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Commercial

Aristata Capital Talks Impact Litigation Funding

As pressure grows from all corners of society for companies to have a greater focus on their social and environmental impact, investors are facing the very same pressures to address their ESG agenda. For litigation funders, there is a unique opportunity to drive both immediate and long-term change by supporting legal actions that can hold companies and institutions accountable for their wrongdoing or inaction. A recent Moral Money feature from the Financial Times explores the world of impact litigation funding, putting the spotlight on Aristata Capital and speaking with Aristata’s founder and CEO, Rob Ryan. As LFJ reported last month, Aristata recently announced the closing of its impact litigation fund (ALIF I), having secured almost $52 million in capital for the new fund. Speaking with the FT, Ryan highlights that Aristata is differentiating itself from the wider litigation finance market with its dedicated focus on lawsuits that can achieve meaningful social and environmental impacts. Explaining the funder’s approach to achieving social change through litigation financing, Ryan said that “At some point, there’s going to be that tipping point where companies say, ‘it’d be better to change our operating behaviour than face this increasing risk of successful litigation’.” Aristata has reportedly already confirmed financing for five separate claims, which include legal actions representing indigenous communities in the south Pacific, underpaid workers in Australia, and a community in south-east Asia who faced human rights abuses from a corporation.
Consumer

The Alliance for Responsible Consumer Legal Funding (ARC) Statement Regarding the Minnesota Supreme Court Decision Maslowski v. Prospect Funding Partners, LLC, et al. v. James Schwebel, Esq., et al.

A21-1338        Pamela Maslowski, Respondent, vs. Prospect Funding Partners LLC, et al., Appellants, vs. James Schwebel, Esq, et al., Respondents. Court of Appeals: 1.         A repurchase rate in a litigation financing agreement is not subject to Minnesota’s usury law, Minn. Stat. § 334.01 (2022), when repayment of the purchase price is contingent upon a recovery in the underlying litigation. 2.         Remand to the district court is appropriate to address plaintiff’s challenge to the repurchase rate under the common-law doctrine of unconscionability. 3.         The repurchase rate specified in the litigation financing agreement began to accrue after the agreement was signed, not after our abolition of the former common-law prohibition on champerty. Reversed and remanded. Justice Anne. K. McKeig. Concurring, Justice Gordon L. Moore, III, Justice Natalie E. Hudson, and Justice Margaret H. Chutich.

“We are very pleased that the Minnesota Supreme Court took its time in rendering a thoughtful decision in this matter and, once again, held that the consumer legal funding contract at issue was enforceable. The decision is consistent with what courts and legislatures have said across the country, that this product is not a loan and should not be treated as such,” stated Eric Schuller, President of the Alliance for Responsible Consumer Legal Funding.

“Following the Court’s logic in its June 2020 opinion that the transaction did not violate the common law prohibition on champerty, the Court today correctly recognized that, “A repurchase rate in a litigation financing agreement is not subject to Minnesota’s usury law” This well-reasoned decision joins others across the country in the growing consensus that consumer legal funding transactions are not loans and should not be treated like loans.”

About ARC 

The Alliance for Responsible Consumer Legal Funding (ARC) is a coalition established to preserve legal funding as a choice for the many Americans who have suffered an unexpected economic loss due to an accident and have a pending legal claim. Legal funding can help families pay for immediate personal needs such as rent, mortgages, car repairs, utilities and groceries while they wait for their claims to settle fairly. ARC trade association promotes practices and regulations that lead to informed decisions between individuals and their attorneys, so families have more options—not fewer.

Eric Schuller

President

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Case Developments Commercial

Woodsford-Funded Class Action Against Ardent Leisure Reaches $26M Settlement

The power of litigation funding to drive successful outcomes for shareholder-led class action claims has once again been demonstrated, as a Woodsford-funded action has achieved a settlement with one of Australia’s largest leisure companies.  Reporting by Business News Australia reveals that Ardent Leisure, the Australian leisure company which owns and operates the Dreamworld theme park, has settled a shareholder class action for $26 million. The class action, which began in June 2020, alleged that Ardent had misled its shareholders over safety measures at Dreamworld in the lead-up to the 2016 Thunder River Rapids Ride accident which led to the deaths of four people.  The class action was run by Piper Alderman and received funding from Woodsford, with the claim also including allegations that this misleading conduct had led to an artificial inflation of Ardent’s share price between June 2014 and October 2016. The final settlement accounts for roughly 10 per cent of the $260 million that shareholders lost in the aftermath of the tragic incident in 2016. In a statement regarding the settlement, Ardent explained that the company’s board “determined that the commercial decision to settle the shareholder class action that had been ongoing for over three years was one made in the best interests of the company and its shareholders.” Of the $26 million settlement, Ardent will only register $4 million of that amount as an expense, with the remaining balance of the settlement being fully insured.
Commercial Deals

Funders See Increasing Opportunities in Bankruptcy Litigation

As the global economy continues to struggle to stabilize, corporate finances are constantly under stress and the volume of corporate defaults is rising. Whilst this obviously represents a worrying trend, it has also created opportunities for litigation funders who have recognized an opportunity to make significant returns by investing in bankruptcy litigation. An article from The Wall Street Journal and shared on MSN, details the rise in recent years of third-party funders’ involvement in bankruptcy lawsuits, with both companies and their creditors looking to make a quick financial return for selling the rights to disputes in bankruptcy court. Ken Epstein, investment manager and legal counsel at Omni Bridgeway, highlights that funders are “seeing a recognition of litigation assets as another source of value for companies and their unsecured creditors in a more robust way than we have in the past.”  The article notes an increase in bankruptcy litigation funding by some of the leading funders, including Burford Capital, whose first engagement with bankruptcy cases dates back to 2010. Since then, Burford has been involved in many claims involving bankrupt companies including the Magnesium Corp. of America claim in 2015 and the ongoing Petersen Energia Inversora claim against the Argentine government. Chris Bogart, chief executive of Burford, explained that the funder is seeing more growth in this sector and is “being asked to look at more cases than we have in the last couple of years.” However, WSJ’s reporting also shows that these bankruptcy lawsuits are not without complications or disputes between investors, lenders and funders. The article highlights the example of Benefit Street Partners’ financing of a lawsuit on behalf of unsecured bondholders of Sanchez Energy. Rival investors, including the established funder Lake Whillans Capital, are now challenging the litigation loan and arguing that ‘a court-appointed creditor representative signed away too much of the lawsuit’s value.’
Commercial

