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Announcements Commercial People Moves

Validity Finance Announces Promotions of Michelle Eber & Sarah Williams

Validity Finance is pleased to announce the promotion of Michelle Eber to Director of Patent Investments and Sarah Williams to Director of Underwriting, effective immediately.

Michelle Eber joined Validity's Houston office in January of 2022 from Baker Botts, where she spent more than 10 years as a patent and trade secret litigator, representing plaintiffs and defendants in the energy and technology sectors in high-stakes IP cases, including disputes involving oilfield technologies, telecommunications systems, data and video compression systems and computer hardware and software. Michelle has played a key role in sourcing and evaluating patent investments since joining the Validity team, and in her new role as Director of Patent Investments, will oversee the entirety of Validity's portfolio of patent investments. She will also continue to lead Validity's due diligence of new patent litigation opportunities, and the monitoring of funded patent cases.

Sarah Williams joined Validity's Houston office in November of 2020 from Kirkland & Ellis, where she had been a Partner in the litigation practice and successfully represented both plaintiffs and defendants in high-stakes, bet-the-company litigation across the country. Her broad experience in all aspects of complex commercial litigation includes energy, contract, fraud, antitrust, and bankruptcy-related disputes. Since joining the Validity team, Sarah has worked closely with clients, law firms, and the Validity team to develop innovative solutions to meet the legal finance funding needs of companies in Texas and beyond. As Director of Underwriting, Sarah will oversee Validity’s case underwriting and diligence, including developing and implementing new policies and procedures and ensuring consistent application of Validity’s robust underwriting standards across its portfolio.

"As we approach our fifth anniversary as a company, we are proud to have grown to be the largest private funder in the U.S., and to have a team that includes so many female leaders," says Managing Director & Senior Investment Officer Laina Hammond, who leads Validity's Houston office. "Michelle and Sarah have been a key part of Validity's growth in their time here. We are so thrilled to have them step into these new roles and have the opportunity to make an even greater impact on Validity's ability to serve the law firms and clients with which we partner."

About Validity

Validity is a leading commercial litigation finance company dedicated to fair funding practices that build trust. Validity’s mission is to make a meaningful difference in our clients’ experience of the legal system. We invest in commercial, patent, bankruptcy, and breach of contract litigation, as well as international arbitration. With decades of combined experience in funding, our team of trial-tested attorneys has invested over $370 million since 2018 across more than 70 matters and portfolios. Our management team has an over 85% success rate. Clients and law firms count on Validity for reliable capital, strategic help, and risk minimization. Our focus is fairness, innovation and clarity.

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Announcements Commercial Deals

PREMIER LITIGATION FINANCE FIRM ROCADE LLC PARTNERS WITH BARINGS AND EJF CAPITAL

Rocade LLC (“Rocade” or the “Company”) today announced its launch as a specialty finance company focused on litigation finance with a long-term investment approach, in partnership with Barings LLC (“Barings”), one of the world’s leading investment managers.

Under the terms of the transaction, funds affiliated with Barings have made a significant equity investment into the Company. EJF Capital LLC (“EJF Capital”), which launched Rocade’s predecessor vehicle, Rocade Capital LLC in 2014 with a highly skilled management team, will support the platform and remain a material shareholder in the newly formed entity alongside management, which will transition to the Company.

Headquartered in the Washington, D.C. area, Rocade provides flexible law firm financing solutions, with facilities ranging in size from $10 million to over $100 million which are secured by contingent fees receivable or other litigation assets. Under this new organizational structure, Rocade will benefit from having a robust and patient capital base backed by Barings, enabling it to provide flexible, long-term capital solutions to growing law firms, while leveraging the team’s combination of deep sector expertise and financial structuring capabilities.

Brian Roth, Chief Executive Officer and Chief Investment Officer of Rocade, said, “Uniting with Barings in our vision for a permanent capital vehicle is an incredible milestone for Rocade, as this long-term investment horizon sets us apart and will meaningfully enhance our alignment with the firms in which we invest. The strength of our combined experience and expanded financial resources empowers us with scale and flexibility to continue our trajectory as a leading litigation credit provider in the rapidly evolving litigation finance industry.”

“We are thrilled to partner with Rocade to cement its status as a leading litigation finance provider,” said Bryan High, Head of Capital Solutions at Barings. “Brian and the outstanding team of professionals at Rocade have built a best-in-class, technology-enabled platform that meets the needs of many law firms as they navigate increasingly complex litigation. Rocade’s deep relationships, strong credit culture, and market-leading expertise powerfully complement Barings’ permanent capital base and long-term investment approach.”

“This expanded capital base allows us to scale our platform more quickly while maintaining our focus on asset quality,” added Jacob Cantrell, Chief Risk Officer of Rocade. “Our core team, process, and product will remain the same while we continue to invest in technology to improve our decision process and drive efficiency. Adding the strength, diversity, and scale of resources available across the Barings private credit team to these core strategies offers Rocade more long-term flexibility and reliability for our law firm partners.”

Emanuel Friedman, Co-Founder and Co-CEO of EJF Capital, commented, “We are pleased to participate in the continued success of Brian and his team, who have built a terrific platform that has differentiated itself through an institutional approach to a niche asset class and a data-driven process for understanding complex situations. I look forward to partnering with an innovative and dynamic capital partner in Barings, and I am confident that Rocade is well positioned for a highly successful next chapter with a renewed focus on becoming a dominant player in the space over the long-term.”

Fried, Frank, Harris, Shriver & Jacobson LLP served as legal advisor to EJF Capital. Dechert LLP served as legal advisor to Barings. Nixon Peabody LLP and Cooley LLP served as legal advisor to Rocade and management.

About Rocade

The Company, which operates as Rocade Capital, is a private credit firm which provides flexible growth capital for plaintiff law firms in order to finance case acquisition, manage working capital or realize settled cases.  Since Rocade’s predecessor was founded in 2014 by EJF Capital, the platform has funded approximately $900 million of loans to leading law firms within mass tort and other complex litigation, unlocking potential for dozens of growing law firms.  Its flexibility, industry expertise, track record and long-term focus position it to be a leading law firm lender.  Rocade has an experienced team of professionals, located in the Washington, DC area and Houston, TX, which includes both finance industry veterans as well as litigation experts. For more information, please visit https://rocadecapital.com/.

About Barings

Barings is a $347+ billion* global investment manager sourcing differentiated opportunities and building long-term portfolios across public and private fixed income, real estate, and specialist equity markets. With investment professionals based in North America, Europe and Asia Pacific, the firm, a subsidiary of MassMutual, aims to serve its clients, communities and employees, and is committed to sustainable practices and responsible investment.

*Assets under management as of December 31, 2022.

About EJF Capital

EJF Capital LLC is a global alternative asset management firm headquartered outside of Washington, D.C. with offices in London, England and Shanghai, China. EJF has over 70 employees, including a seasoned investment team of over 30 professionals. The firm was founded in 2005 by Manny Friedman and Neal Wilson. To learn more, please visit http://ejfcap.com.

