying plan or trust documents and confirm whether the arrangement has been properly disclosed and court‑approved. If not, consider options like negotiating revised terms or seeking court ratification.
  • Maintain transparency and documentation. Keep detailed records of communications, payments, and disclosures. Monitor developments in the case for challenges to funding arrangements.
  • Engage experienced bankruptcy counsel. Legal guidance is critical to respond to objections and navigate the nuanced landscape of litigation finance in reorganization contexts.

This ruling serves as a clear reminder: litigation funding in bankruptcy requires far more than a signed agreement—it demands judicial scrutiny and explicit approval. Stakeholders must prioritize transparency, heavy documentation, and procedural integrity to ensure arrangements are respected.

LCJ Calls Out Legal Funders for Control Provisions in TPLF Contracts

By John Freund |

A new salvo has been fired in the debate over transparency in litigation finance. Lawyers for Civil Justice (LCJ) has submitted a comment letter to the Advisory Committee on Civil Rules exposing what it says are extensive control provisions in third-party litigation funding (TPLF) contracts—contradicting funders’ public assertions of passivity.

A press release from Lawyers for Civil Justice highlights excerpts from nearly a dozen funding agreements, including contracts involving Burford Capital, that purportedly grant funders authority to select counsel, approve or reject settlements, and even continue litigation after the plaintiff exits the case. These “zombie litigation” provisions, LCJ argues, represent de facto control by financiers—despite repeated funder claims that they do not direct litigation strategy.

At stake is a proposed federal rule requiring disclosure of litigation funding agreements in civil cases. LCJ’s letter offers ammunition to supporters of mandatory disclosure, citing examples such as a Burford-Sysco agreement that bars settlement without funder consent, and an International Litigation Partners contract that allows the funder to issue binding instructions to attorneys. In one instance, a funder retained the right to continue litigation in its own name even after the plaintiff had withdrawn—raising red flags over who actually drives case outcomes.

Funders have long argued they are “passive investors” and do not “control legal assets.” But the LCJ analysis directly challenges these claims, suggesting a significant gap between public narrative and contractual reality.

If adopted, a federal disclosure rule would mark a seismic shift in how courts assess conflicts of interest and strategic control in funded litigation. For the legal funding industry, the debate underscores a pivotal question: can funders claim passivity while retaining the contractual tools of influence?

Editor's Note: A previous version of this article referenced Fortress in LCJ's letter. Fortress is only referenced in a single footnote, with no contracts or specific cases mentioned. We regret the error.