Omni Bridgeway’s Matsui Talks ‘Exponential Demand for Dispute Finance’ in Asia

As the litigation funding industry becomes an increasingly mature and established investment market within the American and European regions, competition between funders will naturally push them to look for the next most-promising jurisdictions. Of all the potential growth regions, Asia’s position as a rapidly expanding economic powerhouse means that funders are keen to establish strong foundations for what they hope will be a plentiful litigation finance market in the coming years. In a recent interview conducted by Star Anise, Eloise Matsui, investment manager at Omni Bridgeway in Hong Kong, provides an overview of the current trends in the Asian litigation finance market and offers insights into Omni Bridgeway’s approach to this region. Matsui highlights Singapore and Hong Kong as two jurisdictions with potential for substantial growth, with both having “permitted funding of international arbitrations and insolvency litigation.” Outside of these two key jurisdictions, Matsui notes that most other Asian countries “are civil law jurisdictions where litigation funding is not restricted”, and that the region’s potential market size is huge, given the rapid pace of economic growth across many states. In particular, she suggests that the amount of inbound investment into Asia will naturally “give rise to high-value commercial cross-border disputes and, in turn, exponential demand for dispute finance.” In terms of Omni Bridgeway’s specific areas of focus, Matsui highlights India and South Korea as two jurisdictions of interest, with the funder “already working with substantial local businesses to resolve disputes on the international stage.” She also argues that litigation finance is becoming “increasingly mainstream as a cost and risk mitigation option” within Asia, and that Omni Bridgeway is “seeing increasing applications for funding and funded cases.”
Announcements Consumer

THE AMERICAN LEGAL FINANCE ASSOCIATION COMMENDS MINNESOTA SUPREME COURT DECISION ON CONSUMER LITIGATION FUNDING

The Minnesota Supreme Court took a significant step to ensuring equal access to justice with their decision in Maslowski vs. Prospect Funding Partners LLC. yesterday, overturning the trial court and Court of Appeals holding and ruling unanimously that Consumer Litigation Funding is not subject to usury law as there is no absolute requirement to repay. In their decision, reversing the trial court and Court of Appeals, the Minnesota Supreme Court ruled that the repurchase rate in Prospect’s agreement was not subject to Minnesota’s usury statute. The American Legal Finance Association (ALFA) filed the only amicus curiae brief in this case on behalf of the interest of their members.

“The Minnesota Supreme Court’s ruling in Maslowski vs. Prospect Funding Partners LLC. again made clear Consumer Legal Funding is not subject to usury laws and recognized the fundamental differences between Consumer Legal Funding and a loan,” said Jack Kelly, ALFA Managing Director. “The decision closely follows ALFA’s primary presentation in its amicus curiae brief to the court on the matter and stands as a testament to the importance of Consumer Legal Funding, backing individuals in their pursuit of justice while promoting fairness and equity. We commend the Minnesota Supreme Court for recognizing the merits of ALFA’s argument. Empowering consumers through legal funding is core to ALFA’s mission. We will continue to advocate for fair regulations, ensuring access to justice without jeopardizing financial stability."

In its decision, the Minnesota Supreme Court unanimously reversed the Minnesota trial and Court of Appeals and held that the repurchase rate in Prospect’s agreement was not subject to Minnesota’s usury statute. The Court based its decision on the fact that there was no absolute obligation of repayment in Prospect’s contract. This was ALFA’s primary argument in its amicus curiae brief and the Court’s opinion closely follows ALFA’s argument. Consumer Litigation Funding contracts do not have an absolute requirement of repayment and do not require repayment if the case does not result in a monetary award.

The key section of the opinion states, “In the current case, the trial court and Court of Appeals rejected Prospect’s argument that the obligation of repayment was not absolute, reasoning that Prospect’s underwriting process seeks to ensure that the parties they contract with will win their underlying case. But something being extremely likely to happen necessarily accepts the possibility, however small, that it may not happen. It simply cannot be said that Prospect’s ability to recover the money given to Maslowski is absolute.”

Brian Montgomery, David Oliwenstein, and Eugenie Dubin of Pillsbury Winthrop Shaw Pittman LLP represented the American Legal Finance Association in their amicus curiae brief.

About American Legal Finance Association (ALFA): ALFA represents the leading consumer legal funding companies across the country. The organization supports sensible regulation in the industry that protects consumers through increased transparency while ensuring access to consumer legal funding. Learn more at https://www.americanlegalfin.com/.

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Announcements Commercial

Omni Bridgeway achieves significant growth in key drivers

Omni Bridgeway Limited (ASX: OBL) (Omni Bridgeway, OBL, Group) has today released its results for the 12 months ended 30 June 2023 (FY23, Year). Managing Director and Chief Executive Officer, Andrew Saker, said “I am pleased to announce notable achievements during FY23 and report on a strong finish to the year, underpinned by gathering market momentum and the effectiveness of our diversified funds management strategy.” The Group reported a substantial ~200% turnaround in the second half compared to the first half and is backed by a strong capital position of over $360 million in cash and receivables,” added Mr Saker. Key highlights of FY23:
  • Increased potential future income by achieving a record level of commitments amounting to $544.2m up 17%.
  • The estimated portfolio value (EPV) grew by 12% to reach $30.5 billion, after completions, removal of impaired investments now completed, and disposals, and achieved a 34% CAGR (four years to 30 June 2023).
  • Grew implied embedded value (IEV) by 9% to $3.9 billion, with $1.0 billion provisionally attributable to OBL, excluding estimated management fees and potential performance fees.
  • Delivered a strong second half result with 203% NPAT turnaround of $61.1m from the first half, reflecting improved income, lower expenses and signalling momentum heading into FY24.
  • We have delivered total gross income and revenue to a record level of $330.0 million, up 51% on last year, derived from diversified sources comprising both completions of investments and secondary market sales. 
  • Increased litigation proceeds by 30% to $283.4m comprising $235.7m investment completions and $47.7m cash proceeds from the sale of a participation in Fund 1 assets.
  • Achieved 9% cost savings in 2H23 reflecting non-recurring items and initial savings from expense optimisation with a continued focus on cost efficiencies into FY24.
  • Upsizing of Funds 4 and 5 are progressing well with ~US$400m to US$600m first close from existing investors expected in 1H24, followed by a potential second close with new investors.
  • Build out of platform is now substantially complete readying our business for anticipated future growth.
  • Achieved geographic expansion in the northern hemisphere with new locations in the United States, France and Italy, maintaining both our competitive advantage and industry leadership.
  • Made executive leadership appointments including a Global Chief Financial Officer, a Co-Chief Investment Officer of EMEA and a Global Head of People and Culture.
The remainder of the FY23 Results Summary can be accessed here.
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Announcements Consumer