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Commercial

Omni Bridgeway Emphasizes Funder Support for Judgement Enforcement

The mark of successful litigation is not limited to the simple terms of a favorable judgement or ruling, as plaintiffs must often measure their success by the ability to enforce a judgement and the collect on any award or damages that were ordered. However, enforcement is rarely a straightforward matter, and as litigation funders seek to provide added value to their clients, experience and expertise in judgement enforcement will be a valuable asset. In a new blog post by Omni Bridgeway, Gabe Bluestone and Jeff Newton emphasize that in the current economic climate, plaintiffs are likely to find it increasingly challenging to enforce judgements and secure the financial awards they are owed. In order to navigate these difficult circumstances, the authors argue that utilizing a funder with a dedicated enforcement team or even seeking specialist enforcement funding will be a useful tool for claimants dealing with resistant debtors. Bluestone and Newton state that while this should always be considered at the start of any litigation, enforcement expertise and specialist funding can be incredibly useful at any stage of the litigation process. This kind of support can range from enforcement planning that seeks to proactively prevent issues with collection, funding for plaintiffs that are in financial difficulty during the enforcement process, or insolvency funding where debtors take advantage of bankruptcy protections.
Commercial People Moves

Lionfish’s Owner Replaces Chief Executive

As LFJ reported in December, the prominent UK funder Lionfish is facing a challenging road ahead as its owner, RBG Holdings, announced that it would be reviewing the strategy for its litigation finance arm. Outlined by reporting in City A.M., RBG recently announced the firing of chief executive Nicola Fouston, who is being replaced by chief operating officer, John Divers. RBG stated that it had fired Foulston due to “cultural concerns and the execution of the group’s strategy”, and that the board had “lost confidence” in her leadership. With the company’s share price continuing to suffer after this latest announcement, RBG has maintained that it would continue with a strategy to limit its exposure to funding commitments through Lionfish.
Announcements Commercial People Moves

Omni Bridgeway continues US expansion with new operations in Miami and Chicago

Omni Bridgeway is delighted to announce the expansion of its operations into Chicago and Miami with the additions of investment managers and office heads, Maryanne Woo in Chicago and Lauren Alexander in Miami. We also welcome Enrique Molina, who joins Omni Bridgeway as an Investment Manager in Miami.

Maryanne joins Omni Bridgeway to continue building out the company's Midwest presence. She has over two decades of experience as a trial attorney in Chicago, handling complex disputes in state and federal courts involving product liability, multi-district litigation, mass tort, and shareholder derivatives issues. Prior to joining Omni Bridgeway, she was a litigation partner at Reed Smith LLP, where she focused on issues surrounding disruptive technology and artificial intelligence.

In Miami, Lauren brings local market knowledge and subject matter expertise in key areas such as bankruptcy, restructuring, multidistrict litigation, and commercial disputes. She has nearly 15 years of litigation experience in the Miami office of Weil Gotshal & Manges LLP, where she represented clients in a range of matters relating to contract disputes, business torts, antitrust, fraud, and asset valuation disputes.

Enrique joins Omni Bridgeway from King & Spalding in Miami, where he focused on international arbitration and litigation. With more than 6 years of experience, Enrique has handled numerous investor-state disputes involving Latin American parties in a broad range of industries including energy, mining, banking, and transportation.

"We are thrilled to continue our nationwide growth in Chicago and Miami, two of the fastest growing litigation markets in the US," said Jim Batson, Omni Bridgeway Managing Director and co-Chief Investment Officer for the US. "With Lauren and Enrique on board, we are excited to become one of the first commercial litigation funders to provide on-the-ground resources and expertise for law firms and corporations in Miami."

Managing Director and co-Chief Investment Officer for the US, Matt Harrison, added, "Maryanne's wide-ranging litigation experience and deep market knowledge are the perfect match for the dynamic Chicago market. Both Miami and Chicago are known for their sophisticated litigators and corporations who need an experienced risk management partner to navigate the financial complexities of high-stakes disputes. Omni Bridgeway is ideally situated to be that partner."

ABOUT OMNI BRIDGEWAY

Omni Bridgeway is the global leader in legal finance and risk management, including dispute and litigation finance from case inception to post-judgment enforcement and recovery. Listed on the ASX, Omni Bridgeway operates from 25 international locations.

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Announcements Commercial People Moves

Burford Capital Opens Dubai Office

Burford Capital, the leading global finance and asset management firm focused on law, today announces that it is opening its first Middle East office in Dubai, UAE, to meet increased client demand for legal finance in the region. With the addition of Dubai, Burford now has eight offices in North America, Europe, the Middle East, Asia and Australia.

Managing Director Daniel Hall will lead Burford’s Dubai team in addition to his ongoing co-leadership of Burford’s global asset recovery business. Previously based in Burford’s London office, Hall has relocated to Dubai and leads a team there that includes Joseph Durkin, Senior Vice President, an arbitration specialist and legal finance veteran in the Middle East, and Sylvia Chandel, Vice President, an experienced Middle East banker.

Burford’s Dubai office will provide a full range of legal finance, risk management and asset recovery services to companies, law firms and financial institutions throughout the Middle East.

Christopher Bogart, CEO of Burford Capital, said: “Burford continues to see growing demand for our legal finance capital globally, including in the Middle East. Our new office in Dubai will add a needed Middle East presence to meet client demand. We are pleased to open a physical office with senior-level experts in a region that offers even greater opportunities for the continued global growth of our business.”

Daniel Hall, Burford’s Managing Director in Dubai, said: “We are excited to formally begin our on-the-ground operations in Dubai and the Middle East. After eight years at Burford in London, I am eager to build upon our existing industry-leading work in the region that was previously on a fly-in basis. The team and I look forward to meeting with new potential clients in addition to existing ones as we continue to serve their various needs in arbitration, litigation and recoveries for non-performing loans. We have hit the ground running in the Middle East and Dubai, and I look forward to what’s ahead for us as the top regional and premier global provider of commercial legal finance and asset recovery expertise.” 

About Burford Capital

Burford Capital is the leading global finance and asset management firm focused on law. Its businesses include litigation finance and risk management, asset recovery and a wide range of legal finance and advisory activities. Burford is publicly traded on the New York Stock Exchange (NYSE: BUR) and the London Stock Exchange (LSE: BUR), and it works with companies and law firms around the world from its principal offices in New York, London, Chicago, Washington, DC, Singapore, Sydney, Hong Kong and Dubai.

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

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Commercial

LegalPay CEO Talks Opportunities and Challenges for Litigation Funding in India

As the global litigation funding market continues to grow, investors are looking to emerging markets and jurisdictions with a high potential for growth in the uptake of third-party funding. Looking forward to the year ahead, the CEO of India’s leading litigation funder has offered his perspective on the nuances of the Indian market for potential investors and funders. Writing in CXOtoday, Kundan Shahi, CEO of LegalPay, highlights the potential of the burgeoning litigation finance market in India, which he describes as having a greater potential in terms of the monetization of claims than other major markets such as London, Hong Kong and Singapore. As a developing economy India is also filled with unique opportunities, with Mr Shahi pointing to the rise in fraudulent and scam activity during the pandemic, as well as the evolution of insolvency regulations as catalysts for a surge in opportunities for third-party investment. Mr Shahi also notes that there are challenges facing funders entering the Indian market due to its legal framework, which may differ from that of traditional markets. He emphasizes the importance of new funders taking a more flexible approach and adapting to client-specific needs in order to succeed. However, Mr Shahi does suggest that the growth in the country’s arbitration and dispute practice will create fresh opportunities, which funders should look to take advantage of.
Commercial Deals

