Disclosure of litigation funding remains one of the most discussed industry topics as we head into the end of the year, with disclosure requirements and disputes occurring in jurisdictions around the world. In the realm of international arbitration, one funder argues that disclosure should not be viewed as a negative, but as a useful tool for strengthening the client’s claim.Outlined in a new piece of analysis by William Panlilio, an investment manager at Litigation Capital Management (LCM), the issue of disclosure in international arbitration is reframed to focus on its benefits for funders. Mr Panlilio points out that while there are no formal rules around disclosure in this area, it is generally accepted that both the presence as well as the identity of litigation funders in international arbitration should be discoverable.Panlilio argues that this should not be seen as undesirable, as the existence of a funding arrangement can act as a strong signal to all parties concerned that the claim is supported by a third-party who has assessed it as being substantial and likely to succeed. Additionally, it can dissuade the opposite party from engaging in stalling tactics in the hope of draining a claimant’s financial resources.Panlilio does specify that discoverability should not be exhaustive, as the details and exact nature of a funding arrangement should not play any role in a tribunal’s decision-making, nor is it relevant to the merits of a claim.
Litigation funding is perhaps at its most impactful when it can be used by individuals or groups of citizens to hold their government to account. A new class action in Australia is once again demonstrating this impact, as a leading funder is supporting a new action by Aboriginal communities against the regional authorities.Detailed in an article by National Indigenous Times, the Northern Territory’s public housing body is facing a class action suit brought by Aboriginal remote community residents who allege that the regional government has failed to ensure that local housing meets safety standards. The class action brought by residents of Gunbalanya is being funded by CASL, and takes aim at both the Territory and Commonwealth governments for failing to resolve tenant complaints about the quality of housing.Madeline White, a senior associate at law firm Phi Finney McDonald, which is leading the case, argued that this class action is not only about securing compensation for those residents involved in this lawsuit, but also for the wide array of remote Aboriginal communities throughout Australia. This is also not the first case of its kind, with similar lawsuits being brought in 2016 and 2019 by communities in Santa Teresa and Laramba.
Regulatory developments are at the front of mind for funders around the world, with significant proposals being discussed to place restrictions on third-party funding in the European Union, whilst other jurisdictions look to open their legal systems to increased involvement from funders. In a welcome development for funders in Australia, the government has made good on its commitment to reverse litigation funding restrictions put in place by the prior administration.In an announcement by the Department of the Treasury, the Australian government announced that its plans to exempt funders from investment regulations have now come into force. This reversal of the previous government’s position, which LFJ reported on in September, means that funders will once again be exempt from regulations including the managed investment scheme and Australian financial services licensing, according to a release by the Australian Securities & Investment Commission.Stephen Jones, the Assistant Treasurer and Minister for Financial Services, said in the statement that litigation funders play a crucial role in the government’s broader aim to widen access to justice. He also stated that the Treasury would continue to evaluate the Australian Law Reform Commission’s wider recommendations, to ensure that the country’s class action regime would produce ‘fair and reasonable outcomes’.
This Sunday’s “60 Minutes” featured a segment on the growth of litigation funding. Host Leslie Stahl highlighted the industry’s important role within the Legal Services sector, but also pointed out the lack of regulatory oversight which can lead to ethical concerns. “Litigation funding can help in cases where otherwise the little guy who’s suing would just get crushed or lowballed by defendants with deep pockets,” Stahl explained as part of her opener on the necessity of the funding industry. “The problem is, this market is exploding, with almost no rules or oversight.” Stahl profiled a litigation funding claimant: Craig Underwood’s family farm. Underwood had one customer—a hot sauce maker. When that customer pulled out of a contractual obligation, Underwood faced financial ruin. He sued his former client and won a breach of contract claim. But the hot sauce maker appealed, and Underwood couldn’t afford to keep fighting. That’s when he heard of litigation funding, and found Burford Capital. Underwood took $4MM from Burford to continue fighting, and won the appeal and the $23MM. When it was all said and done, Underwood still had to pay his attorneys, and then compensate Burford to the tune of $8MM. Asked whether he thought that payment amount was predatory, Underwood emphatically said no, given that Burford stepped in and funded his case when no one else would. “They basically rescued us.” Christopher Bogart, co-founder and CEO of Burford, noted that on average, the funder will double its money on a successful outcome, explaining that funders take enormous risk, given the non-recourse nature of their investments. He emphasized that Burford has a roughly 90% success rate. Stahl then interviewed Maya Steinitz, law professor at University of Iowa, who pointed out the ethical considerations at play here. Steinitz explains that although funders like Burford claim not to interfere in how a case is managed, there is nothing legally stopping a funder from compelling a client to settle. Consumer Legal Funding was also featured prominently in the program, where Stahl explained that the funding helps poor people pursue their legal claims. Yet she also pointed out how claimants are routinely charged very high interest rates by funders, highlighting RD Legal Funding’s alleged ‘predatory behavior’ in the 9/11 victims’ compensation fund case. The program concluded by pointing out how essential litigation funding is to American society. “Accessing the courts in a civil process is a luxury good in America” explained Maya Steinitz. “It’s simply too expensive to bring your case in a court.” That said, Steinitz is calling for more oversight of this largely unregulated industry.
