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

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

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

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

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

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

Ward and Smith is pleased to announce that litigation attorney Lynwood Evans has been appointed to the Plaintiffs' Executive Committee in the litigation over contaminated water at Camp Lejeune. This appointment is particularly significant as we are quickly approaching the first anniversary of the Camp Lejeune Justice Act. This legislation paved the way for veterans, family members, and workers stationed on the base between 1953 and 1987 to seek compensation and justice for their suffering. However, because claims of this nature have never before been litigated, there has been substantial uncertainty and limited progress made since the passage of the Act despite tens of thousands of claims having been filed. Everyone is hopeful that this newly appointed leadership structure will provide the framework for progress. The Executive Committee assists and advises lead counsel and co-lead counsel in the undertaking of coordinating and conducting these proceedings. Its members also serve on subcommittees to execute a comprehensive litigation plan and ensure oversight, accountability, and coordination throughout the process. One of the subcommittees is the Law and Briefing Subcommittee, on which Mr. Evans will serve.  Reflecting on his new role, Mr. Evans stated, "I am honored to be appointed to the Plaintiffs' Executive Committee and the Law and Briefing Subcommittee in this crucial litigation. Together with the dedicated leadership team, I am confident that we will be able to work collaboratively with the Government and Court to create the framework within which these claims can eventually be brought to conclusion." Mr. Evans is now the third Ward and Smith attorney chosen for a leadership position in this historic litigation process. Recently, the US District Court of the Eastern District of North Carolina named attorneys Charles Ellis and Ret. Major General Hugh Overholt as Liaison Counsel. They are serving as intermediaries between the Court, the Plaintiffs' Leadership Team, and unrepresented victims. "We are encouraged by the appointment of 3 of our attorneys to leadership positions in this groundbreaking litigation and believe that their participation will help propel the legal process forward," remarked Brad Evans, Ward and Smith's Co-Managing Director. Ward and Smith's entire Camp Lejeune litigation team is dedicated to advocating for victims seeking justice for damage caused by the water contamination. Those interested can contact Ward and Smith directly or visit our website for more information about how we can help them begin their journey toward justice. About Ward and Smith Ward and Smith is a full-service law firm in North Carolina with offices in Asheville, Beaufort, Greenville, New Bern, Raleigh, and Wilmington. The firm has more than 100 attorneys knowledgeable in more than 35 practice areas, from agribusiness to zoning. For more information, visit https://www.wardandsmith.com/.

Cases with a prolonged duration and timelines that span nearly a decade are not uncommon for those in the business of litigation finance. However, even in cases where claimants receive a favourable judgement, there is always the issue of determining the size of the award, which further prolongs these lawsuits. A recent article by Bloomberg Law provides an update on the three-day trial in the case of Petersen Energia Inversora, S.A.U. v. Argentine Republic, which ended with the opposing parties still $6.5 billion apart on what they think the proposed payout should be. The case, which dates back to 2015, was brought on behalf of YPF SA shareholders, who argued that the Argentine government failed to offer a required payout after it re-nationalized the oil company in 2012.  As LFJ previously reported, Judge Loretta A. Preska ruled that Argentina was liable for the shareholders’ losses in a summary judgement in March of this year. During last month’s trial in the Southern District of New York, the shareholders argued that the payout could amount to as much as $16 billion, whilst Argentina provided a much lower estimate of $9.5 billion. The significant distance between the two amounts revolved around a number of key issues, including the date that the government took back control of YPF, with the two parties specifying dates that are three weeks apart.  The outcome of the trial has particular significance for Burford Capital who invested $16.6 million in the litigation, and following the March judgement, had stated that the final award could total in excess of $7.5 billion. This figure is notably lower than Argentina’s proposed payout. However, Judge Preska provided no estimate of when she might deliver a ruling on the payout and attorneys for the Argentine government have already made clear that they will appeal the award, regardless of the Judge’s ruling.