Therium Co-founder Sees Opportunity Amidst Economic Downturn

One of litigation finance’s most attractive attributes as an asset class is its lack of correlation to traditional markets. However, as one leading funder recently pointed out, litigation funding can go even further and benefit from economic downturns due to a correlated rise in litigious activity. Speaking with City A.M., Therium’s co-founder and chief investment officer, Neil Purslow, offered an optimistic outlook for the litigation funding industry despite the ongoing economic instability. Within the broader surge in litigation due to the economic downturn, Purslow also highlighted that in these difficult market conditions, companies may turn to litigation funders to provide the capital for meritorious litigation that they would struggle to finance given budget constraints. Purslow pointed to the rise in class action lawsuits in the UK as an area of continued growth for the London market, citing continued interest from investors who see litigation finance as a ‘counter-cyclical investment’ in the current market. In addition to these class action cases, Purslow suggested that ESG litigation could become a significant area of investment for funders, as the scope of this activity has increased to a point where ‘ESG is everywhere’.
Announcements Commercial People Moves

Omni Bridgeway announces EMEA leadership and investment management promotions in Amsterdam and London

Omni Bridgeway is pleased to announce the appointment of Hannah van Roessel as Co-Chief Investment Officer – EMEA, and the promotions of Kees de Visser and Alistair Croft. Based in Amsterdam, Hannah will work closely with Raymond van Hulst (Executive Director and Co-CIO EMEA) to jointly lead all aspects of Omni Bridgeway's EMEA operations. With 10 years of experience at Omni Bridgeway, Hannah brings a unique global perspective to her new role, having served as Senior Investment Manager and Director Enforcement first for EMEA and then the US, when she relocated to New York to launch the company's US judgment enforcement business in 2022. Throughout her tenure in the legal finance industry, Hannah has achieved a notable record of success, managing complex multijurisdictional enforcement cases and securing recoveries in contested settings. Before joining Omni Bridgeway, she practiced at leading law firms NautaDutilh and Loyens & Loeff, gaining significant experience with the cross-border recognition and enforcement of arbitral awards in many jurisdictions, in particular against sovereigns and semi-sovereigns. Commenting on Hannah's appointment, Omni Bridgeway Chief Executive Officer, Andrew Saker said, "Hannah is an exceptional talent, with an impressive track record of successfully expanding our business lines into new regions. She has a keen eye for strategy and client development that is the perfect complement to Raymond's experience and expertise in sourcing and structuring complex deals. We could not be better positioned for continued growth with Hannah and Raymond leading our team and business in EMEA." Also in Amsterdam, the company is pleased to announce Kees de Visser has been promoted as Chair of the Investment Committee for EMEA, in which he oversees funding requests as a member of the company's global investment committee. Before joining Omni Bridgeway in 2016, Kees practised law, admitted at De Brauw Blackstone Westbroek where he handled large and high-profile cross-border litigation and enforcement matters and led the firm's private international law team. In London, Alistair Croft has been promoted to Senior Investment Manager with a focus on enforcement, contentious trust and insolvency matters. Prior to joining Omni Bridgeway in 2015, Alistair practised law for over a decade, becoming a barrister and a partner at a leading law firm with a broad practice advising on complex cross-border litigation, fraud, enforcement, and contentious trust matters for UHNWI and insolvency. Raymond van Hulst, said, "I am thrilled to have Hannah on board as Co-CIO, and with the promotion of Kees and Alistair we are poised for continued success in EMEA. In combination with our recent hires in Dubai and Germany as well as our expansion into France we are proud to attract and promote the top talent in the industry. This is core to our strategy of continuing to establish operations in more jurisdictions and markets than any other legal finance provider, in order to best serve our clients with local knowledge and experience."
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Commercial Special Features

