A new claim has been brought against International Distribution Services, the owner of Royal Mail, over allegations that it ‘prevented competition for bulk mail delivery services’ which in turn led to end-customers being overcharged for these services. The opt-out claim is being brought on behalf of any customers who purchased bulk mail services since January 2024, with an estimated 290,000 potential class members seeking up to £878 million in compensation for these overcharges.

An article in the Financial Times reveals that the application to bring collective proceedings was filed at the Competition Appeal Tribunal (CAT) on Thursday, with the action being led by the Proposed Class Representative, Robin Aaronson and supported by law firm Lewis Silkin. According to the Bulk Mail Claim website, it has secured £10 million in funding from ‘a specialist litigation funder to bring the claim’ and has ‘put in after the event (ATE) insurance to cover its liability to pay Royal Mail’s costs if the claim is unsuccessful.’

In a press release announcing the filing of the claim, Robin Aaronson said:

“Where there has been an abuse of dominant position, as has occurred in this case, it is important that those suffering loss are able to obtain redress. A collective claim is the only fair and efficient form of redress in this case, given that there are hundreds of thousands of affected customers and it would be commercially unviable for them to bring individual proceedings.”

Andrew Wanambwa, Partner in the Dispute Resolution team at Lewis Silkin, also provided the following comment:

“Royal Mail abused its dominant position, resulting in hundreds of thousands of bulk mail customers being overcharged. The purpose of this claim is to hold Royal Mail accountable for its actions and secure compensation for affected customers.”

Responding to the announcement of the filing, Royal Mail confirmed that it had received the application and said, “We consider [the claim] to be without merit and we will defend it robustly.” The draft Collective Proceedings Order can be read here.

As LFJ covered earlier this week, a recent hearing in the US House Judiciary Committee reignited arguments around the appropriate level of disclosure required when third-party funders are involved in patent lawsuits. Whilst the hearing largely highlighted the arguments in favour of more stringent disclosure requirements, legal professionals and funders are now offering their own differing perspectives on these contentious issues.

An article in IAM looks at last week’s House Judiciary Committee hearing, focusing on the testimonies from witnesses called before the committee and examining the counter-arguments from industry professionals who are opposed to the introduction of excessively broad disclosure rules for litigation funders. As the article explains, the main point of contention around this issue relates to the level of disclosure required, with most third-party funding participants being open to the disclosure of a funder’s identity, but opposed to the disclosure of the financial details of funding agreements.

Erick Robinson, attorney at Spencer Fane, told IAM that mandating disclosure of the particulars of any funding agreement would be incredibly damaging for plaintiffs in patent infringement lawsuits. Robinson argued well-resourced defendants would “run modeling and be able to reverse engineer the budget based on their knowledge of funding agreements”, which would lead to these defendants dragging out the lawsuit to deplete the funder’s budget. Robinson also questioned the justification for providing defendants with this level of detail, claiming that “there's no legitimate reason any defendant should ever get strategic financial information.”

Anup Misra, managing director at Curiam Capital, concurred with Robinson’s arguments and acknowledged that whilst they would be open to allowing a judge to review the funding agreement, “we just wouldn’t want the economics of a funding agreement to be sent to the defence counsel.” Misra went on to question the idea that third-party funding introduces ‘unknown unknowns’ to the court, as it was described by one witness at the hearing. Misra argued that it should be left to the judge in any given case to decide if they require more information around the involvement of funders, suggesting that “if something were to happen during pending litigation, I'm sure those judges would then determine whether they wanted to see a funding agreement.”

An announcement from the Solicitors Regulation Authority (SRA) revealed that its investigation of the Post Office Horizon IT scandal now encompasses ‘20 live investigations into solicitors and law firms who were working on behalf of the Post Office/Royal Mail Group.’ The SRA said that it was releasing this update as a result of ‘the recent significant interest in the Post Office Horizon Scandal and the resumption of hearings at the ongoing statutory public inquiry.’

The SRA said that it was investigating a range of issues related to the actions of the solicitors and these firms including: the management and supervision of cases, the use of expert witnesses, disclosure obligations and the improper application of privilege, and issues with the operation of the Post Office Complaint Review and Mediation Scheme. However, the statement emphasised that ‘this is not an exhaustive list’, and that the investigation would also encompass ‘the conduct of solicitors in relation to their engagement and cooperation with the ongoing public inquiry.’

Paul Philip, chief executive of the SRA, included the following comment in the statement:

“The impact of this miscarriage of justice on so many individuals is tragic. We have live investigations into the actions of lawyers in these cases. Although the range of issues we are investigating is complex, the fundamentals are simple. The public expect solicitors to behave ethically. They must act independently and do the right thing in the interests of justice.