Burford Capital will be featured on CBS’ 60 Minutes this Sunday, December 18 at 7:30 PM ET/7:00 PM PT [after to Sunday Night Football (please check local listings)].
Schedule for the show is as follows:
CONVOY OF LIFE – Scott Pelley reports from Ukraine, where more than 1,000 children are fighting cancer amid Russian attacks on hospitals and the power grid, putting their lives in immediate danger. A renowned American hospital and 21 countries have stepped in to help. Kristin Steve and Nicole Young are the producers.
LITIGATION FUNDING – Lesley Stahl reports on litigation funding, a relatively new multi-billion-dollar industry where investors fund lawsuits in exchange for a slice of the award. It can be lucrative and help level the playing field against big corporations with deep pockets, but it’s growing rapidly with little rules or oversight. Shachar Bar-On and Jinsol Jung are the producers.
LOURDES – Bill Whitaker reports from the Sanctuary of Our Lady of Lourdes, a Marian shrine in southern France and the site of 70 medical miracles recognized by the Catholic Church. 60 MINUTES goes inside the Lourdes Office of Medical Observations where world-renowned doctors and researchers conduct decade-long investigations into the dozens of claims of miraculous cures made every year. They determine which cases can be medically explained and which cannot. Nichole Marks is the producer.
ESG financier and litigation investor Woodsford is proud to announce a new class of team members joining the firm's global enterprise. Amar Singh Mann, David Haighan and Jordan Howells will join Woodsford's London, United Kingdom office. Cody Nguyen is slated to enter Woodsford's Brisbane, Australia office. Additionally, Woodsford announced that former Australian Federal Magistrate, the Honorable Neil McKerracher KC will join the firm's global investment advisory panel. Woodsford says that Australia continues to be an emerging market for litigation finance innovation.Woodsford's appointment of Howells as Senior Investment Manager is rooted in his wealth of experience, including 14 years of public and private organizational investigation, litigation and negotiation for ESG malfeasance. Woodsford plans to engage Howells' prosecutorial acumen that includes liaising with the United States Department of Justice, Securities and Exchange Commission and Serious Fraud Office.Steven Friel, Woodsford's Chief Executive Officer, says that the firm's new international appointments are indicative of cross border litigation investment innovation. Friel goes on to say that Woodsford's international footprint in ESG justice is expected to represent some of the highest standards in the world.
Mill City Ventures III, Ltd. ("Mill City") (NASDAQ:MCVT), a specialty short-term finance and non-bank lender, announced today that, in accordance with its previously announced letter of intent regarding a proposed merger transaction with Mustang Funding, LLC dba Mustang Litigation Funding ("Mustang"), it has entered into a $5 million short-term financing arrangement with Mustang in furtherance of the proposed merger. The related short-term note is scheduled to mature on the ninth-month anniversary of the loan.Mill City Chief Executive Officer, Douglas M. Polinsky, said, "Our announcement on December 6, 2022, outlined a few conditions set forth in the letter of intent, one of which was the consummation of a short-term loan by Mill City to Mustang. This $5 million short-term loan that we closed not only provides Mustang with short-term liquidity, but also marks the first step in what we believe will be an eventual combination transaction between Mill City and Mustang as outlined in our letter of intent and related public announcement. This is an exciting time for Mill City, as we believe that the proposed transaction with Mustang will be transformational for our combined company."Mustang President, Jimmy Beltz, said, "We are excited about taking the next steps in our company's growth and development, and look forward to working towards our goals with Mill City's team."About Mill City Ventures III, Ltd.Founded in 2007, Mill City Ventures III, Ltd., is a specialty short-term finance company providing short-term non-bank lending primarily to small businesses, both private and public. Additional information can be found at www.sec.gov or www.millcityventures3.com.About Mustang Litigation FundingFounded in 2018, Mustang Funding, LLC dba Mustang Litigation Funding looks for best in class capital solutions for the legal industry through funding law firms, plaintiffs, vendors and other opportunistic legal assets. More information can be found at www.mustangfunding.com
The nature of litigation funding means that it is often most sought after and most valuable in situations where unforeseen events lead to dire consequences for a wide array of parties. As a new piece of analysis suggests, the interconnected nature of the global economy and financial markets means that such situations could increase in frequency and trigger a higher volume of lawsuits requiring funding.This analysis by Jason Levine, investment manager and legal counsel at Omni Bridgeway, uses the example of the latest scandal in the cryptocurrency world: the collapse of FTX, to illustrate the danger of these ‘black swan’ events. Levine points out the unanticipated and massive financial losses that occur in such events, acting as a catalyst for a strong litigious response which can be enabled and bolstered by the use of third-party funding.Levine highlights that in situations where corporate plaintiffs are damaged by these black swan events, they may lack the liquidity to pursue litigation due to the financial strain imposed by the event. He also points to the fact that during these challenging times, taking on the costs of litigation may result in a hit to company valuation, and so, the use of litigation finance to shift these costs off the balance book can become particularly important.Levine concludes that if we do see an increase in the number and scale of these black swan events, particularly in the currently unstable financial markets, litigation funding will be a vital tool for corporates to seek redress and compensation through the legal system.