CFO’s and Litigation Finance: The Time is Ripe for Adoption

One of the holy grails of litigation funding has long been for funders to convince CFOs to view litigation through a commercial lens, and unlock the value of their legal assets. While straightforward and practical, the evolution of the CFO mindset on this issue has been slow to materialize. Many in the litigation funding community blame cultural norms—old habits are simply hard to break, which is especially true when things are going swimmingly. But with inflation upon us and a recession looming, the time is ripe for CFOs to reconsider their firm’s relationship to litigation funding. Research from Burford Capital in June of 2021 found that 75% of companies with over $1 billion in annual revenues reported unenforced judgments worth $20-$100 million in FY 2020, while at the same time, just 24% said they apply quantitative financial modelling to make decisions about litigation, as they do in other areas of the business. That research is now a couple of years old, but it underscores both the need for litigation funding, and the challenge that funders face when trying to convince CFOs to think differently about litigation. Change may finally be afoot. A recent global survey of CFOs conducted by Everest Group found improving cash flow continues to be a priority for a large majority of CFOs. As one respondent noted: “As the business environment continues to throw up shocks prompted by geopolitical uncertainty and sector disruption, CFOs should ensure that, as well as technological evolution, change management becomes a culture rather than a one-off exercise.” Indeed, macroeconomic constraints are forcing CFOs to re-prioritize. Gartner recently identified the Top-10 priorities for CFOs in 2023, based on Deloitte’s Autumn 2022 European CFO survey. The Top-5 among those are:
  • Coping with complex systems
  • Protecting margins and balance sheets
  • Acquiring and retaining talent
  • Raising capital
  • Finding focus
The second point stands out in relation to litigation funding—“protecting margins and balance sheets” is exactly the pitch that funders have been making to the CFO community for years now. PricewaterhouseCoopers conducted its own survey, and highlights the main topics on the CFOs agenda for 2023:
  • Navigate economic uncertainty
  • Enable growth
  • Take action on ESG
  • Accelerate transformation
  • Cultivate finance talent
  • Build trust and purpose
Responses such as ‘navigate economic uncertainty’ and ‘accelerate transformation’ should be music to every litigation funder’s ears. It’s clear based on the above data that litigation funding maintains a product/market fit, in that it addresses some of the core pain points CFOs are currently facing. That said, many CFOs still need to be brought to the table as to how their firms can benefit from the use of litigation funding. Advantages of Unlocking Capital Buried in Legal Claims Susanna Taylor, Head of Investments at Litigation Capital Management, highlights what she considers to be four core benefits of litigation funding for CFOs:
  1. Protecting the value of the business from the cost impact of litigation
  • “If the same case was financed by a third-party funder, then the business will not carry these legal expenses […] The operating profit in each year will be higher and the accounts will be a more accurate reflection of actual business performance.”
  • “Further, once the claim is successful, the company will be able to include the proceeds as profit which has been generated at zero cost.”
  1. Protecting the business from significant litigation risk
  • “The funder carries 100% of the financial risk involved in pursuing the claim and if the claim is unsuccessful, the funder will receive nothing. […] Litigation finance can include the offer of an indemnity against adverse costs and an agreement to meet an order for security for costs.”
  • “Using third-party litigation finance also removes uncertainty in forecasting legal spend, which can be highly variable and difficult to predict.”
  1. Insulating the business from unexpected claims
  • “Litigation brought against a company is an unwelcome consequence of doing business. These claims are almost always unexpected, unbudgeted and require action.”
  • “Importantly it offers the corporate client the opportunity to offset the costs and risks involved in defending claims, as well as allowing the business to apply its capital into growth operations rather than on uncertain litigation.”
  1. Unlocking the value that resides in claims
  • “Litigation finance allows companies to recognize the value in a piece of litigation at a time which suits them best.”
  • “These funds provided to the company can ‘plug the gap’ in expected EBITDA at no cost to the company.”
In an article for Global Banking and Finance Review, Ellora McPherson, Managing Director & Chief Investment Officer of Harbour Litigation Funding, points to the need for CFOs to consider alternative solutions in order generate value, which is especially true during today’s tumultuous economic climate. According to McPherson: “The macroeconomic lifecycle has no bearing on the outcome of disputes and litigation as an asset class itself it has little correlation to the wider market. This means that litigation funders have the capital to pursue meritorious claims at difficult times even when the businesses with the claims do not.” Commercial disputes are often worth tens or hundreds of millions of dollars. These legal claims are simply too valuable as assets not to be leveraged during times of economic upheaval. “It is now no longer a question of whether CFOs can afford to advance these claims,” says McPherson, “but whether they can afford to ignore these assets on their books any longer.” How CFOs Should Approach Funders If CFOs are to be swayed by the high-level arguments posed by funders as to the advantages of legal finance, they must first get comfortable with frontline interactions—what exactly should CFOs expect from a litigation funding partnership? What should they be on the lookout for, and what sets one funder apart from another? The lowest-hanging fruit answer here is cost of capital, but that is obvious. Beyond mere capital requirements, lies a plethora of differentiators which CFOs must account for when approaching and selecting the most appropriate funder for their legal claim (or portfolio of claims):
  • Flexibility. CFOs should select a litigation funder who will be their partner, not just their capital provider. Similar to an agreement with a lender, CFOs don’t want a funder who will balk the moment a curveball is thrown, especially if that curveball comes from somewhere out of your control (as is often the case with legal claims). Funder flexibility and adaptability is an important trait when considering the long-term relationship at stake.
  • Funder Capitalization. Per the aforementioned point, legal claims often take longer than anticipated, or tumble down rabbit holes no one saw coming. Does your funder have enough liquidity to backstop unforeseen circumstances? What is their policy during such a contingency? These are critical questions to ask.
  • Legal Sector Expertise. This is important for two reasons: firstly, so the funder understands the bespoke challenges posed by a given sector and doesn’t get cold feet should the case run up against those issues along the way, and secondly, so the funder can help consult on case strategy, should the claimant and law firm request (most funders are ex-lawyers, after all).
  • Enforcement. Winning a case is one thing, but collecting on the reward is quite another. Does the funder have a track record of enforcing victories—either via a third-party or in-house enforcement team?
  • Reputation. CFOs should consult with past clients to get a sense of how the funder interacts with both the client and the law firm. This is a triangular relationship, and it’s important that all sides work together towards a successful outcome.
Ultimately, Litigation Finance offers an opportunity to monetize what would otherwise remain an illiquid asset, and deploy that capital into a core business activity, thus increasing the enterprise value. That is an invaluable tool for any CFO looking to unlock value without having to resort to traditional capitalization methods, such as approaching lenders or equity partners. The CFO Roadmap Even companies with ample cash to cover attorney fees and expenses can benefit from the instant liquidity provided by litigation funders. Why wait years to unlock the value of a legal claim, when that capital can be put to work immediately? What’s more, the prevalence of litigation funding permits corporations to pursue litigation that they would otherwise leave on the table, and also to reject low-ball settlement offers which they might otherwise accept due to concerns over duration risk and case expense. For CFOs who want to understand if their firm is a strong candidate for litigation funding, there are several steps they can take:
  • Review the company’s litigation history. Have prior legal costs or outcomes influenced management’s thinking about pursuing potential legal matters? Perhaps it is time for a reevaluation of the firm’s approach to litigation.
  • Consult with internal legal staff to identify any matters that may have been deferred for one reason or another, and assess whether those prospective claims might represent strong candidates for litigation funding.
  • Speak with litigation funders or advisory firms to determine a full cost/benefit analysis, including estimates, milestones, duration risk, IRR/ROI potential, and more.
  • Understand the internal resource commitment your team is making, should you take on additional litigation with the help of a funder.
CFOs who follow the above roadmap stand to benefit by repositioning their legal department from a cost center to a profit center. This simple shift in mindset will help strengthen the balance sheet by producing higher net income, lower expenses, and an advancement of business strategies—all without the onerous conditions of a traditional loan.
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Announcements Commercial Deals

GLS Capital and Nanoco Group Announce ‘Transformative’ $150 Million Settlement of Nanoco v. Samsung Patent Litigation

 GLS Capital, one of the world’s largest private investment firms focused on litigation finance, announced today its financial partnership with Nanoco Technologies in its patent litigation against Samsung Electronics Co. in U.S. District Court and related proceedings in the U.S. Patent and Trademark Office (USPTO), Germany and China.

Shortly before the start of trial in the U.S. District Court case, the parties agreed to stay the proceedings to finalize a settlement agreement. Samsung has now agreed to pay $150 million to settle the litigation in a deal called “transformative” by Nanoco that includes a license agreement and the transfer of certain patents.”

Nanoco (LSE: NANO) is a pioneer and world leader in the development and manufacture of cadmium-free nanoparticles known as quantum dots. Nanoco alleged that Samsung’s QLED televisions infringe several fundamental Nanoco patents related to the synthesis and use of quantum dots. The Nanoco v. Samsung dispute also included the successful defense of five Inter Partes Review petitions in the USPTO, in which all challenged patent claims were upheld.  On January 6, 2023, Nanoco announced that a term sheet for settlement of the litigation had been agreed to.

Adam Gill, Managing Director at GLS Capital, stated: “We were proud to support Nanoco in obtaining the recognition and compensation they deserve for their fundamental inventions.  Nanoco is a true pioneer in its field.  Its foundational technology allows quantum dots to be made without the use of toxic heavy metals like cadmium, enabling displays like Samsung’s QLED televisions to be brighter, more brilliant and environmentally friendly.”

Nanoco CEO Brian Tenner said: “Litigation finance allowed us to pursue our claims on equal footing against a much larger adversary.  We chose GLS Capital because of their reputation not only as intellectual property subject matter experts, but also as reliable and trustworthy partners. We are grateful for their assistance throughout the course of the litigation, which we believe added substantial value.”

About Nanoco Group PLC: Nanoco is a pioneer and world leader in the development and manufacture of cadmium-free quantum dots and other specific nanomaterials emanating from its technology platform.  Nanoco's CFQD® quantum dots are free of cadmium and other toxic heavy metals and can be tuned to emit light at different wavelengths across the visible and infrared spectrum, rendering them useful for a wide range of applications including displays, lighting and biological imaging.

About GLS Capital:  GLS Capital is a commercial litigation finance firm with more than $500 million under management. Founded by litigation finance industry veterans, GLS focuses on investments in complex commercial litigation and arbitration, patent infringement litigation, and life sciences litigation. GLS prides itself on decision-making speed and the pace of its investment process. Armed with a broad investment mandate and fully discretionary capital, all investment decisions are made internally by the GLS investment committee, which provides certainty and transparency for counterparties throughout the investment lifecycle. More information about GLS Capital can be found at www.glscap.com.