We will take action where we find they have failed to do so. This is vital to protect the public, maintain trust in the profession, and send a clear message that any solicitor behaving unethically should expect serious consequences. We will act as swiftly as we can, but it is important that we get this right. We owe that to everyone impacted in this case and the wider public.”

The SRA’s full statement on the investigation can be read here.

Reporting by Bloomberg Law covers a hearing conducted by the House Judiciary Committee last week, which featured a discussion on the role of third-party litigation funding in US lawsuits. The committee hearing explored several issues raised around third-party funding, including the desire for increased transparency and disclosure of the presence of outside funding, and the alleged national security implications of the use of litigation finance by foreign businesses or state governments.

Darrel Issa, a representative from California, argued that there was a consensus “that in fact more transparency at a base level needs to be there”, and stated that he would begin drafting legislation to address the issue of disclosure in the following days. Bob Goodlatte, the former representative from Virginia, spoke as one of the witnesses at the hearing and focused on the issue of disclosure for foreign entities, highlighting previous reporting from Bloomberg about third-party funding activities undertaken by Russian and Chinese entities.

Taking a more moderate stance on the level of disclosure required, Victoria Sahani, a law professor at Boston University, suggested that the disclosure of individual funding agreements was not necessary as long as the identity of the funder is disclosed. Explaining her position on the issue, Sahana said: “We should be cautious not to shut down this new industry or reduce opportunities for this industry to improve the administration of justice out of fear”.

Donald Kochan, law professor at George Mason University, argued that there is evidence that when disclosure rules are implemented, it does dissuade certain third parties from engaging as third-party funders. Citing the example of Delaware, where Judge Connolly’s 2022 standing order on disclosure was introduced, Kochan stated that a wider implementation of these measures will “deter a lot of behavior because people just don’t want the sunshine on this.”

As LFJ reported earlier this month, the ongoing saga of the control of antitrust lawsuits between Sysco and Burford Capital saw a new development, when a Minnesota court denied the parties request for a substitution of plaintiff. Now, a court in Illinois has handed another blow to Burford as it has denied the funder’s objections to the enforcement of a settlement between Sysco and poultry processing company Pilgrim’s Pride.

An article from Reuters provides an overview of the ruling from Judge Thomas M. Durkin in the United States District Court for the Northern District of Illinois, which granted Pilgrim’s Pride motion to enforce the settlement with Sysco. The enforcement of the settlement in the antitrust lawsuit had been opposed by Burford Capital’s subsidiary Carina Ventures, arguing that a written agreement was necessary and Pilgrim had not “performed any of its obligations under the supposed settlement. 

In his ruling, Judge Durkin found that “neither argument is sufficient to undermine the objective evidence of agreement that is in the record”, citing emails between the parties from August to December 2022 which thereby provided “sufficient objective evidence of an agreement to enforce it.” With regards to Carina’s objection that this court did not have the jurisdiction to enforce the settlements in the claims taking place in Minnesota, stating that “it cannot be that there is no court with jurisdiction to enforce the global settlement.” 

Judge Durkin expanded on this issue of jurisdictions by saying: “This Court exercising jurisdiction to enforce settlement of actions pending in Minnesota will not interfere with the Minnesota proceedings between Pilgrim’s and Carina/Sysco – it will end them.”

Reuters’ article includes a quote from a Burford spokesperson which emphasised the company’s concern “that the court has today opted to enforce a supposed agreement that the parties clearly never viewed as binding.”The full ruling from Judge Durkin can be read here.

The founder of a major legal finance firm has been voted Most Influential CEO 2024 by a leading magazine.

Craig Cornick, CEO of Manchester- based IQuote Limited, was given the accolade by CEO Monthly for his contribution to legal services in the North-West.

Now in its third year, the awards celebrate the extraordinary achievements of the world's most influential CEOs; whose strategic acumen, transformative leadership, and unwavering commitment are recognised.

The awards are judged purely on merit with all winners assessed against multiple criteria, including company performance over a given period of time, experience within the industry, sector or region, previous accolades won, outstanding client testimonials, feedback or recommendations.

Addressing the win, Craig said: “Receiving the Most Influential CEO award is an incredible honour.

“It reflects the heart and soul that every member of IQuote invests in our shared vision.

“This recognition isn't just about leadership, it's about the relationships we've built, the challenges we've overcome, and the shared triumphs that define our journey.”

