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Announcements Commercial

William Panlilio joins Litigation Capital Management (LCM) in Singapore

Litigation Capital Management Limited, a global provider of disputes funding, publicly listed on the London Stock Exchange’s AIM market, is pleased to announce the hire of William Panlilio as an Investment Manager based in Singapore. With extensive experience in international arbitration and cross-border disputes, William joins LCM after more than five years with King & Spalding where he was part of that firm’s Trial and Global Disputes practice, operating in the energy, infrastructure, construction, technology and mining sectors, and conducting arbitrations involving States and State-owned or affiliated entities. Prior to that, William was an Assistant Legal Counsel at the Permanent Court of Arbitration in The Hague, The Netherlands for close to two years. While at the court, he assisted arbitral tribunals in treaty and commercial arbitrations involving various combinations of States, State entities, international organisations and private parties. William is a US qualified lawyer who started his career Orrick, Herrington & Sutcliffe in New York, specialising in complex commercial litigation, financial institutions litigation, and cases involving U.S. foreign relations law, including the Alien Tort Statute. Commenting on William’s hire, LCM’s Head of Investments (APAC), Susanna Taylor said: “We are very pleased to welcome William to the LCM team. He is a highly experienced practitioner with an impressive track record of commercial and treaty arbitrations as well as broader corporate and commercial expertise. We are experiencing a significant uptick in funding applications in the APAC region, particularly those originated from Singapore, and William is well placed to assist LCM to take advantage of the recent changes in Singapore to allow litigation funding for domestic arbitration and International Commercial Court claims. William is a valuable addition to our global team of high-performing investment managers”. Litigation Capital Management (LCM) is a leading international provider of dispute financing solutions. This includes single-cases and corporate and law firm portfolios across international arbitration, commercial claims, class actions and claims arising out of insolvency, including assignments. LCM has an unparalleled track record, driven by effective project selection and robust risk management. Headquartered in Sydney, with offices in London, Singapore, Brisbane and Melbourne, LCM listed on AIM in December 2018, trading under the ticker LIT.
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Announcements Commercial

Apex Litigation Finance launches second investor fund

Less than two years since launching the company and its first investor fund, Apex Litigation Finance has begun marketing its second fund. The firm is inviting commitments from investors keen to add an asset class alternative investment to their portfolio. The UK based litigation funder is seeking to raise £50m to continue its focus on investing in small to mid-size claims. The firm specializes in supporting access to justice for claimants who either cannot afford to pursue their claim or are wary of the financial risk involved should they lose their case. Speaking about the launch of the Fund, CEO Maurice Power says: “We initially launched a relatively small fund to enable Apex to quickly demonstrate the opportunity present in investing in small and mid-size claims. Since launch we have successfully invested the fund’s capital in a high volume of cases, with claim sizes ranging from £30k to £40m+. “With our high volume/low value focus, innovative use of predictive analytics technology and supportive funding solutions, we have established Apex as a litigation funder of choice. With funding applications growing at an ever-increasing rate and the pipeline of meritorious cases close to exceeding the first fund’s limit, now is the perfect time to launch our second fund.” Apex say that litigation finance investments are an attractive alternative asset class as they are decorrelated from equity or fixed income investments. Investors wishing to explore the opportunity available are encouraged to contact Apex on enquiries@apexlitigationfinance.com. About Apex Litigation Funding: Apex Litigation Finance Limited is a company which brings together experienced individuals from the litigation funding, legal and finance sectors to provide third party litigation funding to litigants (corporates, liquidators, and individuals) who are unable to pursue a claim due to the prohibitive cost of litigation. Although the litigant’s case may have merits, uncertainty over the total costs and the potential risk of being ordered to pay the defendant’s costs, should they lose the case, prohibits access to justice for many claimants. Following an assessment of the merits of the litigant’s case, through use of Artificial Intelligence (software utilising predictive analytics to ascertain the likely outcome, duration, and settlement value of the case), legal and commercial expertise, Apex will commit funds to pay legal and other costs associated with the case in return for an agreed share of any award upon a successful conclusion. If there is no recovery, or if the case is lost, there is no debt for the litigant to repay.
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Commercial