Legal-Bay, the Pre-Settlement Funding Company, reports that the Roman Catholic Diocese of Syracuse, New York has just announced a $100 million settlement for sexual abuse plaintiffs. With approximately 400 claimants, settlements average out to $250,000 per case, but some plaintiffs will receive more or less than that amount based on the severity of the abuse incurred. The settlement is part of the diocese's bankruptcy arrangement, a situation they were forced into when faced with the overwhelming number of victims who've come forward with claims of childhood sexual abuse inflicted by clergy members and/or church employees. The case filings really piled up once the state of New York extended their statute of limitations, allowing victims to pursue lawsuits long after the abuse had taken place. If you are a plaintiff involved in an active clergy sexual abuse lawsuit and need an immediate cash advance lawsuit loan against an impending settlement, please visit Legal-Bay HERE or call toll-free at 877.571.0405. Chris Janish, CEO of Legal-Bay, says, "This latest Syracuse settlement shows that victims of childhood abuse can expect to receive justice even if the diocese declares bankruptcy. As six of New York's eight dioceses have already filed chapter 11—and all are facing similar lawsuits—we expect to see many other cases settling in comparable fashion nationwide."

Legal-Bay, The Pre Settlement Funding Company, announced today that they are now adding mesothelioma victims to their list of Johnson & Johnson talc plaintiffs. The pharmaceutical company just lost their most recent court case, resulting in a landmark $18 million verdict. Both J&J and plaintiffs/lawyers await the next steps in what has been a painfully slow process. Plaintiffs allege that J&J talc-based baby powder is directly responsible for causing serious medical issues ranging from skin melanoma to ovarian cancer, and point out that the company has long been aware of the health risks associated with their product. Several studies dating back to the 1970s concluded that talc particles increase a person's chances of developing cancer, and evidence suggests that J&J has been intentionally concealing the results for decades.  Johnson & Johnson Baby Powder Talc cases are on track to rank among the largest mass tort settlements in U.S. history, predicted to cost J&J over $10 billion to resolve the 100,000+ claims. With the newly added mesothelioma verdict, the pressure is on. J&J has attempted to settle the cases via bankruptcy filing and a $9 billion payout. However, plaintiffs say that not only is the offered amount insultingly inadequate when one considers the large number of claimants in these lawsuits, but may be an improper use of the bankruptcy code as well, and are asking the U.S. Justice Department to investigate. If you require an immediate cash advance from your anticipated Johnson & Johnson talc baby powder lawsuit settlement, please visit the company's website HERE or call 877.571.0405  Chris Janish, CEO of Legal-Bay, said, "The time has come to move this litigation forward once and for all. Too many victims are not able to have their day in court due to the severity of their injuries; some have even died before seeing justice prevail. While J&J has offered to settle the cases, the amount seems to be a fraction of what juries are awarding in both talc and mesothelioma verdicts of late." Legal-Bay's sources close to the litigation believe that the parties will try to reach a global agreement by year's end, however, payments could be delayed for another two years due to the sheer number of claims to process. Legal-Bay is one of the few legal funding companies who are providing some financial relief to victims and their families with risk-free, non-recourse cash advance settlement loans.

