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Commercial Regulatory Issues

The State of Third-Party Funding in Asia

As the litigation funding market continues to grow more competitive, enterprising funders are keen to identify regions where there is still room to build a dominant market share. Of these regions, Asia stands out as an exciting prospect for funding growth, but remains a market that is not as accessible for international funders. In an article for the China Business Law Journal, Mariana Zhong, partner at Hui Zhong Law Firm, provides an overview of the current state of litigation finance in Asia. The article provides a detailed analysis of the existing rules governing third-party funding in different Asian jurisdictions, explaining recent developments across both litigation and arbitration funding, as well as highlighting some up-and-coming domestic funders in China. Looking at the current state of regulation, Zhong points out that many of the major arbitration institutions have introduced rules allowing for the provision of third-party funding over the last decade. These institutions include the Singapore International Arbitration Centre (SIAC), the China International Economic and Trade Arbitration Commission (CIETAC), the Beijing International Arbitration Centre (BIAC), and the Hong Kong International Arbitration Centre (HKIAC). However, Zhong also emphasised that there is little uniformity among these different institutions, with disclosure requirements varying significantly between CIETAC, which has imposed stringent disclosure rules, and SIAC, which requires a much narrower disclosure around the existence of funding arrangements. In terms of recent Chinese court rulings on the legitimacy of third-party funding, Zhong explains that there have been positive signs, such as Case No. (2022) Jing 04 Min Te No. 368, where the court recognised ‘that the parties’ choice to engage third-party funders was well within their legal rights.’ However, other rulings have raised issue with the presence of outside funding, including Case No. (2021) Hu 02 Min Zhong No. 10224, in which the court ruled against the legality of the funding arrangement due to concerns over the conflict between third-party funding and ‘with public order and good morals.’ Zhong notes that whilst the global market is still dominated by large international funders, the Chinese market has seen the emergence of a few firms who are hoping to meet the demand in this burgeoning market. She highlights Hou Zhu (Hold Capital) and Ding Song (DSLC) as two Chinese funders who are ‘rapidly maturing’ and ‘engaging zealously in domestic and Asian-wide funding activities.’
Case Developments Commercial

High Court Rules in Favour of Funders in Dispute with Bugsby Property

As LFJ reported last month, the effects of the Supreme Court’s PACCAR decision are already being felt in ongoing court cases, with disputes arising between funders and their clients. Following the High Court’s rulings granting asset preservation orders for both Omni Bridgeway and Therium in their disputes with Bugsby Property, the two funders have won yet another favourable decision. An article from CDR highlights a recent decision in the High Court of England and Wales in the case of Omni Bridgeway and Therium v Bugsby Property, where the court dismissed Bugsby’s application ‘for fortification of cross-undertakings in damages’ given by Omni Bridgeway and Therium.  Bugsby had argued to the court that it required some form of security for the cross-undertakings to ensure that both funders would honour their obligations. Omni Bridgeway and Therium had argued, in their opposition to the application, that there was no significant risk that either funder would fail to meet the obligations of those cross-undertakings and that Bugsby had not provided evidence for its claim for loss. In his dismissal of the application, Mr Justice Jacobs held that Bugsby’s claim for loss was “speculative” and stated that the company had “failed to establish a good arguable case that the claimed loss will be suffered in consequence of the injunctions sought.” In response to concerns that the funders would not honour the cross-undertakings, the judge noted that both Omni Bridgeway and Therium possessed substantial capital, and there was “no real doubt as to their ability to meet a liability for GBP 5.14 million between them.” Neil Purslow, chief information officer at Therium, provided the following comment on the High Court’s decision: “We are pleased that in addition to the Asset Preservation Order, the High Court has again found against Bugsby who failed to establish that there was a realistic prospect of them entering the litigation funding market, and that as the judgement says, any claimants relying on funds provided by Bugsby might have “additional reasons for being cautious” in light of Bugsby not paying Therium and another funder what it owes them.”
Commercial Special Features

Member Spotlight: Blake Trueblood

Blake Trueblood, a seasoned advocate and litigator, brings over eighteen years of experience to the forefront of the litigation finance industry. As co-founder of Invenio LLP, Blake has played a pivotal role in the firm's dedication to the emerging litigation finance sector. His extensive background includes serving as General Counsel for a group of litigation finance and claims management companies, where he assisted plaintiffs and law firms in various practice areas, from personal injury to mass torts.
Blake's entrepreneurial spirit led him to co-found and manage a Florida-based law firm, specializing in representing claimants in personal injury, discrimination, and commercial claims. His practice has catered to both individuals and businesses seeking just compensation. Beyond his legal expertise, Blake has earned the trust of entrepreneurs, Native American tribes, and media personalities. His insightful commentary on topics like litigation finance and Tribal economic development has solidified his reputation as a thought leader. Born in the Midwest and raised in Florida, Blake now splits his time between Washington, D.C., and Fort Lauderdale, where he has a home with his significant other Maria, their daughter Amber,  and his dog Bella, a chihuahua-beagle mix. As an enrolled member of the Choctaw Nation of Oklahoma, Blake is deeply connected to Native American culture and its economic development initiatives. In his free time, he's an avid hiker, runner, and Brazilian Jiu-Jitsu practitioner, holding a black belt since 2015, with a second-degree earned in 2021. Company Name & Description: Invenio LLP is a leading provider of legal services for those navigating the complexities of the litigation finance industry. Our founding partners have extensive experience in claimant funding, law firm lending, and litigation supported by third-party funding. We serve claimants, the law firms who advocate on their behalf, and the lenders and funders that provide the capital necessary to see justice through. Our lawyers bring a wealth of experience to the rapidly evolving litigation finance landscape. We’ve represented both plaintiffs and defendants in litigation, and immersed ourselves in venture start-ups and private equity ventures catering to plaintiffs, law firms, and claims development experts, giving us a unique blend of expertise suited to untangle the complexities of the litigation finance space and find solutions. Invenio is committed to increasing access to civil justice by helping plaintiffs of all types access courts and level the playing field against well-resourced defendants.  We believe litigation finance can be a force multiplier for plaintiffs and the firms that represent them. We aim to make the process of exploring and obtaining litigation finance clear, fair, and straightforward. Company Website: inveniolaw.com Year Founded: 2022 Headquarters: Invenio has joint headquarters in Washington, D.C. and Fort Lauderdale. Area of Focus: Invenio LLP is fully engaged in all aspects of the rapidly emerging litigation finance industry. The firm’s founding partners have each worked on multiple claimant funding and law firm loan transactions and have themselves litigated cases where law firm portfolio funding or third-party case funding was used. Our clients are law firms borrowing for their cases or portfolios, claimants seeking traditional third-party funding, lenders seeking assistance with underwriting and servicing of cases or portfolios of cases, and parties to disputes or workouts. We focus on Case & Portfolio Underwriting; Borrower & Claimant Side Representation; and Pre-Settlement, Post-Settlement & Medical Lien Funding. Member Quote: "We believe that litigation finance levels the playing field in the fight for access to justice, both for claimants and the attorneys and law firms that represent them on the front lines. Invenio LLP was founded on that principle, and we focus our efforts each day on ensuring that plaintiffs, their advocates, and the investors who fund their efforts get the guidance they need to navigate this complex industry."
Commercial Regulatory Issues

Lord Gold Argues Government Should Provide ‘Legislative Solution’ to PACCAR Issues