Legal-Bay Pre-Settlement Funding Reports Johnson & Johnson’s Latest Attempt at Bankruptcy has Failed

Legal-Bay, The Pre Settlement Funding Company, announced today that Johnson & Johnson's efforts to put a hold on the numerous lawsuits they are facing by filing bankruptcy have failed. Judge Kaplan ruled that the filing did not meet the requirements to qualify as a "good-faith" bankruptcy attempt, and was merely a way to seek protections against the billions of dollars the pharmaceutical giant will be expected to pay out in damages. The Johnson & Johnson cases are on track to rank among the largest mass tort settlements in U.S. history. Over 60,000 lawsuits have been brought by plaintiffs who allege that their talc-based baby powder is directly responsible for causing their ovarian cancer and/or mesothelioma, and point out that the company has long been aware of the health risks associated with their product. Several studies dating back to the 1970s concluded that talc particles increase a person's chances of developing serious medical issues, and evidence suggests that J&J has been intentionally concealing the results for decades. However, despite their $8.9 billion settlement offer, J&J continues to stand by the safety of their product.  Chris Janish, CEO of Legal-Bay, commented, "The Judge's ruling in respect to the bankruptcy strategy by J&J seems to be fair for the plaintiffs. However, now the parties need to come back to the drawing board to work on a realistic settlement framework. With the quantity of claims and seriousness of the injuries there is likely to be a large gap—which will only drag things well into 2024. We are hopeful that at some point, both sides will come to a reasonable resolution so the people suffering can receive some funds in near future."  If you require an immediate cash advance lawsuit loan from your anticipated Johnson & Johnson talc baby powder lawsuit settlement, please visit the company's website HERE or call 877.571.0405 Legal-Bay's sources close to the litigation believe that the parties will try to reach a global agreement by year's end. However, payments could be delayed for another two years due to the sheer number of claims to process. Legal-Bay is one of the few legal funding companies who are providing some financial relief to victims and their families with risk-free, non-recourse cash advance settlement loans.
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Commercial Fundraising

LitFin Announces Establishment of New Fund

In a post on LinkedIn, Ondřej Tyleček, partner at LitFin, announced that the European funder has established a new fund: LitFin SICAV a.s. Tyleček explained that the launch of the new fund was the result of many months of work alongside managing partner Maros Kravec, with the aim of establishing a fund that will bring “a wider range of qualified investors the opportunity to participate in as well as benefit from the litigation finance asset class”.  Tyleček further explained that LitFin worked with Wood & Company, an investment bank also based in Prague, to help LitFin pursue its strategy for continued growth and further success both in the CEE region and across Europe. He also thanked Miroslav Nosal, Dominik Fries and David Kubon of KLB Legal, for their “guidance through the process of fund establishment.” Those interested in working with LitFin can contact the funder at: info@litfin.cz
Commercial Legal Innovation

Insights on Litigation Funding in Australia from Hartwell Funds

There is no doubt that the litigation funding industry is largely dominated by established global funders whose years of experience and vast reserves of capital allow them to take on the largest and highest value cases. However, it is always important to understand the perspectives of new and growing funders who are finding solid returns for their investors in local or regional markets. On a new episode of Talk Ya Book from Ticker News, John Poynton and Aaron McDonald of Hartwell Funds discuss the intricacies of litigation funding in Australia, explaining their company’s approach as one of the emerging funders in the market. Discussing Hartwell’s investment strategy, McDonald reinforced the value of being prepared for all outcomes, explaining that “97 per cent of the time cases are resolved by consensus, and 3 per cent of the time cases go to trial, so we’re certainly targeting the 97 per cent not the 3 per cent, but you need to make the investment as if you are one of the 3 per cent.” Discussing the impact of litigation funding on cases, Poynton highlighted how “it’s interesting to see how quickly things move to settlement because of the existence of the funder”, as defendants swiftly realise they can’t bet on a plaintiff lacking the funds to see the case through to completion. McDonald further emphasised this “psychological benefit” of funder involvement, stating that defendants understand that “there’s no way that the case is going to capitulate, it’s either going to go to trial or it’s going to settle.” Explaining how the funder pitches opportunities to investors, McDonald acknowledged that there was an aspect of litigation funding that is speculative, but if “you’re measuring the risk and the prospects of the case carefully, getting independent advice about it, you can invest your money wisely in this sector and do well.” He also discussed the key aspects that Hartwell looks for in prospective cases, highlighting that the cases they have been most confident in are those where “the lawyers have come to us and said, ‘here’s a written opinion from a Silk who says that the case is viable’, that really underwrites the investment.” However, both Poynton and McDonald acknowledge that there is a lack of visibility and transparency for third-party funding in cases, and that defendants rarely know when litigation funders are involved in a case. McDonald notes that this is not always true as some courts require lawyers to disclose the presence of third-party funding, and that “those obligations of disclosure are becoming far greater.”
Commercial Deals

CASL Funds Class Action Against Qantas Over Covid Travel Credits

As many industry leaders and commentators have predicted, we are increasingly seeing new litigation being brought to address institutional or corporate wrongdoing during the Covid-19 pandemic. In addition to the recent class actions brought against UK universities for their pandemic policies, this week, a new lawsuit was brought against a major airline for alleged anti-consumer behavior during the pandemic. An article in The Guardian summarizes the recently announced class action that is being brought against Qantas over its use of travel credits to refund customers for cancelled flights during the pandemic. The class action, which is being brought by Echo Law and funded by CASL, alleges that the airline “breached its contracts with customers by failing to provide cash refunds for cancelled flights” and “engaged in misleading or deceptive conduct in contravention of the Australian Consumer Law”.  Andrew Paull, partner at Echo Law, stated that the travel credits policy allowed Qantas to “take advantage of its own customers and effectively treat them as providers of over $1 billion in interest-free loans”. Paull also highlighted that since the pandemic, customers have been pressured to ‘use or lose’ their travel credits, and as a result, have unjustifiably ended up spending more money than they did on their original flight bookings.  In response to the class action, Qantas has released a statement rejecting the allegations and defending its travel credits policy. The airline argues that the credits policy has already delivered “well in excess of $1bn in refunds”, and in an effort to give customers more flexibility it has “extended the expiry dates three times.”  On its website, Echo Law sets out the recovery aims of the class action: “In addition to seeking refunds of any outstanding amounts due to Qantas customers, and compensation representing the difference between the ‘value’ of the credits issued to customers as compared to a cash refund, the claim seeks to recover an award for interest and for consequential losses - for example, compensation for ‘loss of use of money’, which recognizes the impact on customers who were deprived of a significant sum of money for a lengthy period of time.”
Commercial Deals