Although the issue of disclosure has primarily been discussed in recent months with relation to US plaintiffs being required to disclose details of their funding arrangements to the courts, a ruling in another jurisdiction appears to signal a victory for clients looking to disclose confidential information to their funders. Detailed in a piece of analysis by Ogier, a law firm specializing in offshore matters, a new ruling by the Court of Appeal in the British Virgin Islands (BVI), affirmed the right of clients to disclose certain confidential case details to their funders where necessary. In the case of Fang Ankong v Green Elite Limited, the Court agreed with the precedent set by the English High Court, that the ability of funders to access such information does fall within the ‘purposes of proceedings.’Ogier’s analysis noted that this is an important victory for funders and their clients, as it ensures they will be able to share information that could be used to assess the viability of future funding, thereby creating a more transparent process and one in which funders are less likely to be blindsided by information relevant to evaluating funding decisions. However, the analysis did note that this ruling only applies to cases within the BVI, and where cases involve proceedings in other jurisdictions, this guarantee is not automatically assured.
The volume and scale of class actions is on the rise in jurisdictions around the world, mirroring the regularity and broad scope of proceedings that are more commonly experienced in the US. Many industry commentators see Europe as a market with huge potential, driven by the expansion of litigation funding on the continent, and the regulatory development that could act as a catalyst for growth.In an article in Strategic Risk, Henning Schaloske, partner at Clyde & Co, argues that the European Union’s ‘Directive on Representative Actions’ will set the stage for a significant rise in class action activity, as it will create a uniform structure that will enable collective actions to be taken across all member states. Schaloske argues that this directive will be the mechanism to open the door for increased class actions, but it will be litigation funders who will play a key role in realising this opportunity.Whilst Schaloske does not see the EU completely emulating the US model, he does see an opportunity for funders to drive further activity, especially in cases related to data privacy misconduct which are enabled through the EU’s General Data Protection Regulation (GDPR). He does note the counter-balancing factor of proposed regulations that would restrict third-party funding, but argues that the trend of high-profile and high-value cases would suggest that litigation funding will still play an important role.
Lex Ferenda Litigation Funding LLC "LF2" is pleased to announce that it recently launched commercial funding operations after completing the first capital close for its Lex Ferenda Litigation Funding Master Fund. The Fund, which will focus its investments on US litigation and domestic commercial arbitration, welcomed several institutional investors whose commitments to LF2 exceeded initial expectations, and brought the Fund substantially closer to its USD $100 million+ target.LF2 is co-founded by Michael German, a veteran litigator and litigation funder with more than a decade of experience resolving high-value, complex commercial litigation, and Chris Baildon, a financial services expert with more than 30 years of industry experience."We are incredibly excited to officially announce our commercial launch and look forward to being disruptive to the litigation finance industry," said Michael German, LF2's Chief Investment Officer. "We have created an investment platform at LF2 that permits us to quickly assess and make informed, data-driven decisions about the potential litigation investments we consider. The resulting transparent, client-focused investment process, which is driven by true subject-matter experts, makes LF2 a trusted partner and advisor for our clients and the law firms that represent them," said German. "In addition, our industry access and deep bench of seasoned litigators and investors make LF2 a trusted investment manager for the Fund's investor-base as well," said Chris Baildon, LF2's Chief Operating Officer.LF2 Differentiates Through Niche Focus and Veteran Team of Industry ProfessionalsLF2 is a privately held investment management firm, with a focus on the litigation, legal, and litigation support and technology markets. As manager, LF2 is primarily focused on single-case investments in US commercial litigation and domestic commercial arbitration, with sizes ranging between USD $1 million and $10 million, although LF2 retains discretion to make all manner of investments on behalf of the Fund. LF2 brings to market one of the most flexible funding mechanisms currently available, with the ability to assess and invest in claims at any point along the dispute resolution life cycle and with flexible guidelines on law firm and client co-investment."We created the investment program at LF2 to specifically address the lack of focus on the customer across the industry," said German. "LF2 solves for this by creating a unique and individualized funding plan for each investment as assessed from the perspective of each of the investment's underlying stakeholders. Our experience shows us that this yields the greatest outcomes for our clients," said German.Executive TeamMichael German – Co-Founder and Chief Investment OfficerMichael is one of the co-founders of and the Chief Investment Officer at LF2. He is primarily responsible for the firm's strategic direction, investments, and fund risk management. Michael is an experienced litigator, trial lawyer, and litigation funder with more than a decade of experience litigating, resolving, and investing in complex commercial litigation and arbitration matters.Chris Baildon – Co-Founder and Chief Operating OfficerChris is one of the co-founders and the Chief Operating Officer at LF2. He is primarily responsible for the firm's operational and compliance efforts as well as its capital raising and investor relations efforts. Chris brings three decades of global investment banking and finance experience, with substantial experience in management, business development, and capital raising across investment verticals, including litigation finance.David Stickney – Managing Director, Underwriting