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Announcements Consumer

Mill City Ventures III, Ltd. Provides Short-Term Loan to Mustang Litigation Funding

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 Funding Founded 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
Commercial Deals

Litigation Funding as a Solution to Corporates Damaged by ‘Black Swan’ Events

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.
Case Developments Commercial

BVI Court Ruling Affirms a Client’s Right to Disclose Confidential Information to Funders

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.
Commercial Deals

Litigation Funding as a Catalyst for European Class Action Growth

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.
Announcements Commercial Fundraising

NEW LITIGATION FINANCE FIRM – LEX FERENDA LITIGATION FUNDING – EXECUTES SUCCESSFUL LAUNCH; EXCEEDS EXPECTATIONS AT FIRST CLOSE

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 Professionals LF2 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 Team Michael German – Co-Founder and Chief Investment Officer Michael 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 Officer Chris 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 Risk David 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 Board Hon. Vanessa Gilmore (ret.) – Member of the Advisory Board Judge 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 Board Scott 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 LF2 LF2'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.
Commercial Deals

Research Suggests Litigation Funding for Patent Cases is on the Rise

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.
Commercial Deals

Funders Play Vital Role in Enabling International Securities Fraud Litigation

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.
Commercial Regulatory Issues

Burford Co-Founder Says Outside Investment is Key to Law Firm Growth

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.
Case Developments Commercial

Nimitz Loses Appeal Against Judge’s Funding Disclosure Order

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.
Commercial Fundraising

LegalPay Seeks to Boost Legal Innovation Through New Fund

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.
Announcements Consumer

Mill City Ventures III, Ltd. Enters into Letter of Intent to Acquire Mustang Funding, LLC

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 Funding Founded 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
Announcements Commercial People Moves

Omni Bridgeway expands in France with new Paris operations, welcomes Leon Ioannou

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." 
Announcements Consumer People Moves

FinLegal invests in international growth

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.

Commercial Deals

Funded Class Action Against UK Universities over Covid Policies May Include Law Schools

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.
Case Developments Commercial

Funder’s Strategy to be Reviewed After Two Losses

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.
Case Developments Commercial

Judge Issues Fierce Defense of Litigation Funding Disclosure Order in Patent Dispute

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.
Case Developments Commercial

Harbour Funds £14 billion Claim Against Google for Anti-Competitive Adtech Practices

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 TechCrunch details 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.
Commercial Deals

Litigation Funding Could Play a Key Role in Securing Scottish Business Resilience 

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.
Commercial Regulatory Issues

New Research Suggests UK Public are Skeptical About Funder Involvement in Class Actions

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.
Announcements Commercial People Moves

Deminor further develops its litigation funding activities in Germany

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.”
Commercial Deals

Bench Walk to Fund Environmental Claim at UK Competition Appeal Tribunal

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.
Consumer

Funder Agrees to $1 Settlement with CFPB over 9/11 Fund Litigation

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.
Announcements Commercial People Moves

Omni Bridgeway APAC team expands and announces senior appointments

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) and Ewen 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.
Commercial People Moves

LCM Strengthens Global Leadership with New Hire

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.”
Commercial Deals

Law Firms Face Price Pressure from Clients Looking to Lower Legal Costs

Faced with global economic uncertainty, litigation funding has been classified as an investment market insulated from broader recessionary pressures. However, law firms are not seeing the same level of protection, and are facing increased competition from competitors who can offer lower prices to meet their clients’ restricted budgets. Reporting by Legal Futures highlights the results of a survey conducted by Harbour Litigation Funding, which found that 44% of law firm partners are negotiating with clients who are seeking lower legal fees, leading to 46% of those surveyed reporting clients moving business to firms with less expensive rates. This was further compounded by respondents highlighting the fact that their clients were increasingly depending on their in-house legal counsel to handle matters. Harbour’s Chief Investment Officer, Ellora MacPherson, stated that she expects these compounding factors to lead to an increased strain on law firms’ own balance sheets. MacPherson suggests that outside of lowering their prices, law firms will need to innovate through technology to reduce internal costs, whilst seeking more creative, low-cost methods of supporting clients.
Announcements Case Developments Commercial

Legal claim launched against Great Northern, Southern and Thameslink after millions double-pay for fares in London

A hearing has been set by the Competition Appeal Tribunal (“CAT”) to take place on the first available date after 20 February 2023 (the “CPO Hearing”).

The CPO Hearing is in respect of a claim launched on 24 November 2021 by Justin Gutmann, formerly of Citizens Advice, on behalf of millions of passengers who have allegedly paid twice for part of their journeys whilst travelling with Govia Thameslink Railway (“GTR”), (the “Proposed Claim”).

The Proposed Claim is against GTR (and its parent companies) which operates the following franchises:

i.                     Thameslink

ii.                   Southern

iii.                 Great Northern

Following a case management conference which took place on 15 November 2022, the CAT has confirmed a further hearing should take place so that the CAT can consider the following:

i.                     if Mr Gutmann (the person proposing to be the class representative) is suitable to act on behalf of the proposed class and should be certified to bring the claim; and

ii.                   if the Proposed Claim itself is suitable to be brought as a collective action and whether it should proceed to a full trial.

The CPO Hearing is to take place on the first available date after 20 February 2023.

Background to the Proposed Claim

Mr Gutmann alleges that GTR, as the operator of the Great Northern, Southern and Thameslink franchises has breached competition laws by charging TfL Travelcard holders too much for travel  on their routes.