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Case Developments Commercial

Court of Appeal Rules in Favour of Harbour in Dispute With Panamanian Foundation

As is always the case in litigation funding, a victory in the courts is not truly a success until judgements can be enforced and financial returns collected. A recent ruling in the Court of Appeal reinforced this principle, as Harbour received a favorable ruling from the court confirming its right to priority in the repayment of funds. The ruling, which is detailed on Casemine, was handed down by the England and Wales Court of Appeal (Civil Division) on January 20 and rejected an appeal by Phoenix Group Foundation, a Panamanian foundation which contested that it should hold that right as assignee. The denial of this appeal is the result of previous litigation which saw Harbour provide funding for commercial litigation by the “Orb Claimants”, which ended in a successful result for the claimants. Phoenix had argued in its appeal that any distribution of funds from the litigation fell under the terms of its Liquidation Inter-Creditor Settlement Agreement (LICSA). However, the court ruled against Phoenix’s appeal, and affirmed the order given by Mr Justice Foxton in the High Court of Justice, in May 2021. This ruling demonstrates the extended timeframes that funders have to work with in order to realize a return on their investment, given Harbour’s original investment in the commercial litigation dated back to July 2013.
Commercial

Leaders from Burford, GLS and Omni Bridgeway Speak at PTAB Masters

Patent infringement litigation has been at the forefront of the litigation funding industry, with high profile disputes over disclosure and the role of third-party funding coming into the spotlight. The role of the Patent Trial and Appeal Board (PTAB) has also come under scrutiny, and an event hosted this week hosted industry leaders from law firms and funders who discussed the future of patent disputes. An article by IPWatchdog recapped their Third Annual PTAB Masters program held in Ashburn, Virginia. The two-day event’s agenda included sessions on the best path for reforming the PTAB, a panel sharing the perspectives of Administrative Patent Judges (APJs), and a discussion on patent assertion and funding strategies featuring leaders from some of the industry’s most established funders. The latter panel session saw speakers from Burford Capital, GLS Capital and Omni Bridgeway all provide their insights into the challenges faced by patent owners. Omni Bridgeway’s Sarah Tsou spoke to the process of inter partes reviews (IPR), describing it as an opportunity rather than an obstacle for funders and their clients, as it allows them to prove the validity and value of their patents, which increases the likelihood of success. Joel Merkin, principal at GLS Capital, highlighted the risk/reward calculation when it comes to final written decisions (FWD), as they represent a significant advantage when given in favour of the patent owner. Raising the potential challenges created by the PTAB, Burford Capital’s Chris Freeman stated that there was always a high degree of uncertainty as to what direction the PTAB will take, regardless of the funder’s own assessment of a patent’s validity.
Commercial Deals

Omni Bridgeway’s Co-Chief Investment Officer Shares Industry Outlook

As litigation funding in the U.S. looks to have another strong year ahead with the volume and breadth of investing continuing to increase, industry leaders are sharing their outlook on the state of the market. In a new interview, Omni Bridgeway’s Co-Chief Investment Officer shares his perspective on a range of topics including the evolving relationship between funders and law firms, prevailing misconceptions about third-party funding and the challenges of judgement enforcement. Interviewed by Massachusetts Lawyers Weekly, Jim Batson, managing director at Omni Bridgeway, provided an overview of how litigation funding continues to evolve. Looking at partnerships with law firms, Batson reports that Omni is increasingly seeing law firms working on lawsuits on a partial or full contingency basis. This has created further opportunities for the funder to provide portfolio financing to law firms, thereby unlocking capital that can be deployed for a variety of business purposes, while still allowing Omni to achieve a suitable return on investment. Batson highlights that now is more important than ever for funders to provide expertise and strategic guidance to their clients beyond the actual financing requested, pointing to judgement enforcement as an area where Omni’s dedicated team can bring real value to clients in challenging situations. Batson also recognized the challenges that still remain for the industry due to common misconceptions around the practice, such as the idea that funders exert control over the litigation process, when in reality, their role is limited to an advisory capacity.
Commercial Regulatory Issues

UK Litigation Funding Market Could See Growth if EU Imposes Restrictions

The shadow of the Voss Report’s recommendations looms over the future of litigation funding in Europe, as firms evaluate where the best opportunities will be in 2023. As some in the industry fear that overly zealous regulation of the practice could seriously hamper funder activity in the European Union, there is growing speculation that the United Kingdom could be one of the largest beneficiaries if the report’s proposals are enacted. Writing in City A.M., Glenn Newberry, head of litigation at Eversheds Sutherland, offers an optimistic outlook for the potential growth of Litigation Finance in the UK. Newberry points out that there is still an issue with policymakers maintaining misconceptions about third-party funding, particularly around the idea that funders are predatory investors who seek to control litigation while exploiting plaintiffs for their own financial gain. Newberry highlights that the use of litigation funding is far broader than simply financing class action cases, and instead has become a multi-faceted tool which can be used by companies to pursue meritorious litigation. He argues that with the variety of funding options and different types of fee arrangements, the practice has become a sophisticated asset for the legal industry, and one that requires investors to take on commensurate risk in return for their potential return on investment. If Europe does move forward with restricting the use of litigation funding, Newberry suggests that this should only encourage the UK to create a welcoming market to benefit claimants, law firms and investors.
Commercial Deals

Litigation Funding as a Valuable Tool for HNW Individuals

When it comes to individuals taking advantage of litigation funding, it is most often thought of through the lens of class action lawsuits being brought by individuals or collectives against corporations or institutions. However, one area that has received less attention is the utility of litigation finance for high-net-worth individuals (HNWIs) who are looking for capital to fund their own disputes. In a new piece for WealthBriefing, Catherine Penny and Elizabeth Butler of Stevens & Bolton, argue that the current economic climate may put a strain on individual finances, and third-party funding can be a valuable tool to allow HNWIs to pursue meritorious lawsuits with the use of outside capital. The authors highlight that the scope of use for litigation funding has significantly widened over recent years, and now represents a viable option for a range of litigation including fraud disputes or asset recovery proceedings. Analyzing the qualities that HNWIs should look for in a funder, Penny and Butler suggest that choosing a funder who is a member of a reputable network, such as the Association of Litigation Funders (ALF), will offer potential claimants increased confidence in their services. Furthermore, HNWIs should focus on funders who have a proven track record of financing the sort of claim that they are looking to pursue, and depending on the importance of speed, they may also want to enquire about the length and extent of due diligence that an individual funder will require.
Commercial Regulatory Issues

Increased Transparency in Litigation Funding Could Aid Policymakers

Calls for increased transparency in the litigation finance industry are being brought by opponents of the practice, with the aim of forcing funders to disclose detailed information around funding agreements that they would prefer to remain confidential. A new op-ed argues that a measured and appropriate level of transparency would enable lawmakers to develop smart policy informed by accurate data and avoid potential issues caused by one party having less thorough disclosure requirements. Writing in Bloomberg Law, Michael Menapace, non-resident scholar at the Insurance Information Institute, and partner at Wiggin and Dana, provides an argument in favour of increased transparency in litigation finance in order to address the lack of a unified legislative framework to regulate the industry across the U.S. Referencing the recent GAO study that highlighted the lack of current and verifiable data around litigation funding, Menapace points out that both legislative and judicial decision-making around the use of third-party funding could be improved by increasing the availability of such data. Menapace also suggests that under the current structure, plaintiffs are at an unfair advantage because defendants must disclose any legal liability insurance they have in place, whilst plaintiff funding does not face the same requirements, resulting in an imbalance when it comes to parties evaluating pre-trial settlements. Furthermore, Menapace argues that without transparency, there is the inherent possibility of conflicts of interest, due to funder involvement remaining undiscovered, and therefore negatively impacting the judicial process.
Announcements Consumer