As we continue to watch the aftermath of the Supreme Court’s PACCAR decision play out in court cases and judgements, there remains the unanswered question of how the government will respond to calls for new regulations that will more clearly define the place of litigation funding agreements (LFAs).  In an op-ed for The Law Society Gazette, Lord David Gold, principal of Gold Collins Associates and investment committee chairman of Balance Legal Capital, argues that ‘it is crucial that the uncertainty created by this decision be urgently resolved.’ Lord Gold highlights the important role that legal funding plays in the UK’s civil justice system, suggesting that ‘the availability of third party funding for claimants boosts the UK courts’ status as a global legal centre.’ Given the ‘widespread market uncertainty’ caused by the PACCAR ruling, Lord Gold says that the court system will now be forced to dedicate a huge amount of time and resources to resolve all the issues around the enforceability of LFAs, ‘time which could be better allocated to dealing with other matters.’  Lord Gold argues that the best solution would be for the government to clarify the statutory position of LFAs as being separate from regulations governing DBAs, which Gold says is ‘consistent with the long held understanding of the legal market (and with the government’s original policy intent)’. He calls on the government to act swiftly, and states that a legislative fix would ‘restore contractual certainty, avoid unnecessary demands on court time and resources, and avoid disruption in the court system.’
Case Developments Commercial

Chinese Company Funding Four US Intellectual Property Lawsuits

Critics of the litigation finance industry in the US have often focused on the lack of transparency around the origins of this funding, specifically questioning whether foreign actors could use legal funding to undermine US government and business interests. In what can be viewed as a boost to these arguments, a US litigant has revealed that a Chinese company is funding four intellectual property cases. An article from Bloomberg Law provides a detailed overview of the news that Purplevine IP has provided funding for four lawsuits brought by Staton Techiya against Samsung Electronics Co. and Harman International Industries, a Samsung subsidiary.  Daniel Staton, chairman of Staton Capital (the majority owner of Staton Techiya), told reporters that Purplevine was first engaged as a funder through an agent that Staton had contracted to handle negotiations with Samsung.  After the judge in the case removed the agent due to their past working relationship with Samsung, Staton decided to continue the arrangement with Purplevine and “negotiated with them a deal going further.” Staton acknowledged the concerns that some would have over the presence of a foreign funder in the lawsuits, but explained that “once we got into it and dealt with them, they were gentlemen, they were professional, and we have a great working relationship.” Bloomberg Law’s reporting also highlighted the concern that Purplevine’s CEO, Victor Yang, is also employed by TLC Corp., a Chinese electronics company. Responding to the reporter’s inquiries, Mr Yang stated: “Purplevine is a management controlled IP firm. It funded the case out of its own decision, which has nothing to do with TCL.” Joe Matal, founder of Clear IP and former acting director of the USPTO, told Bloomberg that this revelation “is our worst fears confirmed,” and argued that “anything China does is concerning because nothing over there is really independent.” However, the International Legal Finance Association’s executive director, Gary Barnett, argued that opponents of litigation funding like the US Chamber of Commerce weaponize “the current craze around fears of China and the influence of other foreign adversaries,” in their efforts to seek increased regulation of third-party funding.
Announcements Commercial Fundraising

Apex Litigation Finance secures £20m funding agreement with Crestline Investors Inc

Just over four years since its launch, Apex Litigation Finance, a UK-based company providing litigation funding solutions, is thrilled to report that they have secured £20million funding from Crestline Investors Inc, an established provider of alternative investment solutions to support its growth and provide access to justice to more UK Claimants. With their concentration on investing in small to mid-sized commercial claims in the UK, Apex is dedicated to assisting claimants in accessing justice where they either lack the funds to proceed or are concerned about the financial risk of an unsuccessful lawsuit. With the number of applications for litigation funding rising and the solutions provided by litigation funding becoming widely accepted, Apex is rapidly becoming the litigation funder of choice, for companies, insolvency practitioners and individuals with small/midsize commercial claims. As part of their growth strategy, Apex has now embarked on a swift expansion that involves recruiting additional team members. Maintaining their flexible approach to recruitment, the company is highly focused on finding suitable candidates. The company is eager to connect with people who have a strong enthusiasm for its growth and ambitions, regardless of whether they are familiar with litigation funding, ATE, business development or have an extensive legal background. Speaking about the relationship with Crestline, CEO Maurice Power says: “I am thrilled to announce the funding facility with Crestline, which allows us to further establish Apex’s position as the litigation funder of choice for claimants with small/mid-size commercial claims in the UK. The Crestline facility will enable Apex to provide funding solutions, and access to justice, to claimants with meritorious matters that are deemed too small for other litigation funders.” Michael Guy, CIO Europe from Crestline Investors added “We are very supportive of “access to justice” agenda for less well funded claimants which is at the heart of Apex’s solutions and delighted to support Apex through its ramp-up and growth phase. Prospective applicants wishing to apply for a role are invited to contact Apex and send their most up-to-date C.V. and explain why they would be a great fit. enquiries@apexlitigationfinance.com. Crestline were advised by Emissary Partners and Reed Smith and Apex by KingsRock Namier Limited, a specialist advisor in the Litigation Finance sector. Apex Litigation Finance Limited Apex Litigation Finance Limited is a company which brings together experienced individuals from the litigation funding, legal and finance sectors to provide third party litigation funding to litigants (corporates, liquidators, and individuals) who are unable to pursue a claim due to the prohibitive cost of litigation. Although the litigant’s case may have merits, uncertainty over the total costs and the potential risk of being ordered to pay the defendant’s costs, should they lose the case, prohibits access to justice for many claimants. Following an assessment of the merits of the litigant’s case, Apex will commit funds to pay legal and other costs associated with the case in return for an agreed share of any award upon a successful conclusion. If there is no recovery, or if the case is lost, there is no debt for the litigant to repay. Email: enquiries@apexlitigationfinance.com Phone: 0208 012 7944 Website: www.apexlitigationfinance.com Crestline Investors Inc. Crestline Investors, Inc., founded in 1997, is a global institutional alternative investment management firm with approximately $17 billion in assets under management. Crestline is headquartered in Fort Worth, Texas, and maintains affiliate offices in New York, London, Toronto and Tokyo. The firm’s London-based affiliate Crestline Europe, LLP specializes in private capital investments in lower mid-market and mid-market companies, and asset platforms in developed markets of Western Europe, focusing on resilient industry sectors and asset backed investments. In respect of this investment please contact.
Commercial

Hedge Fund says Burford Capital is Undervalued by the Market

Much of the information about litigation funders’ business models is cloaked in confidentiality, making it difficult to assess how the rest of the market values those funders who are publicly traded. However, a recent investor letter from a hedge fund offers insight into the way investors view the industry’s top funders. In Greenhaven Road Capital’s ‘Main Fund Q3 2023 Investor Letter’, the boutique hedge fund has included a spotlight on its top holdings which includes Burford Capital, the publicly traded litigation funder. In the investor letter, Scott Miller, the founder of Greenhaven Road Capital, highlighted Burford’s recent win in the YPF case against Argentina which resulted in a multi-billion dollar award being ordered. Miller notes that whilst Argentina is likely to attempt to avoid paying the full award and therefore Burford will likely end up taking a discount on their portion of the award, he still believes that “the returns should be eye-popping.” Miller also argues that “if Burford is going to be successful, a few massive cases like YPF will drive a significant portion of the returns.” He goes on to explain his firm has “spent significant energy looking at other cases that Burford has funded,” and through this research has come to the conclusion that “there is reason to believe that Burford has line of sight to another multibillion-dollar award where collectability is far less of an issue than with YPF.” Based on this research and on Burford’s previous successes, Miller concludes his analysis by saying that he believes “Burford is worth far more than the $13 per share Mr. Market has ascribed to it.”
Announcements Commercial Regulatory Issues