Key Takeaways from LFJ’s Podcast with Ben Phi

On the latest episode of the LFJ Podcast, Ben Phi, Partner at Australian class action law firm Phi Finney McDonald, discussed his recent response to the Senate Economics Committee in regard to the proposed regulation of class actions. Ben outlined his response to the ‘rising D&O insurance’ and ‘social inflation’ arguments being made by Big Insurance, and the negative consequences that could emerge if large class actions are over-regulated. Ben's summary of his testimony regarding Australia’s continuous disclosure laws: BP: Our position is that the proposed changes are both misconceived and dangerous. Essentially, what the government is trying to do is to make it more difficult to bring shareholder class actions in Australia. Their thinking requires plaintiffs to establish fraud, recklessness, or negligence to establish a continuous disclosure breach. And they also require the regulator to establish those elements to pursue civil penalty claims. This is something the regulator is definitely opposed to. Our position is that this is going to weaken the regulatory framework that governs corporate disclosure in Australia. LFJ: I want to ask about the notion of Social Inflation. This is something the insurance industry has been pushing lately. It’s the idea of a perfect storm of litigation funding, what they call aggressive tactics being used by plaintiff’s attorneys, and rising anti-corporate sentiment that is influencing the size of jury awards. What’s your response to this argument? BP: That is an argument that may carry some weight in other jurisdictions, but it simply doesn’t apply in Australia. At the threshold level, we don’t have jury trials in Australia for class actions, all of the class actions that have been before the courts have been in front of our judiciary, which is excellent and independent. Shareholder class actions rarely go to trial. The vast majority of cases settle here and they do so for sizable amounts, and provide really strong returns to group members--even after accounting for legal costs, solicitors, and litigation funding costs. One of the key differences in our jurisdiction is that we’ve got an adverse costs regime that takes a lot of the excesses out of the system and also most of the entrepreneurship. Basically, anybody that’s involved in financing or conducting shareholder class action litigation—there’s no interest in taking on speculative claims. The thresholds that get jumped through before a claim is actually commenced are very very high.  LFJ: A potential consequence of this regulation is increased corporate malfeasance, because at the heart of these class actions is that issue—corporate malfeasance. Essentially if you’re looking to regulate class actions, you want to make it harder to hold corporations accountable. So to me...I hear that and think that’s an argument the public can get behind. From your perspective, is there a PR push being made by plaintiff law firms, litigation funders, and others, or is the issue just too esoteric for the general public to care about? BP: There have been PR campaigns at least in relation to the previous round of class action reforms. And there’s absolutely no doubt that the Australian public is against corporate misconduct and malfeasance with a high degree of sensitivity to that. In particular, Australians have been conditioned by a series of commissions like these judicial inquiries into the financial services industries—and each of those inquiries has exposed absolutely disgraceful conduct on behalf of corporations. And that’s been met with widespread outrage, and followed by class actions supported by litigation funders. I actually think there is scope for this to become an issue in the next federal election—and that election is due to take place sometime in the next twelve months. LFJ: Where do you think the government is ultimately going to come down on this? Do you think there will be enough of a pushback to stem onerous regulation, or—how do you think this will play out? BP: Those who follow the Australian market will know how dangerous it is to predict the future. One thing I can say for certain, is that I really don’t see the government’s position changing—the government has really put a stake in the ground and we don’t expect them to shift from that position, particularly in an election year, and particularly given the promises that have clearly been made to the insurance industry and areas of big business. There doesn’t appear to be any political advantage in them backing down. Click here to listen to the entire episode.
Commercial

Is ‘Conscious Uncoupling’ Becoming a Legal Trend?

The concept of ‘conscious uncoupling’ was widely mocked when actor Gwyneth Paltrow mainstreamed it during her divorce from musician Chris Martin. In short, conscious uncoupling is a five-step process that helps couples separate and divorce in a less acrimonious, more amicable way. Spears details that the thrust of the concept is solid—ending a marriage should be as painless and amicable as possible. This has become a dominating principle in family law of late—resulting in concepts like hybrid mediation, collaborative divorce, and various other styles of alternative dispute resolution. This trend led to the unveiling of a new model of divorce, Uncouple, which aims to lessen polarization. This advancement comes alongside an impending change welcoming no-fault divorce to England and Wales. This means that during a divorce, it is no longer necessary to determine who is at fault, which is also likely to lower acrimony. Not all divorces are amicable, however. When separations, custody of children or pets, or asset division becomes contentious, one party often finds themselves with significantly fewer resources than their spouse. The first step to moving forward may be having the financial war chest needed to litigate effectively. This is why George Williamson founded The Level Group—which offers litigation funding to divorcing spouses. This may include covering legal fees or even living expenses so that clients can’t be financially manipulated by their spouse—and thus can maintain their bargaining capability. A recent divorce, the most expensive in London’s history, involved Farkhad Akhmedov and his ex-wife, Tatiana Akhmedova. The case dragged on for years, backed by funders Burford Capital, who will receive a portion of the eventual settlement. Burford is also funding the forced compliance of various court orders to relinquish funds and assets. While it’s definitely preferable for divorces to be amicable, it’s nice to know that when they aren’t—litigation funders are standing by to help.
Commercial

Lloyds & QBE Face Class Actions Over COVID Business Interruption Claims

Book building has begun in two class actions against Lloyds and QBE—accusing them of failing to pay on valid business interruption policies during the COVID pandemic. Both claims are being underwritten by Omni Bridgeway, a leading litigation funder. The Sydney Morning Herald details that as many as 25,000 businesses in Australia may be eligible to sign on to the class action, which was started by Gordon Legal—the firm which famously won $1 billion for those harmed by a government debt recovery scheme. The actions are seeking compensation for rejected payments, missed opportunities, and other losses relating to the non-payment of valid claims. Business interruption policies often cover natural disasters. Many insurers remain adamant that policies had never been intended to cover global disasters like a pandemic. They claim it was unclear, even mistaken, wording in policies that suggested pandemics would be covered. One insurer, Insurance Australia Group, stated that it could owe as much as AU $1 billion if forced to make good on the policies. QBE has declined to comment on the impending actions.
Commercial

What Will We Learn from the New Jersey Disclosure Rule?