Since the beginning of his entrepreneurial career, Craig has remained a respected stalwart in the industry as he continues to revolutionise legal finance.

Recently, in a new commitment to encourage entrepreneurial spirit, he has also become a mentor to several young business owners in Manchester.

His decision to give back is rooted in his commitment to nurturing talent and contributing to the growth of Manchester's business community.

Founded in 2016, IQuote Limited specialises in legal asset and opex capital loans, with a primary focus on legal asset investing.

The firm, based in Cardinal House, Manchester, is constantly pushing for inventive solutions and prepared to offer investments to startups in the legal, technology and customer service sectors.

CEO Monthly is part of AI Global Media, an internationally focused B2B digital publishing group founded in 2010.

Craig’s recent win further shows IQuote’s commitment to drive innovation within the legal sector.

He added: “I am immensely proud of the IQuote team and their passion for making a lasting impact.

“Our influence is not just measured in awards but in the positive change we bring to the world and offering better access to justice for thousands of people.

“It serves as a powerful reminder that true influence is built on a foundation of collaboration and a commitment to shaping a better future.

“Thank you to my incredible team for making this achievement possible and once again thank you to CEO Monthly for their recognition. It is truly humbling."

A spokesperson from CEO Monthly Magazine, said: “Craig has demonstrated exceptional leadership and innovation in the legal services sector.

“His consistent focus on leveraging technology to disrupt traditional industries, particularly in litigation funding, highlights his commitment to enhancing access to justice for society's most vulnerable.

“Furthermore, Craig's philanthropic efforts distinguish him as a socially responsible leader. As the leading fundraiser for a Manchester charity event, he rallied thousands of pounds for the CEO Sleepout initiative, raising over £10,000 to combat homelessness.

“In recognition of his transformative leadership, entrepreneurial achievements, and commitment to social responsibility, Craig Cornick is undoubtedly a deserving candidate for this year’s awards.”

Whilst most coverage of third-party legal funding focuses on high profile disputes, from large-scale class actions to complex international arbitration proceedings, the services provided by litigation funders are equally highly valued by those wealthy individuals who may find themselves embroiled in costly legal cases.

The wealth management and luxury lifestyle magazine Spear’s has released its ranking of the best litigation funding providers for high-net-worth (HNW) individuals in the UK, covering those providers who support disputes ranging from divorces to large corporate cases. Spear’s Head of Research, Ian Douglas highlighted that these litigation funders offer HNW couples “the vital financial support they need to access the legal system on an equal footing”, and “can empower clients to secure a fair settlement in an efficient and cost-effective manner.”

The complete list of Spear’s litigation funding index is as follows:

• Katie Alexiou, Level
• Christopher Bogart, Burford Capital
• John Byrne, Therium
• Alex Cooke, Schneider Financial Solutions
• Susan Dunn, Harbour Litigation Funding
• Steven Friel, Woodsford
• Camilla Funari-Sherman, Rhea Family Finance
• Alex Hulbert, Schneider Financial Solutions
• Mark King, Harbour Litigation Funding
• Ellora MacPherson, Harbour Litigation Funding
• Neil Purslow, Therium
• George Williamson, Level

Among these ranked individuals, Spear’s highlighted the following four providers as ‘names to know’: Katie Alexiou (Level), Ellora MacPherson (Harbour), Camilla Funari-Sherman (Rhea Family Finance), and Alex Cooke (Schneider).

Spear’s Research Unit selects and ranks the providers in its index through a combination of detailed market research by interviewing industry participants, soliciting information from candidates for ranking, and employing a proprietary weighted scoring system to evaluate the providers’ practices.

An announcement from Provenio Litigation revealed that the boutique litigation firm has reached £1 billion in litigation instructions only five years after it launched in 2019. The firm, which was founded by a team of senior litigation lawyers from DLA Piper, has grown the business to expand its services across different areas of litigation and into new jurisdictions, backed by partnerships with third-party funders.

Mark Goodwin, founder and managing partner of Provenio, said that despite the difficulties faced by founding the firm shortly before the Covid pandemic, the ability “to attract business litigation instructions with a combined value of £1 billion shows how far we have come over the last five years.” Goodwin noted that this growth means the firm is now involved in cases across Europe, North America, South America, and the Middle East. 

Explaining the success of Provenio’s growth strategy, Goodwin said that this has been achieved “by attracting high value instructions, breaking into new areas of work and growing the business with a number of our high value cases being supported by the leading litigation funders.” The firm has also broadened its services with the launch earlier this year of Optimise, Provenio’s own insolvency litigation financing solution, which offers support to insolvency practitioners pursuing litigation against directors and third parties.