Opportunities and Challenges for ESG Litigation Financing

It has become increasingly common to hear discussions around the utility of litigation financing for ESG litigation, with funders keen to take advantage of new opportunities whilst also positioning themselves as impact investors with a positive agenda. However, it is important to note that whilst ESG and climate-related litigation is on the rise, there are as many challenges as opportunities for those looking to finance these lawsuits. In a guest article for private banking magazine, Patrick Rode, senior legal counsel at Deminor, discusses the opportunities and challenges arising from the use of litigation financing for climate and ESG litigation. Rode highlights that funders are seeing increasing demand from consumer and environmental protection groups, as well as activist investors, who are keen to engage in climate-focused litigation, but are reliant on third-party funders for the capital to bring these lawsuits. Rode highlights that ESG litigation has developed over the last decade, with the target of these lawsuits expanding from a focus on state actors to now including companies who are failing to meet their ESG commitments or regulatory standards. However, Rode notes that broader climate lawsuits often don’t make sense for litigation funders as the current legal system, in countries like Germany, has not favoured plaintiffs, and therefore the chance of success and a solid financial return for investors is often low. Rode explains that financing can make sense in situations where the plaintiff has either suffered actual damage or in cases where compensation can be easily calculated, particularly in cases where the plaintiff is in a dispute with a larger and better resourced opponent. He also highlights that the prospects for ESG litigation may improve over time, given that many countries are seeing legislative proposals to restrict greenwashing and to enhance environmental organizations’ avenues to bring lawsuits.
Commercial People Moves

LCM Announces Appointment of Niall Hanna as Investment Manager

In a post on LinkedIn, Litigation Capital Management (LCM) announced the appointment of Niall Hanna, who has joined the funder’s Singapore office as an Investment Manager.  Hanna brings a wealth of experience to LCM, having joined from Walkers in the Cayman Islands, where he served as a Partner specialising in insolvency litigation and dispute resolution. LCM stated that Hanna’s career has given him “a lot of exposure to situations where litigation financing has made, or would make, the difference between unlocking value for stakeholders and abandoning valuable assets.” In his own LinkedIn post announcing the move, Hanna stated: “After fifteen great years as an Insolvency & Dispute Resolution attorney for Eversheds Sutherland and Walkers, where I was privileged to work alongside brilliant people every day, I am pleased to be using my knowledge and experience for new challenges and I am excited to be part of an impressive team working in a growing space. I am looking forward to meeting new people in the APAC region and to working alongside former clients, colleagues and counterparts.”
Announcements Consumer

Legal-Bay Pre Settlement Funding Company Reports Increase in Lawsuit Funding Requests During Back to School Season

Legal-Bay, the Pre-Settlement Funding Company, announced an uptick in applications for settlement funding now that back-to-school season has begun. Now that summer is over and kids are heading back to school, many parents of college-aged children are faced with the added costs of tuition payments, textbooks, and travel expenses to-and-from campus, not to mention meals and housing once they get there. Even parents of younger kids are dealing with extra expenses: New clothes, backpacks, school supplies, plus the rising costs of extracurricular activities. And parents of kids pre-K and under? Yikes. Daycare rates are out of control. Even before-care or after-care prices for elementary school-aged children are enough to put a dent in anyone's pocketbook. Thankfully, loans on lawsuit settlements are an option for people who need cash now. Legal-Bay understands that money is tight heading into this time of year, and encourages people to investigate what loans for settlements can do. They've helped plaintiffs in active lawsuits across the country with their settlement loan needs, from California to Florida and back again. Whether your kids need money for a box of crayons in their kindergarten classroom or textbooks for their university on the other side of the country, lawsuit loan funds can help. Chris Janish, CEO of Legal-Bay, says, "Although it's still summer for those in the northeast, warmer states in the south like Arizona, Louisiana, Georgia, and Texas are already heading back to school. Families need money for tuition and move-in costs, plus other items like back to school clothes and sports gear. Accessing funds from a pending lawsuit is always an option, and a main reason why applications for funding actually start to pick up in August for us."
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Commercial Deals

Woodsford Funds Class Action Against IG Markets Over CFD Products

Class actions remain one of the most powerful tools for individuals to seek legal redress against major corporations, especially when it comes to the world of retail investors who are engaging in a market that is significantly imbalanced against them. In another example of this trend, we have seen a second funded class action brought against IG Markets for its sale of derivative products to Australian retail investors. In a recent post, Woodsford announced that it is funding a class action against IG Markets Limited and IG Australia Pty Ltd (IG), with the lawsuit focused on allegations that IG misled retail investors in its sale of contracts for difference (CFDs). The class action, which was filed in the Federal Court of Australia on Monday, focuses on IG’s marketing and offering of these derivative products between 4 May 2017 and 11 August 2023. This is not the first class action that has publicly announced support from a third-party funder, with LFJ reporting in May that Omni Bridgeway was funding a similar action brought by Piper Alderman against IG Markets over the sale and marketing of CFDs. Alex Hickson, senior investment officer at Woodsford, stated that the funder is “committed to backing this action against IG on behalf of those people who have suffered loss trading these risky and complex products.” He also emphasised that the Australian Securities & Investments Commission (ASIC) has already analysed these derivative products and “has recognised the harm they can cause retail investors.” With funding from Woodsford, the class action’s applicant is being represented by Australian law firm, William Roberts Lawyers. Ding Pan, principal at William Roberts stated that the firm is “firmly committed to recovering compensation for retail investors” and emphasised that IG had sold products which “are highly risky and involve significant and non-transparent fees.”
Announcements Commercial Deals