Earlier this week, the UK Supreme Court handed down a long-awaited judgement that many believe will have a significant impact on the short-term future of the UK litigation funding market. The ruling in the case of R (on the application of PACCAR Inc and others) (Appellants) v Competition Appeal Tribunal and others (Respondents) held that litigation funding agreements (LFAs), where the funder’s remuneration is based on a percentage of the recovered damages, should be classified as damages-based agreements (DBAs). Whilst we cannot yet predict how the industry will respond, nor whether we will see legislative action from Westminster to address this issue, it is important to look back at how we arrived at this moment.  We should also consider the variety of reactions to this judgement and assess whether industry leaders, analysts and commentators view this as an inflection point for litigation finance in the UK, or simply another challenge that funders will have to adapt to moving forward. Background to the Judgement The journey that led to the Supreme Court’s judgement on 26 July 2023 can be traced back to its beginnings in July 2016, when the European Commission (EC) found that five truck manufacturers – MAN, Volvo/Renault, Daimler, Iveco, and DAF – had breached the European Union’s antitrust rules. The Commission stated that these companies had “colluded for 14 years on truck pricing and on passing on the costs of compliance with stricter emission rules”, and imposed a fine of nearly €3 billion. Only MAN avoided a fine due to its role in disclosing this cartel’s existence to the EC. Unsurprisingly, the Commission’s fine was not the end of the story, as customers across Europe, who had bought trucks from companies involved in the cartel, began to take legal action in an effort to seek financial compensation from the manufacturers. Legal proceedings were brought in various jurisdictions across Europe, including claims in the Netherlands, Germany and the UK. In the UK, the Road Haulage Association Ltd (RHA) and UK Trucks Claim Ltd (UKTC) sought collective proceedings orders (CPOs) from the Competition Appeal Tribunal (CAT), to bring collective proceedings on behalf of these customers against DAF and other truck manufacturers. As is the case with many such claims brought, the RHA and UKTC each secured third-party litigation financing from Therium and Yarcombe respectively. The LFAs for both claimants were structured so that in the event of a successful outcome, the litigation funders would receive a financial return based on a percentage of the damages recovered. In response, the DAF opposed the CPOs and argued that such litigation finance arrangements fell under the classification of ‘claims management services’, as defined by the Compensation Act 2006. Therefore, DAF asserted, the LFAs actually constituted DBAs as defined in section 58AA of the Courts and Legal Services Act 1990, which would mean that the LFAs were unenforceable, as they failed to comply with the requirements of the DBA Regulations 2013. In 2019, the CAT ruled against DAF and found that the LFAs were not DBAs according to the meaning of section 58AA, thereby asserting that the agreements were both lawful and enforceable in the case of the CPOs sought by RHA and UKTC. Subsequently, DAF’s appeal to the Court of Appeal was denied due to a lack of jurisdiction, but proceeded as a Divisional Court to hear DAF’s requested judicial review of the DBA issue. In 2021, the Divisional Court’s judges unanimously dismissed DAF’s claim and upheld the CAT’s ruling, concurring with the tribunal’s decision that the LFAs should not be considered DBAs. Under the leap-frog procedure, DAF appealed directly to the Supreme Court, with hearings taking place on 16 February 2023. The Court also gave the Association of Litigation Funders of England & Wales permission to intervene and make written submissions for the appeal.  The Judgement After five months of waiting, the Supreme Court released its judgement on 26 July and sent shockwaves through the UK litigation funding industry, as it overturned the CAT and Court of Appeal decisions. Lord Sales’ ruling was in clear agreement with DAF that LFAs should be considered “claims management services” as described in the Compensation Act 2006, meaning that they are in fact DBAs and therefore unenforceable. Lord Sales’ judgement explored the wording of the 2006 Act in detail and found that: ‘Parliament deliberately used wide words of definition in the 2006 Act precisely because of the nebulousness of the notion of “claims management services” at the time and in order to ensure that the general policy objective of Part 2 of the 2006 Act would not be undermined.’ Furthermore, he clarified that: ‘The language of the main part of the definition of “claims management services” in section 4(2)(b) is wide and is not tied to any concept of active management of a claim.’ As a result, Lord Sales concluded that LFAs cannot be excluded from the definition of “claims management services” simply because litigation funders do not actively manage the claim itself. The judgement acknowledged the impact that the ruling would have on the funding industry, stating that ‘the likely consequence in practice would be that most third party litigation funding agreements would by virtue of that provision be unenforceable as the law currently stands.’ Lord Reed, Lord Leggatt and Lord Stephens all joined Lord Sales’ judgement in agreement, but Lady Rose offered a sole dissenting judgement and agreed with the previous rulings of the Divisional Court and the CAT. In the conclusion to Lady Rose’s dissent, she clearly rejected Lord Sales’ interpretation, arguing that all of the legislation and case law shows that: ‘Parliament did not intend by enacting section 58AA suddenly to render unenforceable damages-based litigation funding agreements’. Despite this dissent, the result of the Supreme Court’s judgement is that not only are the LFAs in the DFA case unenforceable, but it is also true that the majority of similar LFAs are likely to be held as unenforceable. Industry Reaction In the two days since the judgement was released by the Supreme Court, we have seen a wide variety of responses to the ruling, ranging from strong opposition, to those who have argued for a more cautious and patient approach to see what the consequences of this decision will be. In a poll on LFJ’s LinkedIn page, we asked the question: What impact will the recent UK Supreme Court ruling have in regard to dissuading funders from pursuing meritorious claims in the UK? As of the time of publication, 41% of respondents agreed that it would have a ‘significant impact’, 41% stated that it would have a ‘minor or moderate impact’, whilst 19% believed it would have ‘no meaningful impact’. Clearly, most respondents believe that although there will be a noticeable impact on funders, there isn't yet a consensus as to whether the impact will be significant in regard to funders pursuing claims in the UK. As mentioned above, responses to the ruling from inside the industry have varied over the last 48 hours.  