On June 21st, Local Civil Rule 7.1.1 went into law. Signed by Chief Judge Freda Wolfson, it requires disclosure of third-party funding in New Jersey. Currently pending cases will be given 45 days to submit disclosure that includes names and addresses of third-party funders. If they are legal entities, their place of formation is required as well. Above the Law explains that the required disclosure includes a description (but not the actual funding agreement) of the funder’s interest, and whether or not funder approval is needed for decisions related to litigation or settlement. After this, additional discovery may be required on a case-by-case basis. Some say there is a need for this new rule because of the potential ethical concerns in litigation funding. Conflicts of interest, questionable fee-sharing, and a fair distribution of knowledge surrounding the case and participants are all cited as good reasons for the new rule. But what will it really accomplish? Marla Decker, managing director of Litigation Finance firm Lake Whillans, acknowledges the importance of avoiding conflicts and not allowing funders to control litigation. But she maintains that funders routinely or inappropriately controlling litigation is just not happening. Claimants, as one might imagine, are not keen to give up control over litigation strategy or the terms of a potential settlement. It’s likely that the outcome of this new law will be that courts will see that litigation funding is an above-board practice with a strong ethical foundation. Decker expresses concern, however, that the new rule could result in a spike in unnecessary and even onerous discovery. She explains that it makes more sense for courts to address discovery on a case-by-case basis. Disclosure is a regular part of cases, and devising a one-size-fits-all regulation is counterproductive and potentially damaging.  
Commercial

Legal Equity Partners Acquires JustKapital Litigation from Law Finance

LawFinance recently announced the completion of the sale of its litigation funding arm—JustKapital Litigation—to Legal Equity Partners Pty Ltd. Lawyers Weekly reports that the sale, which was announced in January and approved by shareholders one month ago, is a step forward in de-risking the company. The company stated that it experienced a lower probability of recovery than expected. As chief executive Daniel Kleijn explains, the sale will ensure that LawFinance can continue focusing on aspects of the business that generate the strongest returns for shareholders. LawFinance plans to continue pursuing active cases.
Commercial

Hedge Funds and Burford Capital

A decade ago, all eyes were on hedge funds as they were believed to be the most shrewd investors. After a decade of sub-par returns, that reputation has soured somewhat. Still, hedge funds currently maintain over $3.5 trillion in assets under management.   Yahoo! Finance reports that Burford Capital found its way into the portfolios of six different hedge funds as of the end of Q1 2021. But at the end of December 2020, that number was seven. In fact, recent calculations suggest that Burford isn’t even in the top 30 most popular stocks among hedge funds. How serious is that? And what does it say about Burford? Several hedge funds remain confident that Burford's stock is a good buy. These include Orbis Investment Management, as well as Arrowstreet Capital, Springhouse Capital Management, Glendon Capital Management, and Citadel Investment Group. Still, there has clearly been a dulling of Burford’s shine among prominent hedge funds. Total hedge fund stock holdings in Burford decreased 14% from the fourth quarter of last year. Hedge fund interest in Burford is still well below average. With that in mind, Burford receives a hedge fund sentiment score of 32.3, which ranks similarly valued stocks based on their relative hedge fund positions, present and past. It’s worth noting that since the end of the first quarter, Burford stock returned 19.4%. Several smaller hedge funds bet on Burford with great results—since it outperformed the market by a significant margin.
Commercial

Burford Responds to Proposed Fee Cap for Litigation Funders

One would think that if new laws are being created to regulate an industry, prominent members of that industry would be consulted. That doesn’t seem to be the case regarding Australia’s proposed law that would place an arbitrarily determined cap on fees for law firms and litigation funders in class action cases. Burford Capital took the opportunity to respond to the proposal, pointing out that the proposal itself is not based on existing data or case law. Capping fees, Burford explains, will lead to cases being settled for less than their true value. Burford also points out that the costs and subsequent risks of class action cases in Australia often necessitate the use of litigation funding. The practice is a vital part of securing access to justice for those who can afford it least.
Commercial

Inheritance Funding Simplifies the Probate Process

When a loved one dies, thinking about money may be the last thing on anyone’s mind. But it may also be an introduction to the complex and time-consuming world of probate. MONDAQ Canada details that even a simple inheritance claim could take months or longer to be resolved, not including time to transfer property and assets. The process can also be expensive, necessitating legal fees, new taxes, accounting services, and maintenance of properties. BridgePoint, a third-party legal funder, now offers an inheritance loan. This is short-term funding that’s available quickly to help manage an estate until a payout can happen. Trustees and beneficiaries may be eligible for this type of funding. Such a loan can relieve a lot of pressure and worry from an already emotionally draining situation. Cindy Williams, VP of BridgePoint Financial, explains that even when entitlement for inheritance is clear, the timeline may not be. Inheritance funding can give everyone room to breathe.
Commercial

Nanoco Litigation Against Samsung Continues

Nanoco Group recently released an update in their legal action against tech giant Samsung. The suit alleges the willful infringement of Nanoco IP. The patent infringement suit was filed against multiple Samsung entities in February of last year. Nanoco has accepted financial assistance from a third-party litigation funder in order to pursue the case. Directors Talk Interviews explains that an inter partes review, or IPR, is a standard facet of intellectual property infringement cases. The Patent Trial and Appeal Board for the Eastern District of Texas Court instituted IPRs on all five patents relevant to the case. There is a predetermined timeframe for these reviews, which means a decision should be reached and released before May of next year. Nanoco has petitioned the court to wait until after the IPR decisions have been made before moving forward with a trial. Brian Tenner, CEO of Nanoco Group, has affirmed that the company must win the trial and the IPRs to achieve success here. He remains confident in the merits of the case. Tenner also detailed that support from shareholders, along with the involvement of a third-party litigation funder, is a key factor in Nanoco’s ability to pursue the case while maintaining normal business operations. IP litigation is a common investment for legal funders due to the potential for high payouts.
Announcements Commercial