Risk Settlements Announces Name Change to Certum Group

Risk Settlements, which provides bespoke solutions for companies facing the uncertainty of litigation, has changed its name to Certum Group. Latin for “certainty,” Certum represents the core benefit the company delivers to its clients across its entire suite of solutions. “Our new name represents our mission of bringing certainty to the uncertain world of litigation through our proprietary risk transfer platform,” said Joel Fineberg, managing director. “By using risk transfer of known, threatened, or pending litigation or judgments, we help our clients win more by risking less.” Certum Group has created the first and only litigation risk transfer platform that combines insurance, premium finance, and litigation funding to provide tailored solutions for companies, litigants, and law firms. Founded 10 years ago, the team is comprised of former litigators, judicial clerks, actuaries, and financial professionals who design risk transfer and funding solutions to meet legal, business, and financial objectives. Certum Group’s suite of products includes litigation funding for companies and law firms, claim monetization for known or latent litigation assets, and judgment preservation insurance (JPI) to guarantee the recovery of large judgments being appealed. It also includes portfolio “wrappers” to ensure that an entire group of cases will prevail making monetization or funding possible, class action settlement insurance (CASI) which removes the uncertainty of claims-made settlements, and litigation buyout insurance (LBO) that shifts the outcome of contested litigation from the defendant to a large insurance carrier. Depending on the client’s goals, these solutions are offered stand-alone, or in combination with each other. About Certum Group Certum Group provides bespoke solutions for companies facing the uncertainty of litigation. We are the leader in providing comprehensive alternative litigation strategies, including class action settlement insurance, litigation buyout insurance, judgment preservation insurance, adverse judgment insurance, contingency fee insurance, capital protection insurance, litigation funding, and claim monetization. Our team of experienced former litigators, insurance professionals, and risk mitigation specialists helps companies remove the financial and operational volatility arising out of litigation by transferring the outcome risk. Learn more at www.certumgroup.com.
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Consumer

CNN Report on Personal Injury Advertising Trends

In 1977, the United States Supreme Court ruled that legal advertisements are protected by the first amendment. The court highlighted that restrictions on legal marketing hampered access to justice “particularly for the not-quite-poor and the unknowledgeable.” The 1980s spawned a renaissance in attorney advertising, and today, the market for legal advertising tops well over $1.2B a year in the United States. CNN Business reports that many personal injury firms are seeking to advertise to the public, in a bid to attract attention with clever TV commercials and newspaper promotions. Direct response methods are even engaged to target potential clients who are currently in the hospital recovering from injury. Hedge funds and savvy litigation investment networks invest vast sums of capital to attract business in the personal injury market, according to CNN.  The U.S. Chamber’s Institute for Legal Reform (a longstanding opponent of the litigation funding industry) claims that aggressive attorney advertising is problematic and can increase the number of frivolous lawsuits. In contrast, CNN reports that the overall amount of claims filed in the United States is declining, partly due to stricter state laws to curb social inflation, and also due to the increasing cost of bringing cases to court. That latter point is exactly why consumer legal funding exists in the first place. 
Commercial Deals

Swedish Funder Backs Claim Against Investment Bank

Litigation funding continues to be one of the best tools available for individuals to seek legal redress against large corporations and institutions, where they would otherwise be outmatched by the weight of legal resources these organizations can finance. This is once again the case, as a Swedish business leader has received funding for his case against one of Sweden’s prominent investment banks. Realtid covered the news that Kapatens, a leading Swedish litigation funder, is backing Lage Jonason’s claim against Mangold Fondkommission. The lawsuit centres around allegations by Mr. Jonason that Mangold unlawfully executed a forced sale of shares that Jonason had pledged as security. The sale of these shares in one company, which reportedly took place mostly in a single day, resulted in a massive 86 percent drop in the value of the company’s shares.  Jonason’s claim alleges that the shares which were forcibly sold for a value of 20 million SEK, were previously valued at 150 million. Kapatens is funding the claim which is valued at approximately 99 million SEK, with the case being led by Nybron Advokater, a Stockholm-based boutique law firm.
Case Developments Commercial

Appeals Court Denies J&J’s Attempted Use of Bankruptcy Protection to Stop Cancer Lawsuits

In an update to one of the most significant sets of class action suits, Johnson & Johnson has been denied by an appellate court after it attempted to prematurely end class actions through the use of bankruptcy procedures. An article by Bloomberg covers the latest development in the ongoing series of lawsuits being brought against J&J by cancer victims, who allege that the company’s ‘tainted talc’ baby powder led to their cancer diagnosis. The federal appeals court in Philadelphia found that J&J was not allowed to block these cases, numbering over 40,000 lawsuits, by placing an individual business unit (LTL Management) into Chapter 11 bankruptcy. The panel of three judges ruled that J&J’s attempts to provide LTL protection under the bankruptcy code was not legitimate, given that the business was not faced with immediate financial danger. Leigh O’Dell, principal at Beasley Allen law firm, is leading thousands of these cases for cancer victims and stated that the panel’s ruling opened ‘the doors to the courthouse’ and condemned J&J’s ‘cynical legal strategy’. J&J is allowed to appeal the ruling, and if they are once again denied, will still have the option of appealing its case to the Supreme Court.
Commercial Legal Innovation

Enabling Social Impact Litigation Funding Through Tokenization

The use of the blockchain and the tokenization of litigation funding has been promoted by many parties as the next step in the digital transformation of the industry, unlocking new avenues of access to justice. In a recent post, one industry thought leader puts forward the argument that this technology can also be used to increase opportunities for litigation funding as a vehicle for social impact, and increase the potential for nonprofit legal funding. In a post by Aurelia Le Frapper, co-founder of blockchain litigation funding platform No Impunity, the potential benefits of tokenized litigation funding are outlined. Le Frapper highlights that by using fractional non fungible tokens, the ownership and funding of an individual lawsuit can be distributed more widely, and create more opportunities for impact investors to finance social impact lawsuits. Le Frapper also points out that this approach can increase the number of lawsuits that are able to be financed, by using a crowdfunding approach that brings a larger number of small value investors together. The article also describes a number of benefits enabled by this approach, including additional transparency provided by the blockchain, more efficient distribution of settlement funds and a more streamlined ability to ensure regulatory compliance through the tamper-proof blockchain records.
Commercial Regulatory Issues

Legal Professor Refutes Arguments Against Foreign Funding of U.S. Lawsuits

Among the various criticisms faced by the litigation funding industry, one that has found a resurgent voice in recent months has been the claim that allowing third-party funding of lawsuits in the U.S. is a threat to national security where foreign investors are financing lawsuits. This critique has been leveled by the Chamber of Commerce and a cadre of lawmakers, but in a new opinion piece, a top legal scholar seeks to combat these assertions. Writing for The Hill, M. Todd Henderson, Professor of Law at the University of Chicago Law School, argues that policy proposals which seek to curtail third-party funding only create an environment of ‘financial isolationism’ and would, in reality, have a negative impact on the U.S. economy and legal system. Henderson begins by returning to the guiding principle behind litigation funding, that a lack of financial capital should not be a barrier to entry for those seeking legal redress, and that the identity of the funder does not affect the merit of the case being brought. The op-ed also refutes the claim that litigation funding could jeopardize national security secrets, pointing out that not only are funders passive investors in the litigation process, but also if there are concerns around classified material, the courts have the ability to maintain that security through mechanisms such as protective orders. Additionally, Henderson points out that the U.S. is already a beneficiary of around $5 trillion in foreign direct investment, according to IMF data, and this particular industry should not be unjustly excluded from foreign investment that is actively welcomed in the wider economy.
Commercial Special Features