As LFJ reported in October of last year, Milberg London had previously announced that it had secured litigation funding from Bench Walk Advisors to bring a claim against Valve Corporation, one of the world’s largest gaming companies.

An article from CDR covers the news that this claim has now been formally brought against Steam, the games marketplace owned by Valve, over allegations that it breached UK competition law resulting in consumers being overcharged for purchases from the video game distributor. The opt-out claim was filed last week in the Competition Appeal Tribunal by Vicki Shotbolt, founder of the online safety advocacy group Parent Zone, and is being brought on behalf of up to 14 million UK consumers. The total value of the claim is estimated to reach £656 million, with the affected consumers potentially entitled to compensation of £22 to £44 if the claim is successful.

At the heart of the claim being brought against Steam, is the allegation that its use of a ‘price parity’ condition on game developers results in the end-consumer being charged an excessive price on games. This is because price parity prevents developers from selling the title at a lower price through other distributors, which combined with Steam’s 30% commission on all sales means that consumers are forced to pay an inflated price.

Shotbolt says that the claim aims to hold Valve “to account for breaking the law”, arguing that the company must be stopped from “abusing its dominant position to force publishers to sign up to illegal trading terms and tying consumers in and charging excessive prices.” 

Milberg London are acting for the proposed class, with representation by Robert Palmer KC, Julian Gregory and Will Perry of Monckton Chambers. As aforementioned, third-party funding has been secured from Bench Walk Advisors.

Natasha Pearman, partner at Milberg London, describes Valve’s monopolistic behaviour as part of its “stranglehold on the PC gaming market”, and that the Steam platform “has essentially taken away normal competition by introducing this price parity provision, so there’s no ability for real competition to thrive or emerge on alternative distribution channels.” For more information about the opt-out claim, visit the Steam You Owe Us website.

In a post on LinkedIn, JBSL announced the appointment of Jonathan Weitz as Managing Director and Head of JBSL Advisory Services. 

Weitz joins the JBSL team having most recently served for the past three years as a Vice President at Evercore’s financial services advisory group. Weitz’ brings nearly a decade of experience in the financial services industry, including over six years at Keefe, Bruyette and Woods (KBW), where he held the position of Investment Banking Vice President.

In the announcement, JBSL stated that Weitz’s experience and expertise “will be invaluable to our law firm clients, corporate clients and our coinvestors, in all aspects of balance sheet and legal asset maximization.” His role as head of the company’s advisory services will see Weitz lead JBSL’s support for their clients in “identification of dormant legal assets, capital structuring, strategic acquisition/sales of dockets and law firms, and succession planning.”

With the global litigation finance market largely dominated by those long-established funders who have already planted significant footholds in the major jurisdictions, upstart funders must look for creative ways to grow their businesses at home and abroad. This has once again been demonstrated by the announcement of a partnership between two litigation finance companies, one based in California and the other in Dublin. 

An article in Alternative Credit Investor covers the news that Tribeca Capital is establishing a new division focused on antitrust claims, following the agreement of a new funding facility with Nera Capital. The $50 million in capital represents a significant partnership between the two litigation finance companies, with Tribeca looking to fund claims which target anti-competitive and monopolistic activities by corporations.

Aisling Byrne, director at Nera Capital, said that partnering with Tribeca “underscores the dedication of our exceptional team and reaffirms our commitment to making a positive impact globally, through the responsible use of litigation finance.” Byrne explained that this partnership supports the company’s growth plan in the United States, and said that allying with Tribeca “not only strengthens our market position but also aligns perfectly with our core values of innovation and integrity.”

Rory Donadio, founder and chief executive of Tribeca Capital, highlighted that “Commercial litigation funding plays a crucial role in ensuring the smooth progression of legal proceedings by covering essential expenses.” He went on to add that the provision of third-party funding to claimants “serves as a valuable financial tool in facilitating smoother case management and access to justice.”

Professor Andreas Stephan and Geradin Partners have today announced that they have secured funding from litigation funder Innsworth for a UK opt-out competition damages claim on behalf of UK-domiciled third-party sellers against Amazon. The claim, estimated to be worth over £2.5 billion, will focus on multiple anti-competitive practices by Amazon that have harmed UK sellers and will be filed shortly in the Competition Appeal Tribunal, the UK’s specialist competition court. 