Liti Capital Announces Identifying Information of Their First Crypto Con Artist

Geneva, Switzerland – June 29, 2021 – Liti Capital SA, a Swiss Litigation Finance company, has just found and identified the perpetrator of a cryptocurrency scam. This comes days after their commitment to push back against fraud in the crypto community and help create a safe atmosphere for innovation and investment moving forward. By tokenizing their equity, Liti Capital introduces litigation finance to the blockchain, providing retail investors with a new asset class and giving them the opportunity to fight back against crypto criminals.
Joel “Coach K” Kovshoff, a popular cryptocurrency influencer, was recently the victim of an elaborate con, resulting in the loss of $250,000 for himself and his investors. This is a common story in the crypto community, and the victims are rare to voice their misfortunes, particularly if they live in the public eye and their income is contingent on their reputations. As one of the few public figures to announce this potentially embarrassing story, he was able to catch the attention of Liti Capital through their mutual contact, Kurt Ivy at Splyt. The con artist used a unique tactic: he created a fake identity, complete with documentation, did extensive research on “Coach K,” and found him in public to slowly befriend him over time. This is how he was able to gain trust and eventually walk away with the money. He directed Joel to JD Capital, with whom Joel has worked with before, about a fund of CertiK he could purchase. After some more convincing, Joel paid the cost of the CertiK and waited for a response that did not come. However, the con artist may not have been as sophisticated as it seems. “These guys are acting with complete impunity,” David Kay, international litigator and CIO of Liti Capital said, “They’re so sure they won’t get caught that they don’t even cover their tracks. They don’t think anyone’s coming. Well, we’re coming.” Joel Kovshoff had given the con artist a chance to return the money, plus interest, before taking legal action. Liti Capital is on standby with a powerful team that has seen worldwide success. “The same tools we deploy to investigate international cases are the ones we will use to identify and pursue crypto scammers,” Jonas Rey, Co-Founder and Managing Director said, “My team of investigators and intelligence officers have found the con artist in question, his personal information, where the money is, and have engaged with counsel and security at his location. We will give him the weekend to reach out to us.” Liti Capital launched the LITI token yesterday, Thursday, June 24, 2021, at 11:59 PM EDT, and the wLITI on Tuesday, June 29, 2021 at 6:00 PM EDT. The LITI token will be available for purchase on their website after passing KYC requirements. The wLITI will be available to trade for on Uniswap. About Liti Capital Liti Capital is a Swiss Limited Liability Co specializing in Litigation Finance and FinTech based out of Switzerland. Liti Capital buys litigation assets to fund lawsuits and provide a complete strategic solution along with connections with the best law firm to help its client win the case. Tokenized shares of the company lower the barrier of entry for retail investors, give token holders a vote in the decision-making process, and distribute dividends to token holders upon the success of the plaintiff. Co-Founder Jonas Rey heads one of the most successful intelligence agencies in Switzerland, Athena Intelligence. His two co-founders, Andy Christen and Jaime Delgado bring operational, innovation and technical skills together to round out the leadership team. David Kay, CIO, ran a billion-dollar NYC private equity litigation finance firm before joining Liti Capital.
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Commercial

The Tom Girardi Saga Continues

Remember the lawyer from Erin Brockovich? He married a former cocktail waitress. They bought multiple luxury houses and two private jets. If that sounds like the sensationalized stuff of reality TV, that’s because it is! The Girardis eventually wound up on The Real Housewives of Beverly Hills. So what happened? Institutional Investor details that Girardi applied for, and received, a loan of over $5 million from an Arizona-based litigation funder—Stillwell Madison. Ostensibly, the money was to be used for cases against Shell Oil, Eli Lily, GlaxoSmithKline, and others. If the cases made money, a portion was to be paid to the funders under the terms of the funding agreement. Instead, Girardi’s firm defaulted on their payments to the funders. Eventually, Girardi’s firm made a payment deal with Stillwell Madison, though Girardi neglected to mention that he had defaulted on another funding agreement with a different funder—Law Finance Group. Later, Girardi allegedly stiffed at least ten families in a case against Boeing. The families had lost loved ones in the Lion Air Flight 610 crash. As lawsuits for non-payment flooded in, it came to light that Girardi had taken out multiple loans—often reusing the same collateral. Erika Girardi filed for divorce against her husband in late 2020, just before Jay Edelson filed to sue both Girardis, the firm Girardi & Keese, and two litigation finance firms among others. Edelson alleges that Girardi has embezzled settlement proceeds that rightly belonged to clients so that he could continue to fund an absurdly lavish lifestyle. Stilwell Madison and California Attorney Lending, two litigation funders named in the suit, are accused of structuring an intercredit agreement among themselves. Erika Girardi remains on the reality series and affirms that she had no idea that her husband embezzled funds from anyone.
Commercial