Slater and Gordon Agree to £33MM Committed Facility with Harbour

Leading UK consumer law firm Slater and Gordon has agreed a £33 million committed facility with litigation funder and lender to law firms, Harbour, in what is believed to be one of the largest lending deals in the sector this year. Slater and Gordon firm will use Harbour’s capital to invest in developing its consumer legal services teams, and to fund a substantial book of clinical negligence and other personal injury claims, consistent with its strategy to be one of the UK’s leading provider of personal injury and related services. Harbour is the world’s largest privately owned litigation funder. Through its increasingly close strategic relationships with law firms, Harbour has broadened its investment appetite over the last 18 months to include the provision of lending and credit facilities to law firms, supporting them in the execution of their growth plans.  Unlike some traditional lenders, funds can be used for multiple purposes, which gives the leaders of multi-strategy law firms flexibility in executing projects involving multiple workstreams or multiple practice areas. Nils Stoesser, Chief Executive Officer of Slater and Gordon, said: “The ethos of the entire Slater and Gordon team is to support our clients by delivering an exceptional service across a whole range of consumer law issues.  We have been looking for a financial partner to help us capitalise on the next stages of the firm’s growth, and we are we are delighted to have Harbour’s support and confidence in our future.” Elizabeth Comley, Chief Operating Officer of Slater and Gordon, said: “The facility we have agreed with Harbour gives us access to stable capital over several years which we can use to make substantial investment in our core consumer legal services businesses.  We have big growth ambitions for our personal injury, clinical negligence, and other practice areas, where we know we have a competitive advantage. This new facility allows us to realise those ambitions, and in Harbour we’ve found a natural partner who really understand the needs and business of law firms.” Ellora MacPherson, Managing Director and Chief Investment Officer at Harbour, added: “Harbour is pleased to be supporting Slater and Gordon with this new credit facility. We are excited about their future growth plans as reflected by this significant investment.  We look forward to our partnership together.” Harbour has recently provided credit facilities to Bamboo Group and to Rothley Law.  A team from FRP Advisory led by Andrew Dimmock were instructed by Slater and Gordon to assist with sourcing a debt facility. Slater and Gordon’s previous working capital facility from VFS Legal is now replaced by this facility from Harbour. About Slater and Gordon Slater and Gordon is one of the UK’s largest law firms. With a team of highly skilled and experienced lawyers, paralegals, medical experts, rehabilitation co-ordinators and support staff, Slater and Gordon provide comprehensive legal services across a number of specialties. Headquartered in Manchester with 11 offices across the UK, Slater and Gordon specialises in consumer legal services, including serious injury, clinical negligence, abuse law, court of protection, employment and family law matters. Slater and Gordon has been recognised by multiple independent legal guides such as Chambers and Legal 500 and is highly specialised in representing individuals who’ve been affected by life-changing and serious injuries. About Harbour Harbour is the world’s largest privately owned litigation funder, which now also lends and provides credit facilities to law firms. Since launching in 2007, the business has been at the forefront of the growth and development of the global funding market. In the summer of 2023 it also announced facilities for Rothley Law and Bamboo Legal Services. Headquartered in London, the business funds cases across the globe ranging from one-off disputes valued from circa. £1m to portfolios of multi-million-pound cases, as well as loans and credit facilities for law firms with no upper limit. Harbour is a founder member of the Association of Litigation Funders (ALF), a member of the International Legal Finance Association (ILFA). Ellora MacPherson is Managing Director and Chief Investment officer.
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Commercial Special Features

LFJ Member Leverages Informal Introductory Services to Finance ESG Claim

Litigation Finance Journal is well-regarded as the leading publication covering the global legal funding sector, but what is perhaps less-well known is that LFJ also serves as a digital hub for industry stakeholders to connect, via our informal introductory services. A recent example illustrates the impact that LFJs access to the global funding community can have, as Brazilian attorney and activist Daniel Cavalcante leveraged our introductory services to raise funding for a claim on behalf of Indigenous communities in the Amazon.  In a post by No Impunity on LinkedIn, the impact litigation funding platform announced that it would be collaborating with Daniel Cavalcante, a lawyer who has been fighting for the rights of indigenous communities in the Brazilian Amazon. No Impunity stated that it would be funding a lawsuit “that directly benefits indigenous communities, taking real steps towards justice”, highlighting the synergy between Cavalcante’s goals and their mission to finance litigation that fights back against climate and human rights abuses by corporations. Yanis Lunetta, Co-Founder and Co-CEO of No Impunity, praised LFJ's global network of litigation funding stakeholders: "Through LFJ's network, No Impunity was introduced to Daniel Cavalcante. This connection proved transformative, enabling grassroots fundraising for an ESG claim. Daniel's commitment, backed by No Impunity and combined with the trust LFJ instilled, illustrates a dynamic synergy in financing legal action to achieve corporate accountability." Aurelia Le Frapper, Co-Founder and Co-CEO of No Impunity, added: "Litigation Finance Journal played a key role in our mission to democratize impact litigation. They had an essential part in connecting us directly with Daniel Calvalcante, representing Brazilian communities facing substantial socio-environmental harms.This connection paved the way for No Impunity to fund the investigation phase of this legal process. As we prepare for our public launch event at UCL on 25 September to present our platform and start fundraising for this first case, we express our gratitude to LFJ for its essential contribution in advancing impactful legal initiatives." In his own post on LinkedIn, Cavalcante expressed his excitement for the collaboration with No Impunity, saying that “the recognition of my work as a lawyer, representing different associations and tribes, is a source of inspiration to continue facing socio-environmental challenges.” As LFJ reported back in February, Cavalcante has been actively campaigning for support from funders and law firms to support lawsuits against large international corporations harming the people and the environment of the Amazon.  No Impunity stated that it would reveal the details of the case on August 25, and encouraged any interested parties to get in touch.
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Announcements Commercial Deals

Litigation Funder LegalPay Launches Online Dispute Resolution Platform

In a bid to decongest the Indian legal system, LegalPay, India’s largest litigation financier has launched an Online Dispute Resolution (ODR) wing called Bharat Dispute Resolution (BDR). BDR is a revolutionary service that will help businesses across the sectors, fintech startups, banks, and NBFCs recover their dues efficiently and manage their portfolio better. BDR is a digital platform that leverages artificial intelligence, data analytics, and legal expertise to resolve disputes and recover dues in a fast, cost-effective, and hassle-free manner. Through its cutting-edge technology, which includes automation of bulk notices, tracking responses, administration of stamp duty, and data repository for cases intertwined with the legal services of experienced professionals, it offers a holistic and comprehensive solution for all legal woes. "We are excited to unveil Bharat Dispute Resolution, an innovative solution poised to redefine the landscape of dispute resolution and tackle the problem of unpaid account receivables”, said Kundan Shahi, Founder & CEO of LegalPay. BDR leverages the industry's expertise in online arbitration and mediation and its network of over 5,000 lawyers and arbitrators across the country to provide fast, fair, and cost-effective solutions for resolving disputes arising from unpaid loans, payment defaults, and other issues. BDR expects to manage 1,00,000 cases by the end of December this year. “It [BDR] also reduces the burden on the judiciary and promotes alternative dispute resolution methods. We are excited to launch this service and help millions of businesses across India. We are confident that BDR will continue to grow and scale in the coming years and become the preferred choice for dispute resolution across the globe”, Shahi added. With its new wing, LegalPay aims to empower its clients to focus on growing its business, while reducing their bad debts, improving their cash flow, and confidently growing their businesses. About LegalPay:  LegalPay is a pioneer in the litigation funding space in India. Since its inception in 2019, LegalPay has underwritten over 30,000 cases across various sectors, including e-commerce, fintech, ed-tech, healthcare, logistics, and manufacturing. LegalPay aims to democratize access to justice and make legal services affordable, accessible, and transparent for everyone. Currently managing over INR 2,600 Crores in claims under management, LegalPay expects to manage INR 5,000 Crores by the end of this year.
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Case Developments Commercial