Travelcard holders have already paid for their travel within the relevant TfL zones, so a Travelcard holder would only need to purchase a (cheaper) ‘boundary’ fare or ‘extension’ fare for the remainder of their route, to get to their destination. Mr Gutmann alleges that GTR does not make boundary fares sufficiently available for purchase. The claim is estimated to be worth around £73.3 million in damages.

Who is eligible?

Passengers who owned a Travelcard at any time from 24 November 2015 and also purchased a rail fare from a station within the zones of their Travelcard to a destination outside of those zones may be eligible for compensation.

What next?

The CAT will now determine whether or not Mr Gutmann’s claim is allowed to proceed to trial. If the claim is permitted to go forward, then those affected will not have to pay any legal fees, nor contact lawyers. 

Affected passengers who live in the UK will automatically be included in the claim, although they can choose to opt-out in due course.

Affected passengers who do not live in the UK will also be eligible to join the claim but must proactively opt-in.

As the case progresses, we will provide more detail as to what rail users will be required to do to either opt-in or opt-out. 

Further information 

The claim’s website and social media channels are available from the day of launch at BoundaryFares.com,  where affected passengers can sign up to receive further information regarding the legal proceedings. Justin Gutmann is also available for interview.

Commercial Legal Innovation

Litigation at the Forefront of Future Climate Activism

As we have already seen so far this year, litigation funders are keen to target capital towards ESG cases, and have even gone so far as to fund individual law firms to pursue such litigation, as was the case with North Wall Capital’s financing of PGMBM. On the back of the COP 27 summit, some industry commentators are looking to the future of such litigation, focused on holding entities that disregard their climate impact to account. In an article for Sentry Funding, Rachel Rothwell provides an overview of the current state of litigation targeting environmental issues, as well as looking ahead to how this space will evolve. Citing a study by Columbia Law School, Rothwell highlights that there are over 2,000 cases involving issues related to climate change. Furthermore, the article notes that this type of litigation has progressed from being primarily focused on misdeeds by nation states to now include corporations. Rothwell also uses the examples of cases brought against companies like Vedanta Resources and Royal Dutch Shell to demonstrate the successful impact climate activists have had in courts. The article suggests that ‘shareholder activism’ is likely to be at the forefront of future climate-related litigation, and will expand to include a broader range of companies that have less immediate impact on the environment.
Case Developments Commercial

Brown Rudnick Announces 2023 Litigation Funding Conference

As the European funding market continues to grow, the demand for industry gatherings and exchanges of ideas between thought leaders is also on the rise, giving way to another industry conference in the coming year. Building on the success of its 2022 event, Brown Rudnick announced its European Litigation Funding Conference 2023, set to be held in London on Thursday 16 March 2023. The one-day conference will feature the firm’s own partners alongside industry leaders from other leading UK and European funders, insurers and service providers. Brown Rudnick’s inaugural conference held in May of this year included speakers from Bench Walk Advisors, Therium, Burford and Deminor. Whilst the agenda for the 2023 event has not yet been released, the 2022 conference saw discussion topics ranging from ‘the rise of class actions’, to the interplay of ‘litigation funding and ESG’.
Commercial

Nimitz Appeals Litigation Funding Disclosure Order in Patent Dispute

In the evolving back-and-forth between disclosure and non-disclosure of third-party funding, it continues to be demonstrated that individual court decisions are the driving force for momentum in either direction. An ongoing patent dispute case in Delaware has reinforced this narrative, as the plaintiff seeks to appeal a court ordered disclosure of any litigation funding arrangements. Reporting by Reuters reveals that Nimitz Technologies has appealed Judge Colm Connolly’s order to reveal the specifics of its relationship with Maxevar, arguing that such information is irrelevant to its lawsuits and should remain confidential. Nimitz maintained its position that Maxevar has acted only as a consultant for the litigation and that it has not received any funding from Maxevar that would fall under Judge Connolly’s standing order to disclose such arrangements. In response to the appeal, the U.S. Court of Appeals has issued a temporary pause on the order, which will also provide the opportunity for the defendants to respond. This case also bears similarity to another of Judge Connolly’s proceedings, VLSI Technology’s patent dispute with Intel Corp, where he ordered a pause to that litigation after stating that VLSI did not sufficiently disclose details around its financial backing. Whilst the outcome of both these disclosure orders is not yet apparent, it is clear that courts will continue to engage in close scrutiny of third-party funding arrangements.
Case Developments Commercial

Alan Dershowitz Ordered to Disclose Identity of Funders in CNN Lawsuit

One of the biggest topics of discussion around litigation funding at present is the issue of transparency, and the extent to which the presence of third-party funding in cases should be disclosed. Whilst this discussion is nothing new within the industry, an ongoing high-profile case has pushed the issue into the spotlight of mainstream commentary. Analysis by the Freedom of the Press Foundation, highlights the ongoing matter of a defamation lawsuit being brought against CNN by the famous lawyer and professor, Alan Dershowitz. The defendant's request that the identity of Mr Dershowitz’s funders be disclosed has now been granted by a federal district court judge.  Magistrate Judge Patrick M. Hunt explained his decision by noting that it is relevant for the court to know whether the plaintiff’s funders are seeking to advance their own agenda, rather than simply supporting Mr Dershowitz’s attempt to seek damages. Mr Dershowitz had previously revealed the existence of third-party funding, the “Alan Dershowitz Legal Defense Fund”, but did not identify which individuals or groups actually contributed to this fund.  Whilst this case differs from the majority of commercially funded litigation, both in its participants and the nature of the case, it does stand out as another data point in the trend of courts growing increasingly active in mandating disclosure of the presence of third-party funders.