Andreas Stephan, a leading competition law scholar and the Head of the University of East Anglia Law School, will bring the damages action on behalf of UK third-party sellers who have used Amazon’s platform. He has retained a team composed of Geradin Partners, Kieron Beal KC (Blackstone Chambers), Daniel Carall-Green and Hannah Bernstein (Fountain Court), and Frontier Economics. 

Amazon’s treatment of third-party sellers has come under significant scrutiny from regulators in the United Kingdom, Italy, the European Union and the United States. These regulators have identified competition concerns in relation to Amazon’s position of dominance, and conduct in the market for the supply of e-commerce marketplace services. In some cases, those regulators have imposed sanctions or required commitments from Amazon to address these concerns. Professor Stephan’s claim would be based on showing loss arising from multiple abuses of a dominant position and therefore will provide a comprehensive opportunity for sellers to obtain full compensation for harm caused by Amazon. Estimated damages are over £2.5 billion. 

Professor Stephan said: “Amazon has engaged in a variety of strategies to grow its e-commerce platform, lock sellers into it, prevent the expansion of rivals, and use that privileged position to exploit sellers that use its platform. I am bringing this litigation to give sellers in the UK the opportunity that they might not otherwise have to be compensated for all those unfair practices.” 

Founding Partner of Geradin Partners, Damien Geradin, said: “Amazon is one of the world’s largest companies. As regulators around the world are increasingly finding, Amazon has abused that position in multiple ways to prevent third-party sellers of all sizes from enjoying the benefits that flow from free and fair online commerce. This claim intends to give sellers the opportunity to seek redress for these anti-competitive practices.”

When looking at legislative and regulatory developments impacting litigation funders, we must commonly look at those measures specifically targeting third-party funding around issues such as disclosure and transparency. However, a proposition being brought forward in Nevada to limit contingency fees is being highlighted as a rule change that may benefit funders who will be able to take advantage of smaller law firms’ need for capital.

Reporting by Legal Newsline looks at a proposed law change in Nevada which would cap lawyer contingency fees at 20%, with legal analysts expressing concerns about the effect this might have on the state’s litigation regime. Proposition 22 has garnered huge support from Uber, with the rideshare company having spent $4 million in lobbying to back the rule change through the Nevadans for Fair Recovery group. However, the measure is seeing equal opposition by the state’s trial lawyers who have formed the campaign group, Uber Sexual Assault Survivors for Legal Accountability.

The article explains that it is Nevada’s business community who are stuck in the middle of this debate, with concerns that this 20% cap could increase the power and influence of third-party litigation funders in the state. Samir Parikh, professor at Lewis & Clark Law School, explained that Proposition 22 could benefit funders who support upstart “hungry law firms” and would need the third-party funding in place of higher returns from contingency fees.

The role of third-party funding in the Post Office case triggered a variety of responses from legal industry professionals and outside observers in the UK, with its utility as a tool for access to justice being weighed against the idea that claimants are not receiving sufficient proportions of compensation compared to funders. A recent panel discussion at a leading industry event has highlighted these competing ideas, and how funding has entered the legal ‘mainstream’ after a sustained period of increasing adoption.

An article by CDR provides a recap of discussions held at the London International Disputes Week (LIDW) conference, offering particular insight into a panel on ‘Emerging Trends and Public Perceptions in Class Actions, Funding and Corporate Accountability’. The panel discussion saw contributions from Tim West, partner at Ashurst, Simon Pugh, partner at Portland Communications, Lorraine Lanceley, partner at Stewarts, and Andrew Mizner, editor at CDR.

The panel explored the growing influence of litigation funding in UK class actions, noting that the increased public profile of third-party funders had attracted mixed reactions from industry participants and the wider public. Pugh suggested that, at the moment, “the public perceives lawyers and funders as the principal beneficiaries of the regime,” and that “the onus has to be on the funders to explain the difference between cost versus profit, and accounting for their risk.”

West concurred with this idea that there was scepticism and concern directed towards funders from those observing the way compensation from class actions has been distributed. On the other hand, Lanceley noted that despite these questions of perception, it is clear that litigation funding has become part of the ‘mainstream’ in UK class actions, and that this is reflected in the number of clients who are proactively looking for funding to support their claims.

An article in Iberian Lawyer covers the announcement of PLA Litigation Funding’s appointment of Alipio Conde Herrero as a director at the company. Before PLA, Conde most recently served as Head of Legal Advisory at Bankinter, where he served for over 17 years and ‘showcased his ability to navigate complex legal matters and provide strategic counsel at the highest level.’