Burford Capital, PLI Press Publish Comprehensive Reference on Commercial Legal Finance

Global legal finance company Burford Capital announces the release of a new book providing an indispensable overview of the industry and practical introductions to the use of commercial litigation and arbitration finance in key jurisdictions worldwide. Published by PLI Press, a division of Practising Law Institute, Commercial Legal Finance addresses key questions about legal finance structures, pricing, and mechanics, providing a step-by-step overview of the process for obtaining legal finance. Covering key jurisdictions including the US, England & Wales, Europe, Asia, and Australia, the book addresses ethical considerations for litigants and lawyers, key considerations for commercial litigation, patent litigation and arbitration financing, and a legal finance glossary of terms. “In-house counsel with responsibility for litigation and arbitration, as well as law firm practitioners advising clients in this area, can benefit from a comprehensive reference to the commercial legal finance industry that offers practical guidance on the mechanics of litigation and arbitration finance in key jurisdictions and practice areas around the world,” says David Perla, Co-Chief Operating Officer at Burford Capital, who co-edited the treatise with Co-Chief Operating Officer Aviva Will and Burford’s Suzanne Butters. For more information and to order, visit pli.edu. About the Author Burford Capital is a leading global finance and asset management firm focused on law. Its businesses include litigation finance and risk management, asset recovery and a wide range of legal finance and advisory activities. Burford is publicly traded on the New York Stock Exchange (NYSE: BUR) and the London Stock Exchange (LSE: BUR), and it works with companies and law firms around the world from its offices in New York, London, Chicago, Washington, DC, Singapore, Dubai, Sydney, and Hong Kong. About Practising Law Institute (PLI) Founded in 1933, Practising Law Institute is a nonprofit learning organization dedicated to keeping attorneys and other professionals at the forefront of knowledge and expertise. PLI provides accredited, continuing legal and professional education programs delivered by more than 4,000 volunteer faculty, including top experts across practice areas. Additionally, PLI publishes a comprehensive library of treatises, course handbooks, answer books, and journals, also available through the PLI PLUS online platform and app. The essence of PLI’s mission is a commitment to the pro bono community. Based in New York, PLI also has an office and Conference Center in San Francisco. Visit www.pli.edu to learn more.
Case Developments Commercial

$180 Million Settlement Reached in Australian ‘Stolen Wages’ Class Action

There are few cases that epitomize the idea of litigation funding providing ‘access to justice’ than those lawsuits which represent indigenous communities who have suffered harm at the hands of their government, and which seek to provide compensation for these people. The announcement of a settlement in the Stolen Wages class action in Australia represents the tangible positive impact that funders can have when their capital is dedicated to achieving legal redress for those communities who have suffered discrimination and persecution. In a post on LinkedIn, Litigation Lending Services (LLS) announced that the Western Australia (WA) government had agreed to a settlement in the class action brought on behalf of thousands of Aboriginal Australians who were not paid part or all of their wages between 1936 to 1972. The state government agreed to pay up to $180.4 million to eligible workers or their surviving relatives who were affected by the discriminatory legislation in WA.  The class members were represented by Shine Lawyers, with LLS providing funding for the litigation. As part of the settlement, the WA government will issue a formal and public apology in the state parliament, addressed to both surviving and deceased Aboriginal workers. The full settlement will still need to be approved by the Federal Court of Australia, who will determine the exact amount of compensation to be given to each family. Shaun Bonétt, Chair of LLS, said that the settlement was “a historic day in the fight against this injustice,” and expressed the hope that “this settlement provides some comfort to group members who had wages stolen and to the families of workers that are now deceased.” In a post from Shine Lawyers, the firm’s joint head of class actions, Vicky Antzoulatos praised the agreement as “a victory for the many thousands of First Nations people we represent.” She went on to state: “Financial compensation is one way to acknowledge the suffering of First Nations people. It doesn’t correct the past but offers a way forward.” As LFJ reported, this is not the first time that Shine Lawyers and LLS have worked together to bring a class action on behalf of indigenous Australians and then to successfully reach a settlement with the government. In April of this year, the NT Stolen Generations lawsuit’s $50m settlement with the federal government was approved by the NSW supreme court.
Commercial Legal Innovation

The Legal 500 Releases 2024 Funder Rankings and Shares Industry Insights

Legalese has released the latest edition of The Legal 500 Litigation Funding – The UK and US Rankings for 2024, highlighting its top ten funders in the UK and top eight funders in the US. Legalese explains that the rankings are based on several factors, including areas such as: funder size and experience, volume and value of funded cases, transparency of operations, capital adequacy, and longevity. As part of the published rankings, Legalese also includes observations on the current state of the industry from senior leaders at the leading litigation funders, as well as from law firms who work with these funders. Speaking to the maturation of the industry, Richard Wise, disputes partner at Addleshaw Goddard, emphasised that “litigation funding is here to stay” but noted that it is also “going through a stage of evolution at the moment.” Looking from the insider’s perspective at how funders are evolving, Woodsford’s CEO, Steven Friel added that “some of the more successful players in the litigation funding field have diversified – acquiring or building complementary businesses.” Unsurprisingly, the hot topic of the Supreme Court’s PACCAR ruling was discussed, with Adrian Chopin, co-founder and managing director of Bench Walk Advisors, saying that the judgement is “slightly more than a storm in a teacup, but the sky has not fallen and nor will it fall.” Funder Rankings This year’s Tier 1 rankings for funders in the UK include Bench Walk Advisors, Harbour Litigation Funding, and Therium. While in the US, the three Tier 1 ranked funders are Burford, Omni Bridgeway, and Parabellum Capital. Bench Walk Advisors and Parabellum Capital are new entrants to the Tier 1 listing, having each previously been listed in their country’s Tier 2 rankings last year. There is one new addition to the UK rankings this year, as Asertis joins in Tier 3, having been listed as a ‘Funder to watch’ in the 2023 rankings. Asertis is highlighted for its expertise ‘in funding commercial disputes, with an emphasis on group actions, enforcement, and insolvency.’ There are no new additions to the US rankings this year, however, Lake Whillans Capital Partners has been removed from Tier 3 and is no longer present in the rankings. Individuals As was the case in 2023, the Legal 500 rankings still do not place individuals at these funders in a tiered structure. However, in a new addition to the 2024 rankings, it now includes a list of eight ‘industry leaders’ who are highlighted for their work in the industry:
  • Susan Dunn – Harbour Litigation Funding
  • Jonathan Barnes – Woodsford
  • Ayse Yazir – Bench Walk Advisors
  • Adrian Chopin – Bench Walk Advisors
  • Dai Wai Chin Feman -Parabellum
  • Neil Purslow – Therium
  • Patrick Meloney – LCM
  • Matthew Blumenstein – Statera Capital· 
In addition to these industry leaders, the write-ups for each funder includes mentions of key contacts at each company. The full 2024 UK and US Rankings for Litigation Funding can be found here.
Commercial