and RiskDavid is LF2's Managing Director, Underwriting and Risk. He is responsible for the firm's case underwriting, investment monitoring, and risk management programs, and supports the firm's business development efforts. David is a renowned litigator and law firm leader who recovered billions of dollars for his clients through complex commercial litigation, earning him recognition as a "Titan of the Plaintiffs' Bar" and a "Litigation Groundbreaker."Advisory BoardHon. Vanessa Gilmore (ret.) – Member of the Advisory BoardJudge Gilmore is a member of the Advisory Board at LF2. She primarily advises the leadership team on new and existing investments, but is also an important strategic advisor to the firm on various legal and dispute resolution matters. Judge Gilmore recently retired from the bench after more than 25 years serving as an Article III judge in the Southern District of Texas.Scott Mozarsky – Member of the Advisory BoardScott is a member of the Advisory Board at LF2. He is an important strategic advisor to the business on legal, data and technology issues. Scott currently leads the M&A and Capital Markets Advisory Practice for a leading middle market investment bank and previously served as a corporate and legal leader to several large multinationals and publicly-traded entities.Institutionally Managed Capital Takes Long-Term View of LF2LF2's first close was led by a leading global financial investment manager with an alternatives portfolio AUM exceeding USD $22 billion. "We are thrilled to have an exceptionally strong investor, with substantial experience in the litigation finance asset class, show such confidence in LF2. With access to significant committed capital and the substantial reach of its industry-knowledgeable investors, LF2 is able to act quickly in meeting plaintiff funding needs, which is crucial to securing quality case investments," said Baildon.LF2 is structured with the objective of meeting the highest standards in investment process management, quality control, risk management, and compliance. For further information about Lex Ferenda Litigation Funding, please visit: www.lf-2.com. For Investor Relations or other questions, please contact: Chris Baildon.
Patent dispute funding has been a prominent topic in recent headlines, largely due to ongoing cases where the area of third-party funding disclosure has become a divisive issue. However, according to new research, this is unlikely to have a dampening effect on this type of litigation finance activity, and in fact, indicators suggest that it will continue to be a dominant sector.An article by Bloomberg Law highlighting the results of its recent Litigation Finance survey suggests that patent litigation remains one of the most active areas of third-party funding, with 23% of lawyers surveyed indicating they had obtained funding specifically for patent cases in 2022. This activity is reflected by the response from funders, with 68% of these companies having committed capital to patent litigation.Of particular interest for those looking ahead to 2023 is the fact that interest in exploring funding for patent law cases has risen dramatically in recent years, with 30% of lawyers expressing interest in 2022, compared to only 11% when asked two years prior. Unless a major regulatory development appears to discourage the use of third-party funding in patent litigation, it seems likely based on this data that we will see continued growth next year.
Although the US has traditionally been the primary jurisdiction for securities fraud litigation, a wave of regulatory developments and landmark cases has led to a much more active international market in recent years. In countries including the UK, Australia and the Netherlands, we are seeing numerous examples of high-value settlements being secured, and litigation funders are playing an increasing role both in providing capital and reducing risk for investors looking to take legal action.A new article by Bloomberg Law details the rise in investor-led litigation against major corporations, highlighting data from Institutional Shareholder Services (ISS) which shows an average of 60 of these lawsuits being brought each year outside of the US, since 2016. Jeff Lubitz, director of securities class actions services at ISS, states that while this trend is not experienced in every jurisdiction, there is clear evidence that in certain countries there is a combination of investors, lawyers and funders working together to actively pursue these claims.Burford Capital’s director of legal finance, Michael Sternhell, argues that the Netherlands and Australia are two particularly promising jurisdictions due to the speed of their legal system and the willingness of the courts to take an inclusive approach to international shareholder participation. Adam Erusalimsky, senior investment officer at Woodsford, also highlighted the important role litigation funders play in this area, as they provide a counterbalance to corporate power and open access to justice for shareholders.
The traditional partnership model for law firms has been one of the bedrocks of the industry for so long, that suggestions of alternative ownership structures have been regularly dismissed without significant debate. However, with the advancement of law firm IPOs in the UK and the rise in adoption of the alternative business structure (ABS), some industry figures see outside investment as the best path forward.Writing in Law.com, Burford co-founder and chief investment officer, Jonathan Molot, argues that while there have been examples of IPOs and outside ownership gone awry, outside equity investment is still the best tool for law firms to innovate. He highlights the fact that the partnership model does not incentivize investment for long-term innovation and development, while outside capital can allow a firm to invest in new technology and services which will benefit firms and their clients.Molot goes on to state that by accessing outside investment, especially from legal finance companies, law firms can explore more flexible billing options for clients, which can be a powerful tool in attracting and retaining customers in such a competitive market. He also raises the currently unstable economic market as another reason why relying on traditional methods of funding can be vulnerable, whereas a third-party funder is able to provide capital and offer a stable foundation for growth and innovation.