How Litigation Funders Price Based on Risk

Critics of Litigation Finance appear to be celebrating Australia’s proposed cap of 30% on potential returns for litigation funders. It’s hard to argue that such a move would not have enormous, industry-wide consequences. Some say it’s ‘unfair’ for funders to reap high profits while claimants, who were actually damaged by the factors in their cases, receive a paltry sum. But who is really taking on the most risk? Dispute Resolution Blog details what it describes as the ‘real’ value of risk in litigation finance. It also reveals that when educating the public about the benefits of litigation funding, funders failed to impress upon consumers the reasons that lead to litigation funds being priced as they are. Commonly, prices are structured as either a share of the award (usually 30-40%) or a multiple of the capital provided (usually about 3 times). While this might seem high to the uninitiated, this is the same basic pricing structure that was used during the development of litigation funding in the 90s. There are two main approaches to pricing litigation funds: Capital Structure Pricing and Probabilities Pricing. Capital structure pricing is similar to basic accounting, where assets and liabilities are matched. Liabilities are tiered from cheapest to most expensive—starting with senior debt and ending with equity. This model is not unlike getting a good interest rate due to a lifetime of good credit. Someone without any credit could not get that rate because they’re considered inherently riskier. Probabilities pricing is a more academic pricing philosophy basing the cost of the funds on the probability of success. That means occasional losses are factored into the costs of the funding deployment. Time is also a factor since it can be years between deploying funds and receiving an award. Ultimately, the funding industry would do well to be more transparent not just about funding agreements, but about how current pricing is calculated.
Commercial

Litigation Funding as ESG

We already know that litigation is expensive. We also know that even if a claimant can technically afford a lawyer, they can easily be outspent by corporations and other big spenders who may be practiced in avoiding responsibility. That’s why litigation funding was developed—to level the playing field between the Davids and Goliaths of the legal world. PGMBM details that litigation funding is a net gain for society in several important ways. First, it makes it easier for people of average means to pursue litigation. Second, it’s instrumental in holding corporations and governments accountable when they fail to maintain standards or protect the citizenry. Maintaining accountability for corporations, utilities, and others encourages fairness and can be a precursor to impactful social change. Third, litigation funding is increasingly the main source of funding for collective action cases. This is particularly important for rural and low-income citizens who are essentially at the mercy of governments, utility companies, and others. When these entities pollute or cause damage to farmlands or water supplies, citizens often have no recourse other than expensive legal action. With that in mind, it seems clear that litigation funding should be counted among ESG investments—those that focus on environmental, social, and governance issues. This may be coming in the EU, as a Code of Conduct for funders is en route, and will likely pave the way for funders to label themselves as ESG.  
Commercial

Singapore Widens Door for Litigation Funding Use Cases

As of yesterday, the Singapore Ministry of Law is extending the third-party legal funding framework in order to cover more types. These include domestic arbitration proceedings, some cases heard at the Singapore International Commercial Court—and related mediation proceedings. Ministry of Law details that Singapore first welcomed third-party funding in 2017, though only for international arbitration and related mediation. The funding industry has grown since then, and the response to the practice has been overwhelmingly positive. In addition to extending case categories that may now utilize TPF, the Ministry has amended several professional conduct rules. These include:
  • Lawyers involved in cases using TPF must comport with Legal Profession Rules 2015 regarding conflicts of interest.
  • Registered Foreign Attorneys may be subject to additional scrutiny when TPF agreements are used, as could foreign TPFs.
  • Amendments regarding orders for adverse costs, as well as security for costs, in cases utilizing third-party funding.
  • Singapore Statutes Online, part of Singapore’s government website, lists these amendments in full.
Commercial

New Jersey Disclosure Regulation Rankles Litigation Funders

Debate continues as to whether the New Jersey district court’s new disclosure rules impacting litigation funding are a celebration of transparency or a futile exercise in unnecessary regulation. What happened? Reuters explains that US District Court Judge Freda Wolfson signed an order amending local rules—and necessitating disclosure of all non-parties that offer non-recourse legal funding to participants in the case. Parties must also affirm that litigation funders will not make decisions regarding litigation, strategy, or settlements in the case, leaving those up to the client. Members of the ILFA expressed disappointment, not only with the content of the new rule but with the fact that the District of New Jersey did not consult with ILFA members. Executive Director Shannon Campagna stated that the passage of this rule is unnecessary and will almost certainly create more problems than it solves. Of course, issues regarding legal disclosure inspire passionate responses from every side. Even though the New Jersey rule doesn’t require the release of the entire funding contract, it does open the door to increased disclosure if there’s reason to believe funders are controlling a case. One ethics expert, Lucian Pera of Adams and Reese, said he felt that disclosure requirements haven’t had much impact on any proceedings he’s aware of. If anything, the new rule is likely to impact wording in funding agreements—and that’s all. While it is important for courts to know if funders have inappropriate control over case decisions, it’s unlikely that such information would be spelled out in a funding agreement. Harold Kim from the Institute of Legal Reform is clear in saying that disclosure rules haven’t made much difference in California and Wisconsin. Still, the passage of the New Jersey rule indicates that courts see the rise of litigation funding and its growing acceptance into mainstream legal practice. Kim believes that the new rule can best be described as ‘opening the door.’
Commercial

Nicky Foulston’s LionFish Off to a Running Start

Nicky Foulston inherited the racing circuit Brands Hatch when she was a mere 19 years old. In just over a decade, she had taken a loan of GBP 6 million and used it to turn Brands Hatch into a powerhouse circuit. She ultimately sold it for a staggering $195 million in 1999. This Is Money details that Nicky Foulston is now the chief executive of RBG (formerly Rosenblatt Ltd)—a much-respected legal firm that was founded by Ian Rosenblatt.   LionFish, a litigation finance firm, is managed by Tets Ishikawa, who spent most of his career as an investment banker. Under Ishikawa’s leadership, LionFish has outshone its industry competition by being more flexible about agreement structures and pricing while offering faster decision and deployment times. In the year since its founding, LionFish has received over 350 requests to fund cases with dozens still under consideration. They have accepted multiple cases that are already underway, with an expectation that high returns could translate into impressive shareholder dividends. Big things are expected for both RBG and LionFish under the direction of Nicky Foulston, who analysts describe as ‘shrewd’ and ‘ambitious.’ Post-pandemic growth is already on the rise. There’s no reason to think that both of Foulston’s current legal ventures won’t become stunning successes.
Announcements Commercial