Commenting on the appointment, Jesús Rodrigo Lavilla, CEO of PLA Litigation Funding said: “We are thrilled to welcome Alipio to our team. His extensive experience and industry knowledge will undoubtedly strengthen our organization and further our commitment to providing top-tier legal services to our clients.”

Whilst funders operating in the UK may be waiting until after July 4 to see how the next government will approach the litigation finance industry, this does not seem to have dissuaded the appetite for funding high value class actions being brought in this jurisdiction.

An article in City A.M. covers the announcement of the UK’s ‘biggest ever’ class action case, as Willkie Farr & Gallagher has filed a claim on behalf of the British Independent Retailers Association (BIRA) against Amazon. The claim, which has been filed in the Competition Appeal Tribunal (CAT), focuses on allegations Amazon misused the data of its marketplace’s retailers and manipulated the ‘Amazon Buy Box’ feature for its own financial benefit over the interests of these retailers.

The claim is being funded by Litigation Capital Management, with the total value of the class action estimated to be worth up to £1 billion. Willkie Farr will reportedly be submitting over 1,150 pages of documents to support the allegations being made in the claim.

BIRA’s Chief Executive Andrew Goodacre provided the following statement:

“The filing of the claim today is the first step towards retailers obtaining compensation for what Amazon has done. I am confident that the CAT will authorise the claim to go forward, and I look forward to the opportunity to present the case on behalf of UK retailers. This is a watershed moment for UK retailers, but especially for small independent retailers in this country.”

IMN hosted its 6th annual Financing, Structuring and Investing in Litigation Finance conference in New York City yesterday. The event was well-attended and featured a diverse array of stakeholders, including funders, law firms, investors and corporate counsel. One of the panels covered the topic of General Counsel and their mindsets, attitudes and approach to adopting litigation funding.

The panel was moderated by Martin Gusy (MG), Partner at Bracewell. Panelists included Edward Reilly (ER), Managing Member at McDonald Hopkins, Vincent Montalto (VM), Partner at DLA Piper, and William Derrough (WD), Managing Director at Moelis & Company.

The discussion covered the following topics:

• When and how should corporate general counsel utilize litigation finance?
• Can litigation finance replace corporate legal budgets? Should it?
• How attractive is the monetization of solid cases and arbitration? Is the factoring of legal fees a bad habit to start?
• What are issues large corporations face when using litigation finance? Are there reputational issues? Others?
• Will more disclosure in the market make the use of litigation finance more attractive and viable for public companies?
• How active are corporates in monetizing large claims?

Below are some key takeaways from the discussion:

MG:  Is the GC office looked at as being a profit center, or cost center? Can you make that shift (from cost to profit)?  The benefits can take years to realize, so it’s a challenge to get the GC to think about making an investment for a payout 5 or 6 years down the road. 

VM: GCs do not have the mindset of affirmative recovery. It takes a shift in mindset for in-house counsel to start thinking about pursuing affirmative recovery.  There are too many other important things to do, and limited resources. Funders need to get some wins, and show them it works.  When a portion of the settlement or award goes back to the GC office, then they will begin to shift their mindset towards being more of a profit center.

ER: There is a corporate mindset in the GC office—they are risk averse.  A GC’s job is to avoid all kinds of risk.  It takes a lot to get a GC to think outside the box.  If you look at the Buford surveys, finance guys always have an interest in litigation funding, until they look at cost of capital and think ‘I can do better than that.’  They don’t want to take the risk on the case, and even if they win, pay off a huge percentage. So it will take a lot to change their mindsets.

WD: We've been working on a case for 7-8 years.  The CFO or CEO can easily decide to stop spending money on this at any time.  So duration risk is a real risk. That said, we think it almost always makes sense, even with higher cost of capital. Take any WACC, and it is almost always recourse. Litigation funding is non-recourse. So that is a great selling point tot he CFO.

Also, the number of players out there has probably doubled in last 5 or 6 years, so when we run a process, we can get interesting participation, not cookie cutter proposals. Some want to be in New York state court, some don’t.  Different jurisdictions are favored. So you can find the funder that works best for you.  

And remember, the perception of an asset class can change over time. There was a time when asset-based financing was a dirty word.  Nobody at the bank did any loan-to-value work. If you needed extra money, you went to asset-based lenders. All of those funders have been bought out by banks.  Now ABS is a massive market.  We have to get past people’s natural responses… showing people IRR, examples of successful litigation.  This will help change minds.

MG: Disclosure is a topic we should consider. By show of hands:  How many of you have dealt with cases where you had to disclose the identity of a funder?

(very few hands are raised).

How many of you had to disclose the entirety of a funding agreement?