Disclosure has been the key word in the litigation funding industry in recent weeks, as an ongoing patent infringement lawsuit brought the issue into the spotlight. However, the latest development in the case suggests that the tide may be turning against funders who seek to maintain a level of discretion over their involvement.Reporting by Reuters details the announcement today that Nimitz Technologies LLC failed in its appeal to prevent a federal judge in Delaware from mandating disclosure of its litigation funding arrangements. The U.S. Court of Appeals for the Federal Circuit ruled in favour of Judge Colm Connolly, stating that the request for disclosure was within the Court’s authority, and did hold relevance to the ongoing patent infringement case.Whilst the Federal Circuit denied Nimitz’s appeal, it did make clear that Judge Connolly’s order was not a request for the plaintiff to make the details of its funding arrangements known to the public, and they would still have the ability to request the disclosure be sealed by the judge.
Litigation funding has been a powerful tool for widening access to justice and driving innovation in the legal sector, and technological evolution continues to provide ongoing sector optimization. Seeking to enable this kind of evolution, one major industry player is setting up a fund to boost technological development for the legal sector.Detailed in an article by Hello Entrepreneurs, LegalPay, the market-leading funder in India, has launched its Justice and Inclusion (JAI) Fund to provide startups and established LegalTech companies with $2 million in capital. The purpose of the fund is to invest in technologies and solutions to make India’s legal system more efficient, and speed up the litigation process.LegalPay’s founder and CEO, Kundan Shahi, stated that the JAI Fund aims to remedy the lack of capital for Indian startups, especially those whose solutions could be beneficial for the country’s legal structure, which has experienced relatively little innovation. In addition to Shahi, the fund’s investment committee includes Kashish Grover, COO of LegalPay and Ojasvi Babbar, CEO of the Amity Incubation Centre.
Mill City Ventures III, Ltd. ("Mill City") (NASDAQ:MCVT), a specialty short-term finance and non-bank lender, announced today that it has entered into a non-binding letter of intent for a merger transaction with Mustang Funding, LLC dba Mustang Litigation Funding ("Mustang"), a Delaware limited liability company owning and operating a Minneapolis-based litigation finance business focusing on the long-term capital needs of law firms, plaintiffs and vendors. Mustang has associated offices in Plymouth Meeting, Pennsylvania and Sarasota, Florida. The letter of intent contemplates Mill City's acquisition of Mustang through a legal structure that is to be determined in connection with reaching a definitive agreement, but with the owners of Mustang receiving a sufficient number of shares of Mill City common stock such that they would own 80% of the total number of issued and outstanding shares of Mill City common stock on a post-transaction basis. The letter of intent is non-binding and obligates the parties only to work cooperatively and in good faith for the purpose of negotiating and entering into a definitive agreement governing the transaction.The letter of intent sets forth certain conditions precedent to any closing of the transaction, and a definitive agreement, if reached, would likely set forth additional customary and negotiated conditions to any such closing. The conditions identified in the letter of intent include the completion of due diligence to the satisfaction of the both parties, a financing-based condition, the consummation of a short-term loan by Mill City to Mustang, the approval of the owners of Mustang and the shareholders of Mill City, together with any related regulatory approvals that may be required, including any required approval by Nasdaq of the continued listing of Mill City common stock after any closing. Any definitive agreement that may be reached is expected to contain other customary and negotiated terms and conditions, and may contain terms and conditions different from those contemplated in the letter of intent.About Mill City Ventures III, Ltd.Founded in 2007, Mill City Ventures III, Ltd., is a specialty short-term finance company providing short-term non-bank lending primarily to small businesses, both private and public. Additional information can be found at www.sec.gov or www.millcityventures3.com.About Mustang Litigation FundingFounded in 2018, Mustang Funding, LLC dba Mustang Litigation Funding looks for best in class capital solutions for the legal industry through funding law firms, plaintiffs, vendors and other opportunistic legal assets. More information can be found at www.mustangfunding.com
Omni Bridgeway is pleased to announce the company's expansion and permanent operations in France, welcoming Leon Ioannou as Investment Manager and Senior Legal Counsel. Based in Paris, Leon will focus on supporting clients and lawyers with non-recourse financing and recovery solutions for legal disputes both in France and internationally. Leon brings extensive legal, financial, and international arbitration expertise across jurisdictions from his career in-house and with leading law firms, most recently as the general in-house legal counsel for the European operations of an international medical device company where he steered the resolution of the company's European disputes and litigation. Prior to that, Leon practiced as a lawyer resolving international disputes at White & Case LLP, Hughes Hubbard & Reed LLP, and Freshfields Bruckhaus Deringer.Leon's has advised clients in international arbitration (both common- and civil-law governed) across industry sectors including energy (nuclear, oil and gas), construction, utilities, telecommunications, pharmaceutical, banking and finance, and professional service industries. Leon has conducted proceedings under most of the world's major arbitral institutional rules as well as ad hoc proceedings under the United Nations Commission on International Trade Law (UNCITRAL) Rules. In Paris, Leon will work closely with the full EMEA team including French trained lawyer, Nevena Ivanova, Investment Manager, Senior Legal Counsel who joined Omni Bridgeway in 2020. Prior to Omni Bridgeway, Nevena gained over a decade of experience in a French boutique law firm where she specialised in fraud, insolvency, asset recovery and international private law litigation. She has deep experience in the enforcement of EU and non-EU judgments and arbitral awards, and regarding the ex-parte authorisations and challenge of various asset attachments, including real estate."Omni Bridgeway has been successfully funding and supporting clients with legal proceedings in France for more than 30 years, including litigation, arbitration, and judgment enforcement proceedings," notes Raymond van Hulst, Executive Director, MD and CIO for EMEA. "We are very pleased to deepen our commitment to our clients in France with Leon joining us in Paris. Leon's excellent track record is based on his deep international arbitration experience and business perspective, gained in leading law firm and corporate in-house roles across various jurisdictions. He is very well positioned to advise law firms, companies, and individuals in France and across borders regarding dispute funding, legal risk management and specialist recovery solutions."Leon Ioannou commented, "I am extremely happy to join Omni Bridgeway, the most respected legal finance provider in the industry with the most experienced team. As international disputes become more complex and require novel financing and legal solutions, we are well-equipped to help our clients manage risk, and provide both legal and financial support. This includes advising and supporting law firms and companies whether they are large established corporations, or small and emerging businesses who operate in our local market."