Key Takeaways from LFJs Special Digital Event: Key Trends and Drivers for Litigation Funding in 2023

On January 25, 2023, Litigation Finance Journal hosted a special digital event: Key Trends and Drivers for Litigation Funding in 2023. The hour-long panel discussion and audience Q&A was live-streamed on LinkedIn, and featured expert speakers including William Farrell, Jr. (WF), Co-Founder, Managing Director and General Counsel of Longford Capital, Laina Hammond (LH), Co-Founder, Managing Director and Senior Investment Officer of Validity Finance, and Louis Young (LY), Co-Founder and CEO of Augusta Ventures. The discussion was moderated by Rebecca Berrebi (RB), Founder and CEO of Avenue 33, LLC. The discussion spanned a broad spectrum of key issues facing the litigation funding industry in 2023. Below are some key takeaways from the event: RB: How does your underwriting change, given the varied risks across different legal sectors? Do you have different IRR requirements for different case types or jurisdictions?   LH: At various points in time in our process, we are going to be assessing the risk of total loss. Antitrust, treaty arbitration, patent cases are riskier. When we’re calculating expected risk of loss, we take into account the various factors that make a case more risky—jurisdiction, collectability, other factors that dictate the IRR range. That is how we tie the risk factor to IRR, so the returns reflect the risk commensurate for any situation. WF: At Longford, our underwriting process remains the same across all legal sectors.  But risk assessment is unique across opportunities.  We look at 50 different characteristics for risk assessment.  At Longford, and I imagine the same is true at funders like Validity and Augusta, there is a very strong demand for our financing, so we are able to pick only the most meritorious cases, rather than pricing risk for a range of cases. LY: We have a very controlled process in our underwriting, and it’s conducted in a very stock-standard framework. But that framework is a continual iterative process. Our underwriting changes as we resolve cases through wins and losses, where you learn things that you didn’t know in underwriting. If we had to build a portfolio like we did for our first portfolio, which was 60-70 investments with $200MM invested—if that took us three years to build at the time, it would take us four or five years now, given the fact that we’ve learned so many other things as we’ve invested. Changes in financial modeling have become far more complex and nuanced as to the particular cases, so the outcomes and scenarios that we run now are far more detailed. RB: The last prolonged recession helped jumpstart the litigation funding industry in the US. If we do have a prolonged recession, what do you see as the prospects for the industry this time around? Can we expect the same growth post-recession?  LH: I think it’s tricky to accurately predict the impact of recessions on specialty industries like Litigation Finance, especially when the recession arises out of complicated geopolitical factors. That said, it’s entirely likely that a recession provides a boost for demand.  Legal services will always be in demand, and the cost of legal disputes is going to continue to rise. In tough economic conditions, companies might be pushed to consider litigation finance as an alternative to the self-funding that they historically use for their litigation. This could also lead to an infusion of capital into the market, as investors look for ways to diversify into alternative assets that are uncorrelated to the broader market. LY: I don’t know if the last recession did jump start the industry. I remember one of the first trips I did across the U.S. – this was around 2014 or so. And there were a whole set of law firms who didn’t know about litigation funding, so they were taking on the risk themselves—they were in effect acting as litigation funders. I think what really spurred litigation funding was the entrepreneurial bent of these law firms, who said to themselves ‘ok we’ve been taking this risk on for our clients, and here is a way we can de-risk ourselves.’ It was that mindset, and it happened so quick. In 2014, I introduced myself, and it was like, ‘Nice to meet you, here’s the door.’ Then two years later, it was happening. You just had very savvy, sophisticated people within the law firms who saw litigation funding for what it was, and they’ve become champions of it. And those same law firms are championing litigation funding even more now, and that will spur the industry forward. RB: What insurance products look most interesting right now, and are there any you’d like to see in the future? WF: Over the past two years, the insurance industry seems to have identified our industry as a new and attractive source of business for the insurance industry. There are significant synergies and similarities between litigation finance investments and insurance products, and for the moment, insurance markets seem to be most comfortable placing insurance on judgement preservation, and that is because they perceive cases at that stage of the lifecycle to be more easily understood, evaluated, and priced. But other products are popping up every day—insurance wrappers, which can be around an entire fund, or offer judgement preservation or principal protection, or they could be more bespoke and wrapped around particular subsets of investments. Offering insurance products for individual investors within a fund, uniquely designed for that particular investor’s risk tolerances is on the horizon, and will be made available to investors and funds in our industry. At the end of the day, the costs of these products will be most important in determining whether the Litigation Finance industry will be able to find a way to work with the insurance industry. The cost of these products will be taken directly from the returns that might otherwise be achieved without insurance, and the evaluation of these costs against the risk that is being protected against, is what will determine whether insurance becomes a meaningful part of our business. RB: What are your thoughts on the 60 Minutes piece, and the resulting publicity for the industry? Is this a net-positive—all publicity is good publicity, or would the industry benefit from being more under-the-radar, as there might be a mainstream outcry over a single bad actor that could malign the entire industry? WF: The Litigation Finance industry has made great strides over the past 10 years, particularly when it comes to awareness and acceptance of our offerings among all of the effected constituencies. Litigation Finance also levels the economic playing field, to where disputes among companies are resolved on the merits, rather than on the financial wherewithal and strengths/weaknesses of the litigants. So it’s good for the legal system. I think that the more awareness we can achieve, the more acceptance and more use we will see. I am opposed to flying under the radar—I like the idea that the more that people know about our industry, the more they will see that we are doing good, because we are helping people access justice which might not otherwise be there for them.
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Announcements Consumer Deals

Amicus Capital and RapidFunds Announce Strategic Partnership

Katonah NY. Modeso LLC D/B/A Rapidfunds (“RF”), today announced that they have signed an agreement with Amicus Capital (“AC”), a prominent investment firm in the legal financing market, establishing a partnership to provide financing to law firms throughout the United States. Through this partnership, RF and AC will market each other’s services to existing and prospective law firms on a nationwide basis by leveraging their extensive databases of law firms. This partnership will provide significant benefits to both organizations, as well as the lawyers they serve. By pooling their resources, RF and AC will be able to offer a comprehensive suite of financing options to law firms of all sizes. In addition, the two companies will be able to share knowledge and best practices, giving both organizations a competitive edge in the legal finance market. “Bill Tilley is a pioneer and seasoned expert in the settlement finance market” stated Peter J. Speziale the Company’s CEO and President. “We believe this partnership will make both companies stronger and  will allow law firms to pursue financing with industry-leading terms.” About Rapidfunds: RapidFunds® was co-founded in 2004 by attorney Peter J. Speziale, as a solution to the cash flow problems contingent fee attorneys face. Running a law firm takes a lot of capital. Traditional lending institutions are generally not comfortable lending on contingent fee cases, and typically not to the extent necessary to resolve cash flow problems. Unlike these institutions, Rapidfunds fully understands the value of the assets contained in a law firm’s inventory of cases. About AMICUS Capital: More than two decades ago, Bill Tilley had a vision to mitigate the most systemic business challenge for law firms: wildly fluctuating cash flow. His solution was to apply business and finance philosophies to the legal industry, and in doing so, he ignited the litigation finance industry. Today, Amicus Capital Group is a leading provider of capital to law firms and attorneys, and Tilley’s pioneering work continues to shape the way that legal services are financed. By providing much-needed stability to the industry’s cash flow, Tilley has helped countless law firms to grow and thrive. In the process, he has changed the landscape of legal finance forever. AMICUS CAPITAL GROUP, LLC is a private finance company dedicated solely to the provision of innovative litigation finance and business services for trial lawyers. They are focused on stabilizing cash flow to increase growth, sustainability, and profitability. Amicus Capital Group offers savvy solutions at every stage of business, from financing litigation to managing expenses. By providing capital and expertise, they help law firms overcome the challenges of operating in an increasingly competitive marketplace. Whether you’re looking for working capital to grow your practice or ways to improve your bottom line, Amicus Capital Group can help.
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Case Developments Commercial