(a few more hands, but not many).

VM: There are some GCs who would take offense if a funder takes an adverse position to them in a case.  If they find out funder X is funding a case against them, they might write off that funder forever.  I’ve had that happen to clients. This brings up part of the risk of disclosure, for funders. There is still an emotional response from GCs around this. 

If the industry spoke in one voice, that would be a lot easier for corporates.  Some funders are in favor of disclosure of a funding agreement.  Others say absolutely no disclosure, period.   We can all agree, disclosure of a funding agreement In its entirety has work product and other issues—everyone in the industry should agree on that.  So that can be a starting point. The industry needs to speak in one voice on this, so GCs can better wrap their heads around the issue. 

Whilst the UK government has demonstrated support for the litigation finance industry through its legislation, state governments within the US continue to indicate a growing preference for tighter rules and increased oversight around the use of third-party funding.

An article in Bloomberg Law covers the progression of SB355 through the Louisiana legislature, as it received unanimous approval from the state Senate last week and will now be sent to Governor Jeff Landry to be signed into law. SB355 requires any foreign litigation funder involved in a civil action in Louisiana to disclose its details to the state’s attorney general (AG), and to provide the AG with a copy of the funding agreement. The bill would also prohibit funders from controlling the legal action in any way and also prohibits them from being ‘assigned rights in a civil action for which the litigation funder has provided funding’.

State Senator Jeremy Stine, the legislator who introduced SB355, said that the bill will ensure that “Hostile foreign nations and sovereign wealth funds associated with hostile governments will no longer interfere in our justice system.” 

Bloomberg’s reporting notes that whilst Gov. Landry has not publicly stated whether he will sign SB355, a similar bill was vetoed by his predecessor John Bel Edwards when it was sent to the governor’s desk last year.As LFJ reported last month, SB355 is one of two pieces of draft legislation concerning third-party funding in Louisiana, with HB336 introducing additional disclosure requirements for funders involved in civil actions.

As LFJ reported in March, attempts made by Burford Capital, and its subsidiary Carina Ventures, to replace Sysco as the plaintiff in its antitrust lawsuits had achieved some success, with an Illinois court ruling in favour of their Joint Motions for Substitution of Plaintiff. However, the parties have now faced another setback as a Minnesota court has affirmed a prior ruling from a magistrate judge that denied their request.

Reporting from Reuters provides an update on the Burford-Sysco story, as a judge in the US District Court for the District of Minnesota ruled that Sysco should remain as the plaintiff in the antitrust lawsuits that Burford Capital funded. District Judge John R. Tunheim concurred with the February ruling by U.S. Magistrate Judge John Docherty, saying that there was no evidence to show that the “decision to deny the Joint Motions for Substitution of Plaintiff was clearly erroneous, especially considering the unique facts of this case.” 

Judge Tunheim’s ruling follows on from Judge Docherty’s February ruling, which found that Burford could not be named as the plaintiff in the antitrust lawsuits, as it did not have an interest in the case beyond its financial investment in the litigation. In the ruling, Judge Tunheim rejected arguments brought by Burford and Sysco that the Magistrate Judge had erred in his judgement, both on the grounds that it contravened Federal Rule of Civil Procedure 25(c) and that public policies cited by Judge Docherty actually favoured the motion for substitution.

Judge Tunheim went on to say that “Sysco and Burford’s conduct is precisely the kind of conduct of which courts are wary”, and that their motion for substitution of plaintiff “directly resulted from their attempt to resolve the dispute over whether Sysco or Burford should control this litigation.” According to Reuters, Burford is now reviewing Judge Tunheim’s decision, whilst Sysco declined to provide a comment.Judge Tunheim’s full ruling can be read here.

There have been few funded disputes that have reached the worldwide footprint of the Malaysia Sulu case, with arbitration and enforcement proceedings, criminal charges, and a significant geo-political fallout all taking place across Spain, Malaysia, France, Luxembourg, and the Netherlands. In a dispute that has now been ongoing since 2017, we do not appear to be approaching the finish line in the back-and-forth conflict between the core parties.

Reporting by Bloomberg Law covers the latest development in the ongoing saga of the Sulu dispute as Petronas Azerbaijan, an energy company owned by the Malaysian state, is now accusing Therium Capital Management of impropriety in its funding of the Sulu heirs’ case. The company has applied to the United States District Court, Southern District of New York, for an order to “conduct discovery for use in foreign proceedings” and to serve Therium with subpoenas for documents and communications that relate to the funder’s attempts to seize Petronas’ assets in Luxembourg.