New Research: CFOs Increasingly Aware Of Commercial Litigation Assets And Poised To Unlock More Value From Legal

Burford Capital, the leading global finance and asset management firm focused on law, today releases new independent research probing how CFOs and senior financial officers influence corporate legal departments, legal spend and their companies' success in recovering value through affirmative recoveries. Christopher Bogart, CEO of Burford Capital, commented: "CFOs bring a commercial mindset to other areas of the business—and the legal function should be no exception, particularly given the amount of working capital potentially at stake, measured not only in the many millions now spent on commercial claims but also the even greater opportunity costs of diverting corporate resources and the untapped opportunity to pursue valuable claims altogether." The research suggests that companies are on the cusp of a paradigm shift in how they approach legal assets, and that financial officers understand their value and have new opportunities to more fully leverage tools to unlock them.  Key findings from the research include: Affirmative recovery and cost management programs are extensive—and ready for growth
  • 73% of financial officers report extremely/very extensive affirmative recovery programs, and 84% report extremely/very extensive legal cost management programs
  • 46% report a need for improvement in these programs
Companies have extensive opportunities to enhance liquidity
  • 75% of companies with over $1 billion in annual revenues reported unenforced judgments worth $20-$100 million in 2020
  • Companies with inadequate affirmative recovery programs are 27% more likely to leave money on the table
Financial officers have new ways to apply the same financial approach to legal as other business areas
  • Just 24% say they apply quantitative financial modeling to make decisions about litigation as they do in other areas of the business
  • 39% say litigation variables don't lend themselves to quantitative analysis—revealing an untapped opportunity to utilize tools and partners to quantify legal risk
Bringing a commercial mindset to legal will reinforce more commercial behaviors—benefiting the business
  • 59% believe that pending litigations are assets because they represent future cash flow, even if they don't show up on the balance sheet, and 56% believe that the legal department should have commercial targets
  • However, a significantly large percentage of financial officers aren't yet bringing a commercial mindset to legal
  • Those who conduct quantitative analysis of litigation are significantly more likely to say that their companies need to place greater priority on their affirmative recovery programs—suggesting the kind of appetite for improved performance and financial innovation that leading companies value
The 2021 Legal Asset Report: A Survey of Finance Professionals can be downloaded on Burford's web site and includes snapshots of energy, food, healthcare and other industries. Its findings are based on the online survey responses from 378 senior financial officers of companies with annual revenues of $50 million or more in the United States, the UK and Australia, conducted in March and April 2021 by Bauman Research and Consulting. Over half of respondents hold CFO titles and all are in roles that include knowledge of their companies' litigation expenditures. About Burford Capital
About Burford Capital Burford Capital is the leading global finance and asset management firm focused on law. Its businesses include litigation finance and risk management, asset recovery and a wide range of legal finance and advisory activities. Burford is publicly traded on the New York Stock Exchange (NYSE: BUR) and the London Stock Exchange (LSE: BUR), and it works with companies and law firms around the world from its principal offices in New York, London, Chicago, Washington, Singapore and Sydney. For more information, please visit www.burfordcapital.com.
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Announcements Commercial

Legaltech leaders Disputed.io raise further funding

LegalTech company, Disputed.io, has increased investment to over £1.5m from its latest round of investment. The latest funding follows on the back of significant growth for the business after the launch of its first product, CaseFunnel, an automated claims solution 13 months ago. Eighty per cent of the investors followed-on, on the back of the soft-launch of the business’ latest product, FinLegal the first online marketplace for litigation funding.

The latest investors in the business include new investors Perry Blacher a FinTech specialist with 25 years’ experience building and operating online businesses and Alan Falach, the co-founder of Global Legal Group, a London-based global company specialising in the legal market.

Commenting on the investment Alan Falach says, “There are still huge opportunities for the legal sector to use technology and improve the economics of claims and access funding for litigation and ATE insurance. Disputed.io is at the forefront of this evolution and I’m excited to be involved in the venture.”

Founder and Chief Executive Officer of Disputed.io Steven Shinn, adds: “It is a real testament to the vision and products at Disputed.io that we have secured more investment. Perry brings a wealth of experience in start-ups which is invaluable as a high growth start-up and Alan’s knowledge and network in the legal sector further increases our brand equity in the legal sector.

“We have exciting plans for the business over the coming months as the demand for the platforms have grown. We also have ambitious international growth plans and the latest funding enables us to tackle our bold targets.”