ALFA Launches Legal Finance Insights Podcast

In a post on LinkedIn, The Association of Litigation Funders of Australia (ALFA) announced that it has launched its own Legal Finance Insights podcast, with two episodes already live and available to listen to. The new in-house podcast is hosted by Pip Murphy, who serves as ALFA’s CEO and as a non-executive director and senior investment manager for CASL. The inaugural episode of the Legal Finance Insights podcast begins with Murphy providing an overview of ALFA’s structure and its mission, introducing ALFA’s members and associate members, along with the individuals that make up ALFA’s board. The podcast’s second episode sees Murphy joined by Maya Shallita, investment manager at Balance Legal Capital, as they offer an introduction to the world of litigation finance, explaining how the industry operates and the benefits it provides for both law firms and businesses. Future episodes of the podcast are set to feature ALFA’s members as they provide insights into “their experiences and what they are seeing, and predicting for the future of legal finance in Australia.” Episodes of the Legal Finance Insights podcast can be accessed through Spotify or Apple.
Announcements Commercial

Litica Broadens Global Reach with New Cologne Office in European Expansion

Litica, the leading ATE and litigation insurance provider, recently announced at the Annual International Litigation Finance Forum its expansion into Europe, with a new office in Cologne (Köln) Germany. Other offices include London UK and Sydney Australia, with further expansion in the coming months.  Litica has appointed Ed Yell to lead this expansion. As Managing Director of Litica Europe GmbH, Ed is responsible for developing litigation risk opportunities across the European Economic Area (EEA), working extensively with litigation finance providers, brokers, law firms and in-house counsel teams.   “Litica’s launch in Cologne was essential to ensure that we can offer a more efficient and focused solution to a rapidly growing European litigation finance market” – Ed Yell, Managing Director of Litica Europe GmbH.    As the world's leading ATE and litigation insurance provider, Litica is on a mission to empower access to justice in the 21st century. The company strives to provide comprehensive litigation-focused solutions and products  Key highlights: 
  • Established in 2019, Litica was founded and is led by qualified lawyers and financial services professionals, Stephen Bolster ACII and Steve Ruffle. 
  • The experienced in-house legal team has the largest number of legally trained underwriters in the market, with expertise stemming from prominent law firms and international litigation funders.  
  • Litica has attracted the largest panel of insurers (company and Lloyd’s markets) and is permitted to underwrite policies globally. 
  • Litica has provided over EUR €1bn in insurance capacity across a range of litigation & arbitration risks. Most litigation and arbitration case types being heard across the globe can be insured - from €25,000 defamation disputes to multi-billion-dollar class actions. 
  • Underlining Litica’s expertise in the field of litigation, Litica has recently been ranked ‘Band 1 – Litigation Insurance Underwriters 2023’ by Chambers and Partners, with Steve Ruffle and Ed Yell recognised as ‘Band 1’ in the individual category; Eliza Finch was recognised as a ‘WWL Thought Leader - Third Party Funding’; and Stephen Bolster as a ‘Lawdragon Global 100 Leaders in Litigation Finance’. Razi Mireskandari, the Managing Partner and Head of the Dispute Resolution team at Simons Muirhead & Burton (SMB), was recently announced as Litica's new non-executive director.
Case Developments Commercial

CAT Grants CPO Application in Apple Lawsuit, Pending Resolution of Funding Issues

In the aftermath of the Supreme Court’s PACCAR ruling on litigation funding agreements (LFAs), industry observers have been keen to see how lawsuits with pending applications before the Competition Appeal Tribunal (CAT) would be treated. In a new judgement released today, we are seeing signs that the CAT may be taking a pragmatic approach to the issue of funding, whilst still allowing meritorious proceedings to move forward. An article in Reuters provides an update on the case of Mr Justin Gutmann v Apple Inc., Apple Distribution International Limited, and Apple Retail UK Limited, as a CAT tribunal’s ruling granted the application for a collective proceedings order (CPO). The lawsuit, which sees Mr Gutmann acting as the proposed class representative (PCR), seeks to represent approximately 24 million consumers over a claim that Apple concealed battery issues with their iPhone products. The tribunal’s written judgement states that the ‘the requirements of a CPO are met in this case, subject to the resolution of the terms of funding.’ The issue of Mr Gutmann’s third-party funding arrangements were addressed earlier in the judgement’s introduction, with the tribunal noting that the PACCAR ruling raises issues ‘concerning the legality of the PCR’s funding arrangements.’ The tribunal went on to highlight that Mr Gutmann has already ‘indicated that he may need to alter his funding arrangements and he is actively pursuing his options.’ Whilst the judgement noted that neither party had asked the CAT to ‘make a ruling on the current or proposed new funding arrangements’, it also emphasised that the certification for the proceeding was provisional and still ‘subject to further submissions as to funding arrangements.’ In response to the CAT’s ruling, Apple referred back to a previous statement denying the allegations and categorically stating that the company “have never – and would never – do anything to intentionally shorten the life of any Apple product, or degrade the user experience to drive customer upgrades."  Mr Gutmann, who is being represented by law firm Charles Lyndon, described it as “a major step towards consumer justice." In a post on LinkedIn, Eleanor Leedham, of counsel at Charles Lyndon, stated that “the regime may still be in its infancy but rulings like this demonstrate that it is working, and it is a vital system for protecting consumers from abuse by tech behemoths and providing damages where they have suffered loss.”
Announcements Commercial People Moves

Ben Herbert Departs LFG for Miller Barondess

In a post on LinkedIn, Ben Herbert announced that he would be departing Law Finance Group (LFG) to take up a new role as partner and co-lead of the IP practice at Miller Barondess.  Commenting on the move in a press release from Miller Barondess, Herbert stated: “I’m thrilled to join the talented team at Miller Barondess, a firm renowned for excellence inside and outside the courtroom.  I look forward to helping build upon the firm’s strong track record of success, leveraging its capabilities to provide clients with exemplary service and sophisticated representation in the types of patent and trade secret matters I have focused on throughout my career.” Skip Miller, founding partner of Miller Barondess, stated that Herbert would be “instrumental in further expanding the firm’s IP practice.” Sasha Frid, also a founding partner of the firm, described Herbert as “a highly skilled and respected patent and technical trade secret litigator whose expertise will complement the capabilities of our IP team.” Herbert’s departure from LFG comes nearly a year after he joined the litigation funder, having spent the last 10 months leading LFG’s operations in Los Angeles originating new business, and underwriting LFG’s transactions and investments in IP litigation. Prior to joining LFG, Herbert spent over 10 years at Kirkland & Ellis, where he was also a partner in the firm’s intellectual property litigation group.
Commercial Regulatory Issues

Law Professor Argues Some Funders ‘Will Never Be Passive Partners’