Leading claims automation solution FinLegal has appointed Connor Goggin, as a Senior Product Specialist, to work closely with US firms and litigation funders to replicate its success in the UK. Connor joins FinLegal with extensive experience in SaaS (Software as a Service) and legaltech sales.
Commenting on the news, CEO, Steve Shinn says: “Many US law firms and claims administrators struggle to obtain information from claimants in a timely fashion and spend unnecessary hours on offline administration and communication. They desperately need online solutions in mass torts, class action, and mass arbitration.”
He continues: “Our solution helps firms reduce the man hours and costs associated with these cases by automating the qualifying, information gathering, and correspondence with claimants and third parties. This leads to more engaged claimants and more fees for firms.
“I am delighted that Connor has joined us to solidify our presence in such an important jurisdiction.”
Commenting on his appointment Connor adds, “I am excited to be joining FinLegal at such a significant growth period for the business. Our platform solves the key challenges that class action and mass torts law firms face including claimant dropout and labour-intensive administration. I am looking forward to working with Steve and the team to establish FinLegal as the leading claims automation solution across the US.”
About FinLegal:
FinLegal is the legaltech provider for the business of disputes. We enable those in the disputes market to do more business by abandoning offline and dated methods and benefitting from automation and online connectivity.
Our claims automation solution removes the costly barriers of claims management - that it's people intensive and often uses dated systems. It streamlines and automates the majority of claims management, claimants self-serve and so legal teams only need to intervene when prompted.
Our funding and After the Event insurance marketplace provides access to funders across the globe and to a range of funding for disputes of different types and sizes, whilst also providing lawyers with visibility and control over their funding requests. Our claimant marketplace links claims management companies, marketing services providers and claim originators in volume claimant work and class actions so you can easily buy or sell claimants, leads or traffic at the touch of a button.
One significant driver of class action litigation over the last year has been the after-effects of Covid, and parties claiming damages for the impact of pandemic-related policies implemented by institutions and businesses. One such class action in the UK targeting higher education institutions looks to be gaining momentum, with law schools now potentially being targeted as well.Reporting by The Law Society Gazette provides an update on the ‘Student Group Claim’, which sees students demanding compensation from their universities for a failure to deliver in-person teaching and wider access to university resources as a result of the pandemic and staff labour actions. The claim which already represents 300,000 students also includes almost 3,000 law students, and is targeting 18 universities across the country.The claim has managed to garner broad student participation due to the involvement of an unnamed litigation funder and the presence of litigation insurance, meaning that there is no risk of legal fees for the students. The claim is being brought by solicitors from Asserson and Harcus Parker, who have suggested that if successful, each student could receive compensation of up to £5,000 and beyond.
Whilst the large returns on investment for litigation funders are both lauded and criticized by commentators, there is never an absolute certainty that funders will see a positive return on each and every case. This uncertainty has been brought into the spotlight once more, after one funder’s parent company reported recent losses from two unsuccessful cases for its funder subsidiary.A new article from The Law Society Gazette covers the announcement by RGB Holdings, that its high profile litigation funding business, LionFish, has suffered two losses in recent cases that it had financed. The losses declared to the London Stock Exchange, sees LionFish incur a £4 million non-cash write-off for 2022, having failed to meet its expected £2.3 million in profits. However, the actual cash value of these losses only total £1.1 million.Nicola Foulston, RBG’s chief executive, stated that she was ‘disappointed’ with these results from LionFish and that the company would review the funder’s strategy with an eye towards reducing exposure to the £3.3 million in LionFish's outstanding litigation commitments. RBG stated that it would provide a further announcement in 2023.Editor's note--a previous version of this piece listed LionFish's commitments as being under review. That is incorrect. It is the overall strategy under review. We regret the error.