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Commercial

Litigation Finance Transparency is On the Rise

The regulations surrounding the practice of third-party legal funding are ever-changing. As the practice becomes more popular as a product and an investment—interest in legislating litigation funding grows. Recently, Roy Strom discussed what we can expect in the coming months.   Bloomberg Law business columnist Roy Strom details his early experiences as a journalist covering Litigation Finance. After learning of the practice from a New York Times piece, Strom found a local startup that was starting its own funding practice. That group eventually became the powerhouse funder, Longford Capital. Strom advised funders to advertise their offerings and let the public know that funding is an option. He found that neither funders nor the legal firms that utilize them wanted to talk openly about their business practices. So while third-party funding is a net gain for society, the shroud of secrecy invites suspicion. Dai Wai Chin Feman, Parabellum Capital’s director of commercial litigation strategies, explains that in jurisdictions that have clear rules regarding funding, funders and legal teams are more comfortable discussing their relationship. A perfect example is the Willkie-Longford pact, in which Longford Capital struck a deal with Willkie, Farr & Gallagher to fund about $50 million in cases.  Laws surrounding disclosure vary from one jurisdiction to another, and no lawyer wants to invite court interference into a funding agreement unnecessarily. Rule changes like New Jersey’s new disclosure requirements might actually be helpful for third-party funding—in that it invites greater transparency into the process, though opinions vary widely. Litigation funding can be beneficial to clients, legal teams, and justice itself. It seems counterproductive to be anything less than transparent. 
Commercial

Manolete Partners’ Profit Takes a Hit

Manolete Partners, a leader in insolvency litigation funding, recently released a financial report. In it, they revealed that shares have lost half their value within the last year. Yahoo Finance reports that Manolete profits have decreased 26% due to higher staffing costs and a reevaluation of case value. As the government’s emergency insolvency stoppage ends in September, it’s likely that insolvency specialist Manolete will see a flood of new cases. At the same time, Manolete’s share of cash from resolved cases increased 113%, owing to a record 135 insolvency cases completed in 2020.
Commercial

Jurisdictional Gambling Debate Gains Attention from Litigation Funders

A recent case involving gambling license jurisdictions and online gaming has gained the interest of Advofin, the oldest litigation funder in Austria. Advofin is seeking EU 40 million to recoup funds lost by more than 2,000 Austrian citizens who gambled online. Gambling News details that many of the implicated operators are well-known names, like PokerStars, Leo Vegas, and 888. When an Austrian resident agrees to the terms of an online gambling site, they essentially enter a legal contract with the operator. This means that operators in Malta targeting Austrian players are breaking local law. Currently, there is one casino, Casinos Austria, that is licensed to operate in the country. Austrian law says only licensed operators in the country may offer casino gambling. Lawyers for Maltese operators said that the claim represents jurisdictional overreach. Article 56 of the Treaty for the Functioning of the EU establishes freedom to, among other things, deliver goods and services across the EU. That would imply that the Malta gambling operators were within the law. This case is one of about 50 currently being funded by Advofin.
Commercial

Abuse Survivor Accuses Dilworth School of Failing to Protect Students

One survivor of sexual abuse in childhood is spearheading a class action against Auckland’s Dilworth School—the wealthiest school in New Zealand. Neil Harding, along with an undisclosed claimant, asserts that the school knew that young boys were being sexually abused by teachers and staff as early as the 1970s. The case is being funded by LPF Group—the leading New Zealand litigation funder. TV NZ 1 News reports that instead of protecting students, the school opted to punish those who complained. Some abusers were moved to other postings, but Dilworth often filed suppression orders in the event that a former employee was convicted of abuse. In addition to the class action against the school, eleven men have been charged with sexual offenses against students. At least 100 former students have reported past sexual abuse by school staffers to police. So far, only one of the abusers has been sentenced. Assistant Principal Ian Wilson was given a sentence of fewer than four years. Harding is adamant that it’s not just the abusers who are at fault. He maintains that the Dilworth School failed these students by perpetuating a cycle of ongoing abuse. Others who have been impacted by Dilworth’s actions can confidentially file their interest. Because the case is being funded by LPF Group, there is no upfront cost to claimants.   Not surprisingly, Dilworth trustees declined to comment.
Commercial

New Disclosure Requirements for Funders in New Jersey Federal Court

Will a new disclosure requirement in New Jersey federal court ‘create more issues than it solves?’ Some members of the International Litigation Finance Association (ILFA) believe so. On Monday, Chief Judge Freda Wolfson ordered that third parties providing non-recourse legal funding must be disclosed to the court. Reuters explains that the new disclosure requirements will include the funder’s name and address, and especially whether the funder has approval or control over settlement or strategy decisions. Specific aspects of funding agreements may also be sought, but are not required to be disclosed by default. This requirement was the focus of a long skirmish between the ILFA and business-focused entities like the US Chamber of Commerce. Shannon Campagna, executive director of ILFA, expressed disappointment that industry members were not consulted about the impact of the new rule. She went on to say that the rule is contrary to most existing case law, and is likely to complicate—rather than simplify—the issues it’s trying to address. The new rule will lend some certainty to funded cases, as judges often differ on what types of disclosure and how much disclosure should be required.
Commercial

Manolete Appoints Lord Howard Leigh as New Chairman

Manolete, a leader in insolvency litigation funding, recently announced that Lord Howard Leigh of Hurley has been appointed as Chairman designate and senior independent director. Accountancy Today details that Leigh founded Cavendish Corporate Finance in 1988, where he is still a senior partner. Thirty years later, Cavendish merged with FinnCap to form FinnCap Group plc—now listed on the London AIM market. Leigh expresses delight at the new appointment and states that he’s looking forward to growing the business.
Commercial