Debates over the role of third-party litigation funding have grown increasingly contentious over recent years, with interest groups and policymakers wading into the discussion with assertions that funders operate in the dark and have exerted control over litigation processes and outcomes. A new academic essay dives into this topic with renewed focus, offering an assessment of the current funding landscape and specifically highlighting the role of ‘opaque capital’ as an aggressive and chaotic force in the funding of torts. In an article published in Volume 133 of The Yale Law Forum, Samir D. Parikh, professor of law at the Lewis & Clark Law School, examines the relationship between ‘opaque capital and mass-tort financing,’ and the dangers that third-party funding may pose to mass torts. In the essay, he starts from the position that litigation funders ‘will never be passive partners,’ because ‘all the tools necessary for a financier to create and control a mass-tort case are available and unregulated.’  At the heart of Parikh’s paper is the idea of the ‘Alchemist’s Inversion’, which he describes as ‘the process of employing unethical and potentially illegal tactics to create, enhance, and marshal apparently low-value claims with the hope of turning them into gold.’ Whilst he is quick to emphasise that this kind of behaviour is not currently widespread among funders, he suggests that lessons can be learned from the actions of opaque financiers in other markets and that ‘recent cases demonstrate that the arsenal is available, and deployment is underway.’  In his examination of the funding market, Parikh separates third-party financiers into three types: dedicated, sporadic, and opaque capital.  The ‘dedicated funder’ category encompasses the major litigation funders who have ‘an arguably transparent business model and willingness to engage in public debate about litigation finance.’ Parikh’s ‘sporadic funders’ are categorised as smaller players who operate less systematically, often focusing on smaller lawsuits such as personal-injury claims, and who only ‘receive public scrutiny only when they engage in some sort of malfeasance or unethical conduct.’  Most worrying to Parikh are the ‘opaque capital’ financiers, a group of ‘aggressive hedge funds and private-equity firms’ whose ‘chase for yield requires direct engagement in high-stakes, big-ticket disputes.’ He argues that these opaque funders are notable for their desire to increase their control over the outcome of litigation by ‘exerting leverage at each process point’, with a relationship between the funder and claimant which ‘allows clandestine maneuvering and influence that could undermine cases and litigants in unforeseen ways.’ The rest of the article provides an analysis of how these funders ‘can create chaos in this space’, looking at various case studies and examples to argue that ‘creation and control are the governing dynamics.’ Whilst Parikh describes the article as ‘a primarily descriptive treatment in order to spotlight the challenges posed by opaque capital,’ he concludes by suggesting that it also shows the need for reform and the introduction of measures to ensure greater oversight of funder activities. He puts forward the idea that such proposals could include enhanced disclosure requirements for funding arrangements, introducing ‘a fee to file a claim’, as well as reforms to the ‘regulation of claims marshalling’ and ‘the ways courts and attorneys verify claims. The essay can be read in full here.
Announcements Commercial People Moves

Omni Bridgeway More Than Doubles the Size of its London Investment Team

Omni Bridgeway is pleased to announce a substantial expansion of its operations in the UK with the addition of six individuals in London, bringing the total team to 11. All the new hires have significant experience in legal finance. Gian Kull joins as Regional Portfolio Manager for the UK and Senior Investment Manager and will oversee the origination and management of investments in the UK. Gian joins Omni Bridgeway from a UK-based global litigation funder where he was Chief Investment Officer. Prior to this, Gian was with Syz Capital in Zürich, where he led the build-out of a legal assets investment platform focused on litigation funding and law firm lending. Gian is joined by Investment Managers Simon Latham, Sean McGuiness, Andrew Roberts and Michael Taggart. With experience across commercial litigation funding and international arbitration, the group brings particular bench strength in competition disputes, collective redress, large-scale insolvencies, shareholder claims, offshore litigation and recovery, and sector-focused experience in infrastructure, energy and construction, among others.  "Omni Bridgeway is the world's leading funder and these appointments solidify our position," notes Raymond van Hulst, Managing Director and CEO. "These experienced new hires bring further track record to the high-calibre team we already have in London. At a time when funding options in the UK market have been reducing significantly, Omni Bridgeway is increasing its commitment and presence," he continues. "With over three decades of experience – and our footprint and operations in 26 international markets – Omni Bridgeway remains the only funder to have global originating and funding capability." The team augments Omni Bridgeway's slate of industry veterans: seasoned investment team members Alistair Croft, Camilla Godman, and Mark Wells, former founding partner of Calunius Capital who recently joined the company as Global Head of Portfolio Management. The team is rounded out by senior business development and marketing professionals Sarah Glover (formerly Burford Capital) and Steven Savage, who joined from Woodsford last month. "Collectively, the London team bring decades of funding industry experience," remarks Managing Director and Chief Investment Officer EMEA, Hannah van Roessel. "Omni Bridgeway is now even better positioned in the UK to provide on-the-ground resources and expertise for merits and enforcement funding across all types of disputes." Gian Kull concluded, "It's exciting to be leading the efforts for one of the world's top funders in such a key market for disputes funding. We are joining a highly respected team – it is strength building on strength. The quality of our combined team and the resources we can deploy will enable us to quickly deliver legal finance solutions to companies, law firms and their clients." 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 26 international locations.
Consumer

Funder Loses Appeal Over NFL Concussion Settlement Distribution

One of the biggest stories in sports law over recent years has been the claim that current and former players in contact sports, such as American Football, are owed compensation for concussion injuries. However, even in one of the most high profile victories for this type of claim, it seems that the involvement of funders has led to ongoing disputes about the way in which settlements have been distributed. Reporting by Reuters details last Friday’s decision by the 3rd U.S. Circuit Court of Appeals in Philadelphia, which dismissed Thrivest Specialty Funding’s appeal to intervene in a previous District Court ruling over the way settlements were paid out to individuals in the NFL concussion litigation. Thrivest, which now operates as Balanced Bridge Funding, argued that ‘the District Court is improperly administering the settlement in a manner adverse to its interests,’ because the ‘Funder Rules’ allowed for the NFL players to receive settlement payments directly rather than through their lawyers. Thrivest had previously moved to have the District Court change these rules in 2022, with the funder having cited at least two examples of players who had ‘received a direct settlement payout, and dissipated the proceeds without repaying Thrivest.’ In a 2-1 decision, the Court of Appeals panel rejected Thrivest’s argument that the District Court’s Funder Rules ‘amount to a substantive ruling that all third-party cash agreements are invalid’, describing the claim as ‘patently incorrect.’ It went on to state that ‘the Rules simply distribute funds in a particular way: directly to class members instead of through counsel,’ and that ‘Thrivest remains free to pursue a collection action.’  In what reads as a particularly damning final statement on Thrivest’s second argument that the Rules allow class members to avoid paying the funder, the panel said: ‘Put differently, it does not like the “particular way” the claims administrator is distributing funds to class members and would prefer a different method.’ As LFJ reported in November 2021, this is not the first time that Thrivest’s involvement in the NFL concussion litigation has led to subsequent disputes.
Case Developments Commercial

Camp Lejeune Litigation Attracting Growing Numbers of Fraudulent Claims

As LFJ reported in July 2023, the interest in litigation stemming from the Camp Lejeune toxic water scandal has been consistently on the rise, as a combination of legal advertising and litigation funding are contributing to what may become one of the largest mass tort cases in US history. However, the tremendous amount of attention focused on these lawsuits is now turning into a double-edged sword, as skyrocketing numbers of fraudulent claims are coming to light. An article by Bloomberg provides an in-depth overview of reports that the Camp Lejeune case is becoming a magnet for false claims, with huge numbers of robocalls and a lack of due diligence from lawyers referring cases has led to a dramatic rise in the number of fraudulent attempts to file a claim. Mikal Watts, capital partner at Watts Guerra, revealed that his firm already has 6,000 Camp Lejeune clients and that whilst auditing referrals from other lawyers, they found hundreds of bogus claims including individuals who had been specifically recruited by call centers. As Bloomberg had previously reported earlier this year, the Camp Lejeune litigation has attracted almost $2 billion in litigation funding, as funders see the strong potential of returns in a case where the settlements are guaranteed by the government. Brian Roth, CEO of Rocade Capital, spoke to Bloomberg about this surge in fraudulent claims and aptly noted that in these situations, “an influx of capital invites greed.” Roth put the spotlight on bad-faith legal marketing companies, explaining that “where you have issues is when you have leads being marketed to multiple different buyers, you have call centers without oversight.”   Driven by the government-approved payout scheme, Bloomberg confirmed from a Navy spokesperson that they had already received 117,000 claims by mid-October. All of these claims will have to be individually vetted by the Navy, but with the window to submit claims open until August 2024, the vetting required to verify each claim will likely lead to an incredibly protracted process. In the meantime, law firms representing clients in Camp Lejeune litigation will have to devote a large amount of time and resources to due-diligence when vetting new potential claimants.
Announcements Commercial People Moves