TRGP Capital Backs Covid Lawsuits Against UK Universities

Among those sectors impacted by Covid-era policies and restrictions, the education sector experienced an immediate and tangible change, with universities pivoting to remote teaching services. As LFJ has previously reported, litigation resulting from these policies is already ongoing with funders and law firms eager to represent students who argue they did not receive the services they paid for. Reporting by Bloomberg Law provides the latest details around the numerous lawsuits being brought on behalf of students against 18 UK universities, which allege that these institutions failed to deliver the quality of services that were advertised when the students enrolled. According to the article, US-based litigation funder TRGP Capital is providing financing for approximately 140,00 claims. Whilst Bloomberg’s reporting does not provide any details on the amount of litigation funding provided, a Financial Times article from last month revealed that TRGP Capital had committed at least £13 million in financing to support these lawsuits. The claims are being led by law firms including Asserson Law Office and Harcus Parker, with an active marketing campaign underway to reach more university students who could be brought on as claimants.  Shimon Goldwater, partner at Asserson, emphasized the importance of TRGP’s support: “there needs to be a funder if it’s going to be able to go to trial, so it was always contingent on getting some funding.” Goldwater explained that claims by undergraduate students could be valued at £5,000 each, meaning that if successful, the overall litigation could result in a settlement worth hundreds of millions.  
Announcements Commercial Deals

LF Legal Finance SE Acquires Option on Major International Case

The Frankfurt-based litigation financing company LF Legal Finance SE, through its subsidiary Legal Finance International GmbH (Düsseldorf), has acquired an option to finance an international tort case with a value in dispute of up to EUR 1.0 million. If the case is financed and won, Legal Finance expects significant cash inflows. The option agreement was signed on 11 August 2023 and has a term of 2 months. It gives Legal Finance the exclusive option to fund the litigation with a value of approximately EUR 1.0 million. Subject to funding, Legal Finance will decide whether to exercise the option within the term of the agreement. The financing of further claims and ancillary litigation arising from related matters with a further cumulative amount in dispute of up to a further EUR 1.0 million is currently being negotiated. The complex international case involves several jurisdictions, including non-European jurisdictions, and is ripe for trial. The defendant in the main action is solvent and reachable. The issues in the case include damages and corporate law. As usual, Legal Finance is only involved in the funding of the proceedings and is not intervening in the litigation. The proceedings are conducted solely by the plaintiff through experienced litigators. Any cost-increasing measures will be taken in consultation with Legal Finance. LF Legal Finance SE is in the process of further clarifying the ancillary litigation and will involve external lawyers in a more detailed examination of the prospects of success of the claims. In addition, other sources will be consulted to verify the solvency of the defendants in the ancillary proceedings.
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Commercial People Moves

Oliver Gayner Departs Omni Bridgeway for William Roberts Lawyers

An article by The Global Legal Post covers the news that Oliver Gayner, Omni Bridgeway’s co-managing director and chief investment officer for Asia-Pacific, has left the funder to join William Roberts Lawyers. The Australian law firm is a boutique outfit which specialises in dispute resolution, litigation, and property transactions.  In a post on LinkedIn announcing the move to William Roberts, Gayner stated: “After many years working closely with Bill Petrovski and Robert Ishak as a funder, I know first hand the quality of the team they have built, and it's a very exciting time to be joining the firm and adding my experience to the class actions and commercial litigation practices. I'm particularly looking forward to working with the firm's valued clients, including our many friends in the funding industry.” According to a press release on William Roberts’ website, Gayner “will significantly bolster William Roberts’ class actions and commercial litigation offering.” Gayner’s move comes at the same time that the firm brings in a new hire to its Brisbane office, announcing the arrival of Fred van Reede, who will be adding valuable strength to its insurance and commercial litigation services.
Commercial Legal Innovation

Combining ATE Insurance and Funding to Strengthen In-House Counsel

Litigation funding and litigation risk insurance, such as after-the-event (ATE) insurance, have both experienced significant growth in recent years as litigants look for tools to offset risk and ensure that they have the resources to see the legal process through to a conclusion. Together, third-party funding and ATE insurance represent a potent combination that may be of great value, especially for in-house legal teams which face increasingly strict budgets. In an article for Legal Futures, David Pipkin, non-executive director at Temple Legal Protection, makes the argument for why in-house counsel should avail themselves of the services provided by litigation funders and ATE insurers. Pipkin argues that the combination of these two powerful tools can “cover the costs of legal action and mitigate the financial risk of pursuing legal matters”, thereby maintaining a legal department’s ability to pursue meritorious litigation without incurring excessive risk. Pipkin highlights that whilst commercial litigation lawyers have been relatively quick to adopt the use of these services, he has seen a notably slower pace from those lawyers working in-house. He suggests that the reason for this hesitant approach may be the assumption from legal teams that taking on funding will lessen their control over the litigation, or that there is some perceived weakness in taking on ATE insurance coverage. In contrast, Pipkin points out that “ATE insurance not only transfers the risk of litigation but the organization gains an experienced litigation insurance partner.” In an environment where “most organizations don’t have large pockets to fund litigation”, Pipkin suggests that third-party funding can be a useful method for offsetting those budgetary concerns.
Commercial Special Features

Key Takeaways from LFJ’s Town Hall on How Litigation Funders Should Respond to the UK Supreme Court Ruling