Richard Dietz Continues Fight in Pakistan Asset Recovery Case

The ongoing legal action between the Pakistani government and asset recovery firm Broadsheet experienced a new development on June 9. Richard Dietz withdrew an application to have attorney Stuart Newberger give testimony about VR Global’s litigation funding agreement with Broadsheet—the asset recovery firm Dietz funded. Broadsheet was handed a multi-million dollar payment by the government of Pakistan in January, yet Dietz is still seeking compensation. Intelligence Online reports that Broadsheet was hired to recover assets concealed by Nawaz Sharif, the former prime minister, in a 2000 contract with the National Accountability Bureau. In 2017, VR Global provided $6 million in funding to Broadsheet. Once Broadsheet was given nearly $29 million, VR expected at least $21 million in repayment. Yet, representatives for Broadsheet petitioned a DC federal court to sanction VR for this filing—calling it ‘unnecessary.’ The case and its surrounding issues have necessitate the formation of a complicated web of recovery professionals, government agencies, and funders, as well as the Broadsheet Inquiry Commission. Ultimately, the NAB was found to have negotiated an ineffective contract without proper oversight. Dietz’s case against Broadsheet remains ongoing.
Commercial

Interview with Burford Capital’s Connor Murphy

Connor Murphy is currently a Director at Burford Capital. His focus is on new business origination with corporates and firms in the US. Before this, he was General Counsel for Capstone Advisory Group. Burford Capital reveals that many GC’s don’t even realize that legal finance is an option. But they should. since most companies could put funding to good use if they were aware of its capacity to turn legal departments into a profit center. As the impact of COVID grew around the world, it was predicted that the pandemic would bring about a massive spike in bankruptcies. So far, that hasn’t happened. Murphy explains that while some companies are still vulnerable, and inflation seems inevitable—the damage to the world economy is less severe than anticipated. Murphy expounds on litigation funding in Canada, particularly for bankruptcy cases. Canadians may now use litigation funding as a source of liquidity, enabling them to pay creditors while retaining funds to carry on normal business operations. Litigation funding can have a particularly transformative impact on GC’s, as Murphy is well-equipped to comment on. In fact, it can transform a defensive GC’s office into a proactive, commercially-minded hub that generates revenue for the company rather than draining it on legal actions. Education appears to be key in the future of litigation funding. As more GC’s understand the benefits legal funding can provide, the more widespread the impact will be.
Commercial

Megan Mayers Ranks UK Litigation Funders

Litigation funding has taken off in the last decade, largely due to its utility and benefits—but also spurred by the financial unrest caused by COVID. In the ten years since its inception, the Litigation Finance industry has grown, adapted, and flourished as an investment and a product. Legal 500 takes a long look at the UK litigation funding scene and has assembled a list ranking the leaders of the industry. This list does not include insolvency specialists such as Monolete Partners, Innsworth, or others with a more narrow offering. In overall rankings, the top tier funders are Burford Capital, Harbour Litigation Funding, and Therium. In the second tier, according to Mayers, are LCM, Omni Bridgeway, Vannin Capital, and Augusta. Third are Bench Walk Advisors, Balance Legal Capital, and Woodsford. The funding industry began as a way to increase access to justice for those of modest means. Leveling the playing field in ‘David v Goliath’ situations is a net gain for all consumers—especially in terms of holding corporates and even governments accountable. Third-party legal funding has expanded and adapted to meet the need of law firms, clients, investors, IP holders, and even legal services. Along with these developments are regulatory changes, often spurred by those who are wary about legal funding. This is one factor that led to the creation of the Association of Litigation Funders (ALF)—a professional group that advocates, educates, and self-regulates the legal funding industry. Most of the largest funders have joined. But as the playing field widens, newcomers to the industry seem less likely to join, stating that the rules made by ALF are not enforceable or legally binding. Still, it’s entirely possible that the next ten years will be just as transformative to the Litigation Finance industry as the last.
Commercial

Litigation Finance Sees Regulatory Changes in Germany

The Legal-Tech Act has recently been passed in Germany and will take effect in October of this year. Essentially, it allows attorneys more flexibility with regard to contingency agreements. This act is the opening move in a series of planned reforms to Germany’s legal service market. Pinsent Masons details that the intent of the Legal-Tech Act is to address discrepancies in how legal tech companies are regulated, as opposed to how laws are applied to lawyers. Debt collection out of court is typically handled by legal tech companies—and they are treated differently than lawyers even when seeking to accomplish the same goals. This means that debt collectors aren’t subject to the same set of rules as attorneys. The Legal-Tech Act addresses this in several important ways. Contingency fees may now be used in out-of-court collections cases. Lawyers can make agreements to take on the costs for collections. This applies only to our court collections and judicial dunning (a German-specific rule that makes enforcement easier). This differs from the proposed act, which would have allowed litigation funding for all monetary claims under EU 2,000. These changes necessitate new disclosure, so the Legal-Tech Act covers that too. Debt collection companies are required to tell clients about other options, and to explain why collection agencies seek out contingency agreements. Debt collection agencies, in general, will face more scrutiny in Germany under the new law. Registrations will be required, and German authorities will confirm that their stated business model adheres to the new guidelines. The German government is confident that consumer protections will be strengthened by the Legal-Tech Act. Transparency will increase, particularly in collective actions. One litigation expert expressed concern, however, that the German parliament’s decision is reactive and incomplete. As it is only the first in a list of upcoming changes, any shortcomings in the Legal-Tech Act will soon be addressed.