Andrey Elinson Departs A1 For His Own Investment Venture Inweasta

Established in 2022 by Andrey Elinson, Inweasta has rapidly evolved into an international business with a robust presence in prominent cities such as Dubai, Hong Kong, and Istanbul. The company's range of services is both comprehensive and continuously expanding. Catering to the financial and industrial sectors, the company offers an extensive array of consulting, legal, and investment solutions. The group's core competencies encompass investment strategies, cross-border dispute resolution, litigation funding, and distressed asset management. Andrey Elinson's departure from A1 and his subsequent dedication to Inweasta signify more than just a shift in professional allegiance; It underscores his profound belief in the company's mission and its boundless potential. Elinson expressed: "As I embark on this new chapter with Inweasta, I'm driven by the wealth of knowledge and experience I've gained in executive roles. Inweasta, with its adept team and ambitious vision, provides the perfect platform to harness that expertise. Over the next five years, we aim to evolve Inweasta into a dynamic international powerhouse, leveraging our seasoned team to deliver cutting-edge solutions and services, setting new standards in our industry." Andrey Elinson's professional track record, spanning two decades, is a testament to his expertise in private equity, strategic business development, and corporate management. In 2018, Elinson became a managing partner at A1, a prominent private equity firm and international litigation funder. Preceding this, in 2014, he held the position of Director of Assets Management at the Alfa Group Consortium, a major Russian business entity. From 2007 to 2014, Andrey Elinson devoted seven years to Basic Element, one of Russia's largest industrial conglomerates, initially serving as the Director of Corporate Governance and Internal Control, and later advancing to the role of Deputy CEO. Throughout his career, Elinson held positions on the boards of directors of various prominent companies, including AlfaStrakhovaniye, Ingosstrakh, Rosvodokanal, and En+ Group. In 2016, Andrey Elinson became a Member of the Supervisory Board of X5 Retail Group, one of Russia's largest retail operators. However, in 2020, he retired as a member of the Supervisory Board of X5 Retail Group. He also served as a member of the supervisory board of the Alfa Group Consortium and A1 Investment Holding, all of which he departed from by 2020. His departure from A1 signifies his exit from all appointed roles, redirecting his focus exclusively to his personal investment enterprise. As the founder, Andrey Elinson dedicates special focus to Inweasta, ensuring a hands-on approach to its growth and success. In return, the company places substantial trust in Elinson's well-established reputation and the professionalism exhibited by the entire team. The Inweasta team has outlined ambitious strategic goals for the upcoming five years, harnessing decades of combined experience to pioneer new industry benchmarks and propel innovation forward. About Inweasta Inweasta is an international group of companies launched in 2022. The company specializes in investments, cross-border disputes resolution, litigation funding and distress assets management. Inweasta provides full range of services related to a resolution of complex disputes and situations:
  • Litigation Funding
  • Cross-border Litigation Management
  • Investments in Distressed Assets
  • Corporate Finance and Debts Restructuring
  • Inheritance Structuring and Protection
  • Mediation of Disputes
  • Having legal, financial, investments, security, PR and other competences in-house gives Inweasta the ability to work efficiently on complicated projects that require multiple competences being applied.
Announcements Commercial People Moves

LegalPay Appoints Tanya Prasad as Chief Investment Officer

With this strategic addition to the team, LegalPay aims to reinforce its position as a dominant player in the legal finance industry, setting its sights on managing INR 50,000 crores worth of claims by the end of 2026.  LegalPay, the largest player in the litigation funding industry in India, is proud to announce the appointment of Tanya Prasad as its new Chief Investment Officer (CIO), effective immediately.  Prasad brings over 10 years of experience in cross-border litigation and international arbitration proceedings in the fields of international trade, construction disputes, energy, banking, and finance, as well as Investor-State disputes. She specialises in International Dispute Resolution and earned her LL.M. degree from the prestigious Humboldt University, Berlin. rings a wealth of experience from her previous roles at PwC, Karanjawala & Company, and MRP Advisory. She will be responsible for overseeing LegalPay’s investment strategy, portfolio management, and risk assessment.  LegalPay has enjoyed unprecedented success in the Indian litigation funding market. Its achievements have garnered widespread attention from various international litigation funders, leading to strategic partnerships with many of them.  “I welcome Tanya Prasad as our new Chief Investment Officer at LegalPay. Her extensive experience in litigations and expertise in arbitrations make her the ideal choice to lead our company’s growth in the dynamic field of litigation funding,” said Kundan Shahi, Founder & CEO of LegalPay. He further added, “Tanya Prasad’s appointment as CIO represents a pivotal moment in LegalPay’s journey. With her exceptional expertise, we are confident in our ability to scale new heights and continue making a positive impact in the legal finance industry.”  Tanya Prasad commented: “I am excited to take on the new role of Chief Investment Officer and to fulfil all responsibilities that come with it. It’s a great honour for me to be in a position to steer the growth of LegalPay in the litigation funding ecosystem in India and to strive to make LegalPay a global player. It is also important to me to further the mission of LegalPay, which is- access to justice for all.”  Furthermore, LegalPay plays a pivotal role in supporting companies undergoing insolvency by providing them with the necessary capital during such times.
Commercial Regulatory Issues

Broadridge Says Institutional Investors Don’t Need to Panic over PACCAR Decision

Much of the commentary on the Supreme Court’s ruling in PACCAR regarding litigation funding agreements (LFAs), has focused on the impact on litigation funders and law firms. However, it is also worth recognising that investors who provide the needed capital for these funding arrangements are also concerned about how their investments could be affected. A new insights article from Broadridge looks at the potential impact of the Supreme Court’s PACCAR decision on institutional investors, offering an overview of the judgement itself and providing key takeaways for those investors who are currently engaged in LFAs.  The leading takeaway from Broadridge is spelled out in clear terms: ‘do not panic.’ The fintech company argues that the Supreme Court’s ruling ‘is not going to turn the litigation funding market on its head in the UK’, with funders and law firms having been preparing in advance for this outcome. The article goes a step further and suggests that the decision may be beneficial for the industry in the long-term, providing ‘crucial guidance’ for the drafting of LFAs to avoid any questions of non-compliance or impropriety. Broadridge does note that any existing LFAs will be reviewed by funders and may require amending, but says that the degree of changes required will vary depending on the wording of each agreement. In addition, the piece emphasises that institutional investors do not need to be concerned about any proceedings where the litigation has been solely funded by the law firm itself.
Case Developments Commercial

Settlement Agreement Reached in International Arbitration Funded by Longford Capital

Whilst developments in class actions and commercial litigation have dominated the headlines over the last month, the work of litigation funders involved in international arbitration proceedings continues to demonstrate the important role third-party funding can play. An insights piece by Andrew Stulce, vice president at Longford Capital, details the funder’s involvement in a complex international arbitration, providing funding for True Blue Development and its investors in a dispute with the government of Grenada. The claim brought before the International Centre for Settlement of Investment Disputes (ICSID) had begun in June 2021 after the Grenadian government allegedly ‘reneged on its obligations’ to True Blue during the development of a resort hotel near Grand Anse.  The property developer then approached Longford Capital for additional funding to support its claim, with the ICSID tribunal having been notified of the third-party funding in May 2022. Stulce explains that “the opportunity to partner with these investors to pursue their international arbitration wasn’t just a matter of good business—providing capital so they could enforce their treaty rights with top-shelf legal representation was also the right thing to do.” With the additional funding secured, the claim continued forward, and by the summer of 2023 the two parties had entered settlement discussions, with the tribunal being notified on 31 August 2023 that True Blue and Grenada had reached a settlement agreement. The tribunal officially noted the discontinuance of the arbitration proceedings on 6 September 2023, with Longford explaining that the agreement would result in the Grenadian government acquiring ownership and finding a new developer to complete construction of the hotel. Stulce highlights that the settlement agreement “sets right a legal injustice that may not have been pursued without Longford’s funding,” and says that the funder is “gratified that we were able to support these claims and play an important role in resolving this dispute in a constructive way.”
Commercial