Petronas’ Application for Order has its basis in the $14.9 arbitration award issued by Spanish arbitrator Gonzalo Stampa, who was later found guilty of contempt of court for improperly filing enforcement actions and ignoring orders from the Madrid High Court of Justice. Petronas said that they intended to “seek disclosure from various entities acting as custodians of records that could be relevant to its proposed civil and criminal actions against Mr. Stampa, the Funder, the Sulu Claimants, and the Sulu Claimants’ attorneys.”

Explaining the need for the disclosure of these materials, Petronas’ application stated that they “reasonably believe that the Therium Group used one or more of them to facilitate payments to Mr. Stampa”. The application goes on to say that the funder, arbitrator, the claimants and their attorneys, “collectively and/or individually knowingly and intentionally supported Mr. Stampa’s unlawful actions.” Petronas’ explained that this discovery “is for use in contemplated proceedings before a foreign tribunal”, with Spain and Luxembourg mentioned as two jurisdictions where Petronas is considering bringing claims against the aforementioned parties.The full Application for Order can be read here.

As LFJ recently reported, the surprise announcement of the UK general election being held on 4 July has had unforeseen consequences for the litigation finance industry, with the government’s efforts to reverse the effects of the Supreme Court’s PACCAR decision appearing to have stalled.

An article in City A.M. covers the reaction of law firms and litigation funders to the news that the Prime Minister’s election announcement would mean that the Litigation Funding Agreements (Enforceability) Bill will not move forward at present. 

The collective feeling among industry professionals appears to show widespread dissatisfaction following the encouraging progress that the bill had already made, with Martyn Day, co-president of the Collective Redress Lawyers Association describing the development as “disappointing news”. In particular, Day highlighted that the election had undermined the work that had gone into the bill and the momentum it had gained, saying that the certainty the bill provided to funders “is now lost for at least some months while the political future of the country is decided”.

Mohsin Patel, co-founder and director at Factor Risk Management, offered substantive commentary on the issue and called this roadblock in the bill’s progress “frustrating for many, particularly given the relatively swift manner in which the government had sought to rectify its position on litigation funding.” However, Patel remained optimistic that legislation to solve this issue would still be passed even if there is a change in government following the election, highlighting the “non-partisan nature of the bill, and the groundswell in public opinion in support of the funding industry following the Post Office scandal”.

Litigation Capital Management’s CEO, Patrick Moloney appeared to share this viewpoint and suggested that “if there is a change of government one might have thought a Labour led government would be equally focused on access to justice thus allowing the passing of the Bill.”

Julian Chamberlayne, partner at Stewarts, explained that on a procedural level this is the end of the road for the current version of the draft legislation, due to the fact that “A Bill cannot be carried over from one Parliament to the next.” Chamberlayne went on to say that “whether it can be introduced in the same form, and whether it will be in the Lords or House of Commons, will depend on who forms the next Government.”

The use of third-party funding in patent infringement lawsuits has not dominated the headlines in 2024 when compared to previous years, with debates over the disclosure of funding agreements waning amid various instances of state legislatures introducing new rules. However, a high profile patent infringement claim brought against Samsung has come to an end, after the court found that the claimant had improperly obtained and shared confidential information with their lawyers and funder.

An article in ICLG covers a significant development in Staton Techiya and Synergy IP v Samsung Electronics where District Judge Rodney Gilstrap has dismissed the case against Samsung and described the claimant’s behaviour as “dishonest, unfair, and repugnant to the rule of law”. Judge Gilstrap’s ruling found that the claimant, Ahn Seung-ho, had obtained confidential information from Samsung and then shared it with other parties for their own gain in the lawsuit.

The court’s judgement explained that Ahn and Cho Sungil, a patent attorney formerly employed by Samsung, had shared internal status reports with Techiya’s patent lawyers and with the claimant’s funder, PurpleVine IP. In his ruling, Judge Gilstrap stated that the misappropriation and dissemination of these materials was particularly egregious, as they “were critical documents that could determine the outcome of the litigation because they contained Samsung’s strategy regarding the Techiya litigation”. 

Furthermore, the court highlighted that there had been evidence of more wrongdoing by Ahn and his associates, including evidence of perjury, attempts to destroy evidence, and violations of discovery rules. Judge Gilstrap concluded that the “evidence presented by the parties at the bench trial demonstrates subversion of our adversarial system of litigation and an invasion of the attorney-client privilege”. As a result, the court ordered that the conduct exhibited by Ahn, and other individuals working with him, be reported to ethics committees in both California and New York.