The International Legal Finance Association and the Association of Litigation Funders of England and Wales came out with a joint statement on the day of the judgement, restating their opposition to the decision, but suggesting that its impact may not be severe: “The decision is not generally expected to impact the economics of legal finance and will not deter our members’ willingness to finance meritorious claims. It will only affect how legal finance agreements are structured so that they comply with the regulations and individual financiers will have been considering what if any changes are needed to their own legal finance agreements as a consequence of this decision.” Woodsford’s chief investment officer, Charlie Morris called on the UK’s lawmakers to take proactive steps to address this ruling: “This decision is bad news for consumers and other victims of corporate wrongdoing. Parliament urgently needs to reclarify what its intentions were when it introduced DBAs, and take any necessary remedial action to ensure the proper functioning of the CAT to the benefit of those who have been wronged.” Mohsin Patel, director at Factor Risk Management, acknowledged that whilst the “full extent of fallout” is not yet known, the judgement must also be considered in a wider context: “The outcome of this judgement arises in the main due to the failure of legislators to set out a clear and consistent legal framework, despite attempts made to clarify the law, and instead leaving it to the Supreme Court to deal with the legislative and regulatory patchwork that exists. The ultimate beneficiaries of this decision will be the large corporates who utilise every trick in the book to frustrate and delay meritorious claims. This decision is therefore a bad day not just for funders and lawyers but for consumers in the UK as a whole.” Glenn Newberry, head of costs and litigation funding at Eversheds Sutherland, also emphasised the impact the judgement would have on consumers: “The decision is potentially a blow for the government as the collective funding of consumer claims has helped bridge the gap caused by the erosion of state funded legal assistance for civil claims. Funders themselves may well start to actively lobby to seek legislation which effectively reverses this decision.” Tets Ishikawa, managing director of LionFish, suggested that the judgement itself is hardly the end of the story, rather the beginning of a new chapter for litigation funding: “It’s fair to say that few expected this judgement. It certainly raises more questions than it answers, with the potential for a multitude of unintended consequences extending beyond litigation funding agreements. At the same time, the judgement leaves significant scope for litigation funding agreements to continue their evolution and long term growth in a compliant way, so that it continues supporting the drive to improve access to justice”. Neil Johnstone, barrister and founder of FundingMyClaim.com, argued that the initial shock from the decision will naturally be followed by a measured and effective response from funders: “The fact that the Supreme Court’s decision has been widely reported as a ‘Shockwave’ for the industry perhaps shows how unexpected this result was. However, prudent funders who have taken steps to redraft existing agreements where possible may now be counting the benefits of having ‘hoped for the best but prepared for the worst.’ Of course, a key feature of shockwaves is that they pass; and far from being a disaster, this decision is rather a hallmark of the kind of growing pains inherent to a maturing industry. Where funders have positive and constructive relations with their clients, renegotiation of existing agreements should be perfectly possible.” Garbhan Shanks, commercial litigation partner at Fladgate, also suggested that the judgement would be a temporary obstacle that the industry would overcome: “The Supreme Court’s ruling that the litigation funding agreements in place for collective proceedings in the Competition Appeal Tribunal are not enforceable because they fall foul of the Damages Based Agreement statutory conditions is clearly an unwanted outcome for claimant side lawyers and funders in this space. It will be quickly cured, however, with restructured compliant agreements, and the increase in collective and group action proceedings in the UK supported by ever increasing third party funding capacity will continue at pace.” Nick Rowles-Davis, CEO of Lexolent, stated that it would be unwise to downplay the impact of the judgement at such an early stage: “The impact of it, the disruption and the distraction it will cause to funders should not be underestimated, nor should the potential damage to law firms relying upon monthly drawdowns in funded cases – particularly in matters in the CAT. It's wishful thinking to suggest that all funded parties will play ball and allow edits. It is also wishful thinking that there will not be several years of satellite litigation to clarify the old LFA position and a possible cohort of funded parties seeking restitution. This is a statement of the law as it has always been, not new law.” Closing Thoughts With limited consensus as to what the true scale of the impact from the Supreme Court’s decision will be, LFJ will continue to monitor developments in the industry over the coming weeks and months. It will be of particular interest if any public disputes between funders and clients where LFAs must be rewritten or completely replaced. Beyond the individual changes to funding agreements, eyes will now turn to Westminster to see whether there are any efforts by the Government to address the issue with specific legislation, or if there will be renewed calls for holistic legislation that deals with the UK litigation finance industry. LFJ will continue to report on reactions to the decision, and welcomes input from industry leaders and analysts.