University of Chicago Hosts Conference on Litigation Finance

As many litigation finance leaders emphasised at last week’s IMN conference, one of the priorities for the industry is to continue efforts to raise greater awareness and educate a wider audience about third-party funding. Whilst conferences produced by commercial providers are incredibly useful, it is important where possible for the industry to partner with educational institutions on these events. On Thursday October 26, the University of Chicago Law School’s Center on Law and Finance will be hosting its Conference on Litigation Finance, in partnership with Burford Capital and Alliant. The conference aims to provide a forum for debate around various issues with the agenda including panel discussions on: ‘the policy debate’, ‘the connections between insurance and litigation funding’, and ‘the challenges of litigation finance’. The one-day event has attracted a range of impressive speakers not only from litigation funders, but also top US law firms, insurers, academics, and court judges.  Representatives from funders on the agenda include James Burnham from Vallecito Capital, as well as Christopher Catalano and Alyx Pattison of Burford Capital. Bringing the perspective of the law firms, Leonard Gail, founding partner of Massey & Gail, and Benjamin E. Waldin, partner at Eimer Stahl LLP, will also be speaking at the conference. For those readers who have followed the ongoing disputes over disclosure in litigation funding, the most notable name among the three judges speaking at the conference is Chief Judge Colm F. Connolly from the U.S. District Court for the District of Delaware. Judge Connolly has become one of the most prominent names thanks to his push for increased transparency around funding arrangements in patent infringement lawsuits.
Case Developments Commercial

Cruise Ship Passenger Scores Win in Covid Class Action Brought Against Carnival

This past month has seen a high frequency of developments in Australian class actions, with judgements being handed down from the Federal Court, and new lawsuits being announced with the support of third-party funders. This trend is not abating as we enter the final days of October, with yet another favourable judgement handed down in a class action with its origins in the Covid-19 pandemic. An article by The Financial Times covers today’s judgement by Justice Angus Stewart in the case of Karpik v Carnival plc (The Ruby Princess) (Initial Trial) [2023] FCA 1280. Justice Stewart’s ruling found that Carnival, one of the world’s leading cruise operators, was liable to pay for Susan Karpik’s ‘out of pocket expenses in respect of her COVID-19 infection and adjustment disorder injuries’, after she contracted the respiratory disease aboard their ship, The Ruby Princess.  The judge ruled that Carnival had ‘breached their duty of care in various respects’ in their handling of a Covid outbreak in March 2020, having failed to cancel the cruise, warn the passengers of the heightened infection risk, or take adequate measures to prevent the spread of infection. Whilst Justice Stewart found that Karpik’s claim for non-economic losses did not meet the legal threshold, and therefore did not award personal injury damages, Carnival was ordered to pay $4,423.48 plus interest to cover her out of pocket expenses for medical treatment.  Mrs Karpik’s claim is part of a class action brought by Shine Lawyers and funded by Balance Legal Capital, representing over 1,000 individuals who were either passengers on Carnival’s ship or are relatives of passengers who died of coronavirus. Vicky Antzoulatos, joint head of class actions at Shine Lawyers, praised the judge’s decision and argued that Carnival should now “do the right thing and compensate all the passengers rather than prolong the matter through further litigation”.
Announcements Commercial Fundraising

LegalMation Announces $15M in New Funding

LegalMation, Inc., the market leader in Generative AI-driven solutions for high-volume litigation, today announced it has raised a $15 million Series A financing round led by the venture capital team at Aquiline Capital Partners LP, Aquiline Technology Growth ("Aquiline"), with continued participation from existing investors Motley Fool Ventures, REV Venture Partners, Key Venture Partners, Quick Set LLC, and Brentwood Investments. LegalMation has experienced rapid growth in demand for its Generative AI litigation response platform that provides the insurance and legal industries with clear productivity and cost savings. LegalMation's proprietary solutions enable legal professionals to respond to lawsuits, discovery requests, and related workflows using the client's own historical response data. In 2023, LegalMation's customers have already leveraged the platform to answer over 1.1 million discovery requests in over 30 state and federal jurisdictions. Demand for LegalMation's solutions has been boosted by labor shortages and inflationary pressures. For in-house counsel in particular, automating high-volume litigation and related tasks has become the number one solution to these challenges. Accordingly, insurance carriers and large enterprises have become LegalMation's predominant client base as they seek to increase efficiency and find ways to scale at the organizational level as they find ways to apply Generative AI solutions to their operations.  Valued at over $200 billion, the LegalTech and InsurTech markets are increasingly expected to rely on AI and automation solutions in the coming years. LegalMation is well positioned to benefit as the litigation and insurance industries continue to transform. LegalMation has become the trusted partner to the nation's top insurance carriers, large enterprises such as Walmart, and numerous law firms such as Sheppard Mullin, Ogletree Deakins, Fisher Phillips, Nelson Mullins, Baker Donelson, and Jackson Lewis. With this new funding, LegalMation will deepen the functionality and breadth of its platform to support the growth of its rapidly evolving customer base. Additionally, the new funds will enable LegalMation to devote significant resources to build new end-to-end litigation workflow automation and analytic tools, all focused on the goal of resolving disputes faster, while improving accuracy, cost, and outcomes for its customers. "We are thrilled to partner with Aquiline given their experience and ability to identify disruptive technology platforms across the insurance and legal ecosystems combined with an extensive network across both markets. We already had strong customer relationships with a few of Aquiline's strategic carrier investors and we look forward to expanding LegalMation's reach within these markets" said James M. Lee, LegalMation's Co-Founder and Chief Executive Officer. "The need for AI automation tools to achieve financial goals has never been greater, especially with the macro-economic pressures falling on both large and small enterprises. This investment will allow LegalMation to accelerate its growth and realize our vision of becoming the most impactful technology partner to the insurance and legal industries." "The AI revolution has the potential to drive exponential productivity gains while allowing greater scalability. The legal and insurance industries are just beginning to adopt transformative technology solutions, having realized the potential to empower their highly skilled talent core" said Aquiline's Dante La Ruffa, Principal. "Aquiline has a track record in scaling SaaS companies and has made multiple investments in the LegalTech industry across our family of funds. We are thrilled to partner with LegalMation and believe they are uniquely positioned to supercharge the litigation support process as we know it today." About LegalMation LegalMation is a SaaS technology company led by a group of experienced litigators and technology specialists, dedicated to revolutionizing the practice of law through artificial intelligence aimed at legal departments of large corporates, insurance carriers, and law firms. LegalMation's ground-breaking generative AI platform dynamically produces fully formatted responsive pleadings, discovery requests and responses and other documents. The platform tailors the claims, allegations, and requests in the legal documents, incorporating jurisdictional requirements as well as the attorney's own style, and response strategy. For more information, visit https://www.legalmation.com. About Aquiline Technology Growth Aquiline Technology Growth ("ATG") seeks to invest in early and growth-stage technology companies that are bringing innovation to the insurance and financial services ecosystems. ATG is managed by Aquiline Capital Partners LP, a private investment firm based in New York and London that invests across financial services and technology. The ATG team has experience in technology and financial services and is supported by its colleagues at Aquiline, strategic partners, and an active group of industry Executive Advisors. For more information on ATG, visit http://www.aquiline.com.
Commercial Deals