Justice Department Bringing Antitrust Case Against Google

Multinational technology companies are appearing as targets for antitrust lawsuits in several jurisdictions, with these tech giants facing scrutiny for how they may be misusing their dominant market positions. Whilst these antitrust cases have historically found more welcoming legal frameworks in Europe, an impending lawsuit against Google looks to follow that trend in the U.S. Reporting in CNET explains that the Department of Justice is bringing a lawsuit against Google in federal court, alleging that the company used its monopoly position to unjustly dominate the digital advertising market. This case follows similar legal actions in the UK and Europe, with Google accused of using anti-competitive practices to harm advertisers and publishers, as well as smaller competitors. CNET also reports that Google had sought to dissuade the Justice Department’s latest lawsuit by alleviating the concerns raised, having suggested that it would be “willing to split off its ad business.” This legal action has also drawn the attention of litigation funders, with LitFin announcing via LinkedIn that they are funding a group action against Google, and looking to represent media houses and publishers who have been damaged by Google’s actions.
Commercial Regulatory Issues

EU Representative Action Directive Could Generate New Opportunities for Funders

Analysis of regulatory development in the European Union has largely focused on the potentially negative consequences of the proposed changes outlined in the Voss Report. However, there is equal opportunity for the EU’s Representative Action Directive to generate a wave of group action activity across the continent, with funders able to capitalize on these forthcoming opportunities. In a piece of analysis on Bloomberg Law, Keir Baker and Chris Warren-Smith of Morgan, Lewis & Bockius, examine the potential impact of the directive and how it could shape the European class action landscape in 2023 and beyond. With member states required to amend their own laws to fall in line with the directive by 25 June 2023, the continent will soon see a greater degree of standardization in the regulation of representative actions. Of most interest to funders will be the provision in the directive that requires member states to allow the use of litigation funding, with the caveats that the source of funding must be disclosed if there are perceived conflicts of interest, and that the financing should not shift the action “away from the protection of the collective interests of consumers.” The authors note that states such as Cyprus and Ireland, where litigation funding has previously been heavily restricted, will be most likely to experience a surge in representative action opportunities for funders. Baker and Warren-Smith emphasize that whilst the directive is designed to provide a more unified set of guidelines, it does allow for individual member states to tailor their implementation of the rules. This will include the standards set out for the use of opt-in or opt-out regimes, as well as the minimum number of class participants required for it to move ahead. Therefore, this may create a new environment in which those looking to bring collective actions will pick their jurisdiction of choice more carefully, with countries like the Netherlands likely to be hotbeds of activity given their willingness to go even further than the bounds of the directive in creating an accessible framework for representative actions.
Commercial Deals

Crypto Bankruptcies Attract Interest from Litigation Funders

Once viewed as a bold new frontier for retail investment, cryptocurrency has suffered in recent times with huge declines in the value of certain currencies, alongside a number of crypto companies either collapsing or falling foul of scandals involving customers being misled and defrauded. However, as many industry analysts have been speculating, it seems that the resulting bankruptcy filings of crypto firms is drawing the attention of litigation funders who may look to fund consumers’ claims and generate significant returns on investment. Reporting by Pensions & Investments discusses the recent crypto bankruptcies of companies such as Genesis and FTX, noting that the fallout from these collapses is likely to draw investor interest in related litigation. Commenting on the potential litigious activity, Brandon Baer, CIO of Contingency Capital, stated that the firm was looking at potential claims in this space, but there was not complete clarity at this stage as to how different consumers will be classified, such as whether a customer who deposited cash with FTX will be treated equally with a customer who deposited actual cryptocurrency. Mr Baer also highlighted that Contingency was seeing an uptick in interest in litigation finance from institutional investors such as pension funds and foundations. He emphasized the fact that litigation funding retains a degree of separation from investment assets more closely tied to the stock market, and therefore it is viewed as an opportunity for institutional entities to further diversify their portfolio.
Commercial

London Litigators Spotlight Litigation Funding Among Top Disputes Trends

The current economic climate seems to represent a perfect storm of destabilizing factors, with countries still dealing with the after effects of the pandemic, inflation on the rise and the war in Ukraine affecting supply chains and more. As a result, litigators are predicting one of their busiest years yet in terms of disputes, and a panel of London’s top legal professions have offered their perspectives on what key trends we can expect to see in the year ahead. Detailed in Legal Business, nine of London’s leading dispute lawyers weighed in on what 2023 would have in store for the world of disputes. Summarizing the overall climate, Julian Copeman, disputes partner at Herbert Smith Freehills, compared the situation to the 2008 financial crisis, where it took a couple of years for disputes to gain momentum, and in the same way, Covid-related disputes are likely to become a more prominent feature than ever. Looking at individual trends, litigation funding is identified as one of the key beneficiaries of this surge in activity. Alex Sciannaca, litigation partner at Hogan Lovells, confirms that he has seen an increase in interest from clients towards pursuing third-party funding of their claims. Copeman also speaks to the growing maturity of the funding industry, noting that funders with a wide portfolio of cases are able to lower their risk profile and will continue to attract investment despite the poor economic climate.  Toby Robinson, a dispute resolution partner at Travers Smith, also highlights competition litigation as both a top trend and an attractive prospect for litigation funders, but does caution that claims which have issues establishing damages will be unlikely to attract outside financing. Linklaters’ global head of disputes, Alison Wilson, pinpoints ESG as a particularly fertile area for disputes in 2023, particularly around greenwashing claims and legal action being brought against governments. Other key dispute trends highlighted for 2023 include collective proceedings actions, crypto and blockchain litigation, and investigatory activity by regulatory bodies leading to more lawsuits.
Commercial

UK Funder Novitas to Write Off £90MM Over Unsuccessful Cases

An important reminder of the volatility of the funding industry has come into the spotlight, as a UK merchant banking group announced its litigation funding arm had failed to find success from its investment in cases. Reporting by The Law Society Gazette covered an update from Close Brothers Group announcing that its litigation funding business, Novitas, would be writing off £90 million from a portfolio of cases that had “limited prospects of successfully progressing through the courts”. This follows a decision in July 2021 by Close Brothers to withdraw from the litigation funding market, and not to pursue any new investments in the sector. Novitas was first acquired by the group in 2019, and was working with a number of different law firms when it suffered from a run of unfortunate events. According to reporting by the Gazette, Novitas had previously drawn the Financial Ombudsman’s (FOS) attention around its activity with solicitors, who allegedly pressured divorcing clients to enter into high-interest loans. Whilst this activity dated back prior to its acquisition by Close Brothers, it was only last month when Novitas was found by the FOS to have failed to execute adequate income verification on a borrower, and has been forced to repay both the interest and additional charges.