In the conversation around litigation funding and disclosure, few cases have attracted as much attention as the ongoing proceedings between a Delaware federal judge and Nimitz Technologies, a patent holding company. Since LFJ last reported on Nimitz’s appeal of Judge Colm Connolly’s order for further disclosure regarding its litigation funding arrangements, Judge Connolly issued an 80-page opinion, detailing his reasoning for his order.Outlined in articles by Reuters and Bloomberg Law, Judge Connolly’s opinion went further than ever before by raising the spectre of companies abusing the court system through these patent disputes, and using a “shell LLC” to bring lawsuits without incurring any liability. Connolly re-asserted that despite Nimitz’s protests, the Court retained this “inherent authority” to order disclosure of other parties involved in the case, where there are concerns that their identity is being hidden from both the judge and the defendants.Whilst all participants in the case will have to await the result of the mandamus petition filed by Nimitz, it is clear that the lasting consequences of Judge Connolly’s initial order are far from complete and that the outcome will have a significant impact on the intersection of third-party funding, patent disputes and disclosure.Judge Connolly’s opinion can be read in full here.
Whilst the power of technology giants has increased tremendously over the last two decades, this growth in market dominance has also attracted the attention of those wary of monopolistic practices by these companies. With no looming threat of any kind of government-led crackdown on these market leaders, the courts have become the new battleground for those seeking to re-assert competition and balance to the Technology industry.An article in TechCrunchdetails the latest development in one such case, as Google is facing a class action claim in the UK for its allegedly anti-competitive practices in the Adtech space. This suit, along with another claim in the Netherlands, was first reported in September and focuses on the suggested malpractice by Google when dealing with digital publishers. Google is accused of controlling pricing and dictating terms that are favourable to its own ad platforms.Both cases are being financed by Harbour Litigation Funding, with the UK claim seeking to secure up to £13.6 billion in damages for approximately 130,000 businesses who were harmed by Google’s alleged anti-competitive behaviour. The UK suit is being brought to the Competition Appeal Tribunal (CAT), with UK law firm, Humphries Kerstetter, acting for the plaintiffs.
The UK remains one of the premier jurisdictions for litigation funding, with an array of funders based in the country and a regulatory structure that largely allows for the industry to self-regulate. However, within the UK, there is a natural bias towards funding opportunities in London, both in terms of value and volume, leading some industry figures to highlight the need for expansion to the UK’s regional markets.Writing in The Scotsman, Nicola Ross, a partner at Morton Fraser, argues that litigation funding could be the key to providing added resilience for Scottish businesses in this difficult economic climate. However, the article also suggests that due to the often lower value of disputes in Scottish courts, traditional funders based in London have not taken an interest in these cases.Ross does highlight that with the Scottish legal system now allowing class actions in the form of group proceedings, there should be more opportunities of interest to these funders. However, the speed at which this evolution can happen is of key importance, she argues, as Scottish businesses struggling under the instability of the financial markets will not be able to continue accessing legal redress without support from the third-party funding sector.
Litigation funders in the UK have been increasingly vocal about the potential for a surge in mass class actions, paralleling the rise in large-scale class actions in other prominent jurisdictions. New research demonstrates that whilst funders and law firms may be optimistic about these opportunities, the general public remain largely skeptical towards the practice, although certain signs point to increasing acceptance in some areas.Reporting by The Law Society Gazette highlights forthcoming research by Portland Communications, which shows that majorities of respondents would support class actions where they were directly affected, especially where businesses have allegedly committed environmental harm. This was reflected by the fact that energy and finance were the two top industries where the public would favour class actions taking place.However, a major stumbling block for class actions in the UK is that less than half of respondents felt class actions were likely to actually secure compensation or even had the capability to force companies or institutions to take accountability. More worryingly for the litigation finance industry, nearly a quarter of those surveyed said they would not join a class action where funders received a ‘large percentage’ of the award.The survey suggests that a major hurdle for both lawyers and funders is the need to dispel the assumption that it is they who are the ones benefiting from class actions, rather than individual claimants.
Deminor further develops its litigation funding activities in Germany with the addition of Patrick Rode in Dusseldorf. Patrick Rode will bring experience and expertise in commercial, securities and antitrust litigation to further increase Deminor’s footing in the German litigation funding market.Deminor is pleased to announce the appointment of Patrick Rode as Senior Legal Counsel. He will strengthen the team dedicated to the German litigation funding market already consisting of Felix von Zwehl, Dr. Malte Stübinger and Jasna Jarmuschke.Patrick will be based in Dusseldorf and strengthens the German team in Brussels and Hamburg in Deminor’s continued approach to expand within the German market. Erik Bomans, CEO of Deminor: “After the opening of Deminor’s German office in Hamburg in 2021, the demand for Deminor’s litigation funding services in Germany continues to increase. We very much welcome the opportunity to bring Patrick on board and to now also have a presence in the western region of Germany known as the Rhineland.”Patrick is an experienced commercial litigator who is admitted to the bar in Germany and who has worked on a broad range of domestic and multi-national disputes. His focus lies on cross-border post M&A-litigation and antitrust damages disputes, which are becoming increasingly relevant for Deminor’s business. Patrick comes with experience working for several renowned national and international law firms, most recently as an Associate with Latham & Watkins in the firm’s Litigation & Trial practice and as a Litigation & Disputes Partner with a medium-sized German law firm.Patrick was recognised by the US publishing house Best Lawyers in the category „Ones to Watch 2023” in Litigation.On joining Deminor, Patrick comments: “I am absolutely delighted to be joining a firm with such a great track record and growth rate. Litigation funding is still at a very early stage in Germany, and I look forward to promoting the benefits of third-party funding and especially the opportunities Deminor has to offer.”