Court House Capital Funds Class Action Against Toyota New Zealand

Class actions often represent the best avenue for consumers looking to seek justice and some form of compensation from large companies who have harmed them. However, these claims are most effective when they are supported by third-party litigation funding, ensuring that these individuals can pursue legal redress without incurring financial risk. An article from Stuff.co.nz covers the recent filing of a class action against Toyota New Zealand over its sale of 35,000 vehicles since 2015, which allegedly contained a known fault in their diesel particulate filters (DPFs). The lawsuit brought by Shine Lawyers alleges that the defective vehicles provided customers with reduced performance, poor fuel efficiency and caused the vehicles to ‘emit white smoke’. Commenting on the class action, Shine Lawyers’ associate Hamish Davies explained that “owners of these vehicles spent thousands of dollars, in some cases, all of their savings and it’s pretty disappointing for them to now have to deal with what was a defective vehicle.” He highlighted that the defects in the diesel vehicles forced consumers to spend excessive amounts on fuel and “even in some cases loss of income when people missed work due to issues with the vehicle.” The class action is being funded by Court House Capital, with Davies highlighting that the outside financing “means that individuals don’t have to pay anything and they don’t have any risk when they sign up.” A spokesperson for Toyota New Zealand provided the following comment: “Toyota has been and remains committed to assisting any customer whose vehicle experiences a DPF issue and will continue to provide any related repairs free of charge. This has been our position to date, and we will defend the class action announced today. As this matter is now before the courts, we have no further comment.”” As LFJ reported in October 2022, this is not the first time that one of Toyota’s local businesses has been hit with a lawsuit related to issues with its diesel vehicles, with Toyota Australia facing a $1 billion class action brought by Maddens Lawyers. The Australian class action lawsuit also received third-party funding, with that case being backed by Woodsford.
Commercial Deals

Manolete Partners Looks to Expand Covid Loan Recovery Scheme

As we steadily approach the four-year mark since the COVID-19 outbreak began, it is clear that we have not yet seen all the long-term consequences of the pandemic play out. This is especially true when it comes to litigation that has been brought in relation to actions by governments or businesses in response to the pandemic, with a UK litigation funder indicating that it is increasing its activities in this area. An article by Legal Futures covers the recent announcement by Manolete Partners that it is looking to expand upon its pre-existing pilot scheme to bring cases related to Covid Bounce Back Loans (BBLs). In a trading update for the six months leading up to 30 September, the funder indicated that another UK bank is beginning a campaign to recover misused BBLs and will partner with Manolete. Manolete’s previous pilot programme with Barclays has provided funding for 81 BBL cases, with 33 of these receiving funds in the last six months, compared to 48 funded BBL claims in the final six months of the 2022 trading period. The funder also informed its shareholders that the cases had a noticeably shorter duration than the funder’s average timeline for funded litigation.  Interestingly, Manolete also stated that the Supreme Court’s PACCAR ruling “has had no adverse impact, necessitating only very minor amendments to the standard terms of our funding agreements.”
Commercial Deals

Piper Alderman Exploring Class Action Against IC Markets Over CFD Products

The growth in trading platforms that cater to retail investors over recent years has significantly widened the market of individuals looking to trade investment products. However, the conduct of these platforms has come under increasing scrutiny and related legal action, with questions being raised around how they market and sell complex investment options to individuals who lack the resources and awareness of large institutional investors. According to reporting by Business News Australia, Piper Alderman is investigating a potential class action against International Capital Markets (IC Markets) over its sale of contracts for difference (CFDs) to retail investors in Australia.  The claim will focus on “allegations of unconscionable conduct and misleading and deceptive conduct during the period September 2017 to March 2021” by IC Markets in its sale of CFD products to investors. Business News Australia’s reporting states that Piper Alderman is partnering with Woodsford to source funding for the IC Markets class action. This potential claim would be the latest of several class actions that targeted the sale of CFD products, following a 2021 crackdown by Australian Securities and Investments Commission (ASIC) on the marketing and distribution of CFDs to retail investors. As LFJ reported, this would not be the first time that Piper Alderman has brought a class against an online trading provider over the sale of CFD products, having filed a similar class action against IG Markets in May 2023. In the IG Markets case, Piper Alderman secured litigation funding from Omni Bridgeway. Since Piper Alderman’s case was filed, LFJ has also covered another class action brought by William Roberts Lawyers against IG Markets in August 2023, with funding also provided by Woodsford.
Case Developments Commercial

High Court Grants Therium’s Asset Preservation Order in Dispute with Client

One of the key issues that commentators raised in the aftermath of the Supreme Court’s PACCAR ruling, was whether the judgement would lead to a series of disputes between funders and their clients over the enforceability of litigation funding agreements (LFAs). A recent decision from the High Court has demonstrated that these disputes are already underway, with funders keen to preserve their returns whilst the legal arguments continue to be tested. An article in The Law Society Gazette provides an overview of a High Court ruling in Therium Litigation Funding A IC v Bugsby Property LLC, where Mr Justice Jacobs granted Therium’s application for an asset preservation/freezing order against Bugsby. Therium’s application came about after Bugsby argued that, in the wake of the Supreme Court’s PACCAR decision, its LFA with Therium was no longer enforceable and it should therefore not have to pay the funder. In his judgement, Mr Justice Jacobs stated that “where the amounts claimed by Therium and Omni collectively exceed the proceeds received, there is every reason for all of the trust funds to be preserved.” He explained that both parties had made arguments that “require mature consideration and full argument”, which would need to be further examined in subsequent arbitration proceedings. This ruling in favour of Therium followed another application for an asset preservation order by Omni Bridgeway, who had also funded Bugsby’s original lawsuit. That application was granted by Mr Justice Cotter on October 2nd.  Therium’s spokesperson explained that the company had pursued the application as a solution to the “series of failed attempts by Bugsby to avoid paying what is owed to litigation funders.” They went on to highlight that the High Court’s decision was highly relevant to “funders, law firms and their clients and discouraging to claimants such as Bugsby that wish to use PACCAR as a means to walk away from their obligations to their funders.”
Commercial Fundraising

Fortress Reportedly Pursuing a Second Litigation Finance Fund

Although 2023 has been a turbulent year for litigation finance, with disappointing court rulings and an increase in calls for further regulation of the industry, it is clear that there is still a strong appetite among investors to commit resources to the sector.  An article from Bloomberg, shared by Investment News, revealed that Fortress Investment Group LLC is working on raising its second fund dedicated to investments in litigation finance opportunities. Bloomberg’s source indicated that Fortress was looking to build upon its legal funding portfolio, having already invested $6 billion into the sector.  Whilst Fortress did not provide a comment in response to Bloomberg’s reporting, the article suggests that the private equity company has already been strengthening its litigation finance team. According to the same source, Fortress had added another 12 employees to its legal assets team in the last 18 months, bringing that department’s total strength to 32. As LFJ covered last week, Andrew Jones, director at Fortress, was present at the recent IMN International Litigation Finance Forum and led a panel discussion on ‘Developments in Class Action and Group Litigation’.