Wednesday, August 9th, LFJ hosted a panel of UK-based litigation funding experts who discussed the recent UK Supreme Court decision, and the potential impacts on the funding industry. The expert panel included: Nick Rowles-Davies (NRD), Founder of Lexolent, Neil Johnstone (NJ), Barrister at King's Bench Chambers, and Tets Ishikawa (TI), Managing Director at LionFish. The panel was moderated by Peter Petyt (PP), Founder and CEO of 4 Rivers Services. PP: How does this ruling impact the enforceability of LFAs in current, ongoing cases?  And what about LFAs from previously funded and concluded cases?   NRD:  It has a pretty big impact.  First of all, the existing arrangements between clients and litigation funders are going to come under scrutiny, because the lawyers acting for clients are going to have to review their positions. This is not a decision which is making new law, this is a statement of existing law as it has always been, so that review will have to be dealt in the light of the decision. The bigger impact is going to be on concluded cases. That may cause some difficulties. I'm already hearing that there are ongoing discussions on matters that have already concluded, where an agreement that provided for a percentage to be paid to the funder is now being discussed as to whether it should have been paid. That is going to be a distraction, it is going to be an ongoing issue, and I suspect that there will be opportunistic attempts on the part of defendants, in terms of challenging existing litigation funding agreements. So how that concludes, one can only guess, but the reality is, it's a distraction and disruption, and will be an ongoing issue. PP: Tets, you're running a fund. You've concluded agreements, you've got ongoing agreements. How are you proposing to deal with all of this?  TI: Ultimately we are in the business of funding litigation cases, so the world goes on. We can't stop doing it just on the basis of what may be a speculative risk. What we're trying to understand here, is the key risks we have. In terms of our book, we don't have any percentage share of the awards, in relation to proceedings in the CAT. So we're safe in that regard. But in terms of enforceability, there are some agreements that we've had to refute. But obviously, that's a commercial conversation, and the reality is, people are generally appreciative that they've got funding, not ungrateful, so there's a lot of cooperation. I agree with Nick that generally speaking, the ongoing cases and cases going forward are more manageable. The big distraction will be the concluded cases. My position is slightly more nuanced than Nick's, in that I think it is a distraction, but I think it's going to be far less of a risk, partly because the reality is that a lot of funding agreements are entered into in the first place with the purpose of helping claimants that are impecunious. If the claimants have got damages out of it, they are certainly very grateful. Granted, there are some who may not have gotten as much as they wanted because of funding arrangements. But there is the fact that they've gone through a very long litigation process. If it was all about money, then some might very well pursue that course of action. But the reality is, most will think twice about going after a funder, and if they do, the chances are that they'll probably need funding anyway. So if they have to go back to funders, only funders with no interest or claims or willingness to back the industry in the UK would fund those claims. So I think it's more of a distraction than a real risk. PP: Do you see any consolidation or direct impacts on the consolidation piece, from this judgement?  NJ: I suspect there will be anyway. This comes at a time that is difficult for all funders given the larger macro-environment. This comes at unfortunate timing. However, the hardest knives are forged in the hottest fires. I do think you will see not just consolidation within the industry, but funders looking at where they can best add value, such as portfolio funding or other strategies, so they have a proper niche within the market. Overall, it's not terminal for the industry by any stretch. It is a bump in the road that is inherent in any growing industry. But I do think that regulatory clarity would help the industry a lot. There is a lot of useful ammunition for ILFA in Lady Rose's dissenting judgement and in previous judicial comments making well-worded judicial criticism of the legislative patchwork we have in the UK. And I think there could be a very good argument to put forth to a government that I hope could be sympathetic to wishing this industry continues. London is a legal and financial capital of the world, and this industry sits at that nexus. So long term, there is nothing to particularly worry about. To listen to the full panel discussion, please click here.
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Commercial Regulatory Issues

Impact of Supreme Court Judgement on Litigation Funding for Insolvency

The full impact of the UK Supreme Court’s decision on litigation funding agreements (LFAs) may not be felt for some time, with industry commentators ranging in their forecasts from cautiously optimistic to extremely concerned. However, whilst much of the coverage has been directed at what the overall impact will be on the litigation finance industry, it is also useful to analyze how the judgement will affect individual sub-sectors within the market. In an article published on Lexology, Helena Clarke, director in the restructuring & insolvency practice group at Squire Patton Boggs, looks at where the Supreme Court judgement may impact the use of third-party funding by insolvency practitioners. Clarke notes that one key difference for insolvency funding is that outside of traditional LFAs, it is not uncommon for insolvency practitioners to assign their claims to litigation funders, who can then proceed with the litigation under their sole ownership. The Supreme Court’s decision may have a limited impact on many insolvency matters, as there is little suggestion that assigning claims would fall under the court’s definition of claims management services. However, Clarke emphasizes that insolvency practitioners still need to review claims more broadly to check that their enlistment of a litigation funder’s services does not fall within this category. Furthermore, in those cases where an LFA has been implemented, Clarke recommends that insolvency practitioners review these agreements to ensure compliance with the DBA regulations and where they are not compliant, must work swiftly with funders to amend these arrangements. As other analysts have suggested, there could still be unknown impacts on historical and previously concluded claims that involved an LFA, and therefore, it is important that insolvency practitioners also keep a close eye on any developments that may impact their past claims.
Commercial Deals

Bench Walk Funding Novel Competition Claim Against UK Water Companies

Collective action claims in the UK can be a powerful tool for those seeking legal redress from large companies, but are also an opportunity to explore untested areas of competition law that may allow consumers to receive compensation for anti-competitive behavior by those businesses that dominate individual sectors.  Reporting by The Law Society Gazette details a new opt-out competition claim being brought against UK water companies, which is notable for its unique quality as the first collective claim focusing on compliance requirements with regards to environmental legislation and reporting responsibilities. The claim, which is being brought under the 1998 Competition Act, alleges that multiple water companies failed to adequately report sewage and other incidents to the Water Services Regulation Authority (Ofwat). The claim is being funded by Bench Walk Advisors and led by Leigh Day, with Professor Carolyn Roberts, an environmental and water consultant, set to act as class representative. Roberts argues that because these water companies have used their local monopolies to under-report on these issues, they have avoided receiving penalties from Ofwat, which have led to their customers “being unfairly overcharged for sewage services.” Zoë Mernick-Levene, partner at Leigh Day, explained that it is the power of these monopolies that is at the heart of the issue, and that “if there was proper competition, others would come in and report.” Mernick-Levene stated that the aim of this collective action case was both to seek compensation for consumers and to “act as a deterrent to future misconduct”, which is fueled by such an anti-competition environment. The first of these claims has been filed against Severn Trent Water, but further claims are expected against Anglian Water, Northumbrian Water, Thames Water, United Utilities and Yorkshire Water. Leigh Day has stated its intention to have all six claims handled together, with the whole claim representing 20 million customers with the value of compensation payments being sought totaling more than £800 million. A statement by Severn Trent described the litigation as “a highly speculative claim with no merit which we strongly refute” and claimed that the company is “recognized as a sector leader by both regulators across operational and environmental measures.”
Commercial Fundraising

David Gallagher and Ajit Singh Launch The Litigation Fund

The litigation finance industry is once again showing signs of strength and continued growth, as another new startup funder has announced its entrance into the market. In a post on LinkedIn, David Gallagher announced the launch of The Litigation Fund, which he is founding alongside Ajit Singh.  David Gallagher comes to this new funder having previously spent five years at The D. E. Shaw Group, where he was Co-Head of Litigation Funding. Gallagher’s prior experience includes three years at Omni Bridgeway as an Investment Manager and Legal Counsel. Ajit Singh joins the venture having garnered significant experience in his 11 years at Law Finance Group, where his role included the positions of Vice President, Head of Engagement, and Legal Counsel.
Announcements Consumer