Following the COP 27 summit earlier this month, there has been much discussion about the role litigation funders can play in financing claims against companies that fail to meet ESG standards, or act with disregard towards the environment. A new case brought against UK utilities companies demonstrates this very potential, as a major industry funder has stepped in to finance the claim.Announced in a release by UK law firm, Leigh Day, a new competition damages claim being brought against water and sewage management companies is being funded by Bench Walk. The opt-out claim, brought on behalf of UK households, alleges that these companies unlawfully disposed of untreated sewage and wastewater into public waterways.Zoë Mernick-Levene, partner at Leigh Day, noted that this is a landmark case, as it is the first environmentally-focused claim being brought before the Competition Appeal Tribunal (CAT). The funding agreement and additional ATE insurance for the case were brokered by Factor Risk Management, whilst AlixPartners are attached to the case in the role of economic experts.
As the litigation finance industry has matured, the possibility of funders running afoul of legal oversight grows. This was the case in a recent settlement between RD Legal Funding LLC and the U.S. Consumer Financial Protection Bureau.Reporting in Reuters covers the announced settlement, which highlighted the funder’s alleged predatory lending practices with 9/11 first responders, where it allegedly charged 250% interest on loans to these clients. While RD Legal did not admit any wrongdoing, the settlement required the funder to pay a whopping $1 for breaking New York’s state law concerning high-interest loans.RD Legal had argued that the financial assistance it provided to the first responders were not loans, but instead ‘sales of legal receivables’ as part of its funding agreements. The CFPB and the New York Attorney General’s Office had originally sought higher damages outlined under the state’s consumer protection law. However, the CFPB stated that this settlement provides the first responders access to the victim relief fund, totalling $482 million–hence the miniscule agreement.
Omni Bridgeway is delighted to announce new arrivals to its growing team in Asia, reinforcing the company’s leading position as the largest and most recognised dispute finance team in the market. We also congratulate senior colleagues on their promotions. We welcome Eloise Matsui as Investment Manager. Eloise joins us from Stephenson Harwood where she was a partner in the restructuring and insolvency team in Hong Kong, and previously King & Wood Mallesons where she was a member of the litigation and regulatory team. Eloise brings a wealth of expertise in restructuring, insolvency and cross-border litigation and has acted for foreign, listed and private companies, creditors and insolvency practitioners across the breadth of restructuring, insolvency, enforcement and associated litigation scenarios. Mitch Dearness joins our team as Investment Manager, bringing expertise in arbitration and cross-border litigation, with particular experience in the infrastructure, mining and energy sectors. Mitchell joins us from Herbert Smith Freehills where he was a Senior Associate in the Singapore disputes team. Kristen Smith (Melbourne)andEwen McNee(Sydney)have been promoted to Senior Investment Managers, and Niall Watson-Dunne’s role as Investment Manager (Sydney) expands in recognition of his case management responsibilities. We acknowledge their combined extensive experience in legal finance and valuable role in the company’s development. Cheng-Yee Khong (Hong Kong) has been appointed Senior Relationship Manager, responsible for new case origination and relationship management across jurisdictions. “Our expansion is in direct response to the market’s flourishing demand for our financial solutions, and reflects our ability to attract leading talent. We are thrilled to welcome Eloise and Mitch to our wonderful team and further expand our services to clients.” Tom Glasgow, Managing Director and Co-Chief Investment Officer (APAC), Portfolio Manager – Global International Arbitration “Congratulations to colleagues on well-deserved promotions. It is the talent and hard work of our people that results in Omni Bridgeway being consistently recognised as the leading legal finance team.”Oliver Gayner, Managing Director and Co-Chief Investment Officer (APAC).
ABOUT OMNI BRIDGEWAY
Omni Bridgeway is the global leader in legal finance and risk management, offering dispute finance from case inception through to post-judgment enforcement and recovery. Omni Bridgeway is listed on the ASX and has operations around the world.
Litigation Capital Management (LCM) has announced that it is bolstering its senior leadership with the appointment of Danny Kinnear as Head of Corporate Origination. Announced via LinkedIn, LCM’s appointment of Mr. Kinnear will draw on his vast experience across risk management and finance, building on previous accomplishments including leading Deutsche Bank’s European Structured FX Sales, and previously serving as the Head of EMEA Corporate FX Sales for Nomura. Speaking about joining the LCM team, Mr. Kinnear highlighted his desire to help “clients access innovative solutions” in all areas of financial services, and noted the synergy between his own approach and LCM’s solutions, which have positioned the firm as a “global leader in litigation funding.”
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