Pegasus Secures Warehouse Facility with a Leading Bank

Pegasus Legal Capital, LLC ("Pegasus") (mylawfunds.com), one of the preeminent pre-settlement legal funding companies in the U.S., announced today that it has recently closed a senior debt transaction with East West Bank. This marks another significant capital market transaction for the company and proceeds from the transaction will enable Pegasus to continue its growth across the United States. Pegasus Managing Director, Max Alperovich commented, "With the addition of the new facility Pegasus will now be able to further expand its business in the personal injury market all while maintaining its industry leading service." East West Bank Managing Director, David Hough, commented, "As the leading bank lender to the litigation finance market, East West Bank is pleased to engage with the Pegasus management team, and provide a senior, secured capital facility that will fuel their continued future growth. The entire Pegasus management team has a deep, demonstrated commitment to their customers and to the broader personal injury market." GreensLedge Capital Markets LLC acted as financial advisor to Pegasus in connection with the transaction. Pegasus is a proud member of the American Legal Finance Association (ALFA), which is comprised of companies nationwide that provide non-recourse funds to personal injury victims. One of the goals of ALFA was to create industry standards within the legal funding industry regarding transparency in each funding transaction with upfront clear disclosure to consumers. East West Bank provides financial services that help customers reach further and connect to new opportunities. East West Bancorp, Inc. is a public company with total assets of $68.5 billion. The company's wholly-owned subsidiary, East West Bank, is the largest independent bank headquartered in Southern California, and operates over 120 locations in the United States and in Asia. The Bank's markets in the United States include California, Georgia, Illinois, Massachusetts, Nevada, New York, Texas, and Washington. For more information on East West, visit www.eastwestbank.com. Max Alperovich can be reached at Max@mylawfunds.com.
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Case Developments Commercial

Apple Lawsuit Raises Familiar Issues Around Third-Party Funding

The disputes over disclosure in patent litigation funding continue to roll on, with certain judges taking steps to proactively requiring disclosure, and individual state legislatures enacting legislation that mandates a level of transparency for funders. An ongoing case involving Apple in California has once again shown the many issues that may arise where the court feels that funders are not sufficiently forthcoming about their involvement in cases. An article in the Northern California Record looks at the increasingly prominent issue of disclosure for third-party funding, and highlights an interesting development in the case of Taction Technology, Inc. v. Apple Inc. in the US District Court for the Southern District of California. Whilst the Southern District, unlike the Northern District, does not have any standing orders regarding the disclosure of third-party funding, the involvement of funders in Taction’s patent infringement lawsuit has become a prominent issue.  On July 18, District Judge Jill Burkhardt ordered Kenosha Investments LP and Gronostaj Investments LLC to offer explanations as to why they should not be sanctioned for allegedly misleading the court about the scope of their involvement in the litigation. Judge Burkhadt stated that both funders, who are affiliates of Burford Capital, may have broken their “duty of candor” to the district court, with a follow-up hearing scheduled for August 15.  Dennis Abdelnour, IP partner with Honigman LLP, highlighted the issues at stake in the Taction case as an example of a common problem stemming from funder involvement in patent litigation. Abdelnour explained that: “Discovery relating to third-party litigation funding presents difficult privilege questions, which means that disputes will often end up in motion practice and before a Court for resolution.”
Commercial Legal Innovation

Four Ways Law Firms Can Use Litigation Finance

Expanding beyond the traditional scope of single case funding is a key priority for many litigation funders across the globe, with both portfolio financing and law firm funding becoming a key part of these business models. When it comes to discussions of law firm financing, it can often seem as if this is a broad and nebulous term, but there are several ways which law firms can benefit from, and make use of, third-party funding. In a blog post from Omni Bridgeway, Naomi Loewith, director of strategic partnerships – Canada, offers an overview of four ways that law firms can take advantage of litigation finance to grow and strengthen their businesses. Firstly, Loewith raises the common issue of firms who are burdened by large sums of unpaid WIP matters, where clients have been unable or late in paying their bills. In such scenarios, outside funding can be a useful remedy, benefitting the client who can now alleviate financial obligations, and ensuring that the firm is able to continue acting in these cases whilst still ensuring cash flow. Outside of clients failing to pay their bills, Loewith also raises the opportunity for firms to expand their businesses by acquiring a new line of business. Funders can provide the capital to kickstart these new operations until they are self-sustaining, with the additional benefit that funding requires firms to repay only once revenue is being generated. As a third use case, Loewith highlights that as law firm mergers are expected to increase in frequency post-pandemic, a firm that uses portfolio financing can demonstrate to partners that it has guaranteed revenue and a lower risk portfolio. This pre-existing financing option can make the merger process more efficient and even position the firm as a more attractive merger target. Finally, Loewith suggests that for those firms looking to geographically expand, the same kind of portfolio financing can act as a powerful catalyst to support expansions which are naturally capital intensive. As with the previous examples, third-party funding can provide the needed financing without forcing the firm to take on more debt.
Case Developments Commercial

Details of Nanoco Settlement Distribution Revealed

The nature of the litigation finance industry means that it is often difficult for outsiders to gain insight into the particulars of individual funding arrangements, or the intricacies of any returns on investment. However, there are rare occasions where we can find glimpses into the underlying fundamentals of the industry, and how funders find value in the long-term investments they pursue.  An article in DirectorsTalk Interviews, sheds light on one such investment as it provides an overview of Nanoco Group’s latest trading update, which includes details of highlights for the financial year.  As LFJ reported in February of this year, Nanoco reached a $150 million settlement agreement with Samsung Electronics to end the long-running patent infringement lawsuit that Nanoco had brought against the tech giant. The February announcement also confirmed that GLS Capital had been funding the case, after Nanoco had first announced its use of an anonymous third-party funder in July of 2020. However, through this update, we can now see a rough approximation of how that settlement will be distributed. Nanoco revealed that a £62.1 million tranche of the settlement was received in March 2023, with the “majority used to pay funders and advisors”. Whilst there are no details of how this sum will be divided between the funder and other parties, it is notable to see that a significant portion of the final settlement will be returned to third parties. Nanoco also stated that the second tranche of the settlement payment, totaling $75 million, will be received solely by Nanoco by 3 February 2024. This total is less $3.25 million due to Korean withholding tax.