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Commercial

Key Takeaways from LFJs Podcast with Elena Rey of Brown Rudnick

Earlier this week, LFJ released its latest podcast episode, featuring Elena Rey of Brown Rudnick. Elena discussed her effort to introduce model documentation to the litigation funding industry, including the founding of the Litigation Funding Working Group, which brings together litigation funders, insurers, legal experts and others to help formulate model documentation for use in the UK, EU and elsewhere. Below are some key takeaways from the podcast: JF: Can you highlight the specific benefits of model documentation? How do you see this impacting the industry going forward? ER: I think the big benefit of model documentation is that it will speed up the development of the secondary market. On a practical level, the Working Group has become a platform where issues facing the market can be discussed such as the relevance of consumer credit legislation, DBA arrangements, and funder fees. JF: With regard to the Working Group, how will this documentation be originated? Who’s on the working group, what will the process be for taking suggestions—and also, how do you expect this documentation to come into widespread use in the industry? ER: The group consists of professional funders, both the core members of our fund and others, like Harbor, Therium, LCM, etc., as well as private equity funds, distressed debt funds, and other litigation funders. Also insurance providers and a number of leading law firms and barristers. The drafting process is based on our experience. The draft is revised as everyone provides feedback and that is worked through. The goal is to provide a balanced draft that reflects feedback from the whole market. That is really important to us.  JF: How much room for flexibility is there in model documentation? It seems like funding arrangements can be so bespoke. ER: Any funding opportunity is bespoke. The idea is to provide a solid and helpful boilerplate provision, which has been tested by discussion in the Working Group, reviewed by lawyers and counsel, and players in the market from different angles. Parties can use it in their negotiation process so they can focus on the finer points. It streamlines the negotiation process and allows the deal to be closed. JF: Which aspect of funding do you see this having a bigger impact on—financial terms or the legal side, in terms of communication between parties? ER: I think it’s both. We’re obviously targeting to improve the legal terms. But hopefully this will benefit the negotiation process. The boilerplate language can be used to address commercial issues. When the parties know they’re protected, the negotiation goes more smoothly. We think it’s important to streamline the negotiation process because deadlines are often tight. JF: How far along in the process are you? What has the response been from the Working Group? What’s the ETA for when this documentation will be complete? ER: The response has been amazing! We launched in October with 15 core members. We now have about 80 Emails on my recipient list. The first set of provisions will focus on insurance. The first draft of the Working Group should be finalized in the next few weeks and could be available to the market by the end of the year. For the full podcast interview, visit this link.
Commercial

Mastercard Class Action Claims 46 Million Britons Overcharged

A class action against credit giant, Mastercard, could net UK claimants a cool GBP 300 apiece. The two-day Competition Appeal Tribunal hearing is scheduled for March 25th. As the case awaits certification, Mastercard maintains that it does not agree with the claim and that it intends to fight back. Reuters reports that the claim against Mastercard could reach GBP 19 billion. Whether or not the case is certified impacts more than just the UK consumers who stand to gain. The decision regarding certification will impact several other proposed class actions that are awaiting the results. The 2016 action alleges that Mastercard overcharged for interchange fees—which are paid by sellers to credit card companies in order to accept credit cards—and that stores raised prices to cover those fees, thus overcharging consumers. The case is expected to demonstrate that these fees were illegal. Innsworth Capital is funding the class action to the tune of GBP 60 million. This includes a payment of over 15 million pounds to cover Mastercard’s legal costs if the case is unsuccessful.
Commercial

The Value of Financial Transparency for Funders

Security for costs is still a contentious issue in the Litigation Finance community. An English Court of Appeal ruling was clear in its message that third-party litigation funders should be ready to provide evidence of their ability to cover an adverse costs order. Omni Bridgeway details that in Rowe & Ors v. Ingenious Media Holdings, defendants asked for security for costs from the litigation funder. The claimants, in turn, asked for a cross-undertaking to cover the cost of providing that security. Lord Justice Popplewell determined that while any funder should be properly capitalized to meet an adverse costs order, a properly run funder should almost never be required to put up security for costs. Popplewell’s observations should be welcomed by most funders. He explains that sophisticated claimants should already know to avoid funders who could, potentially, be required to put up security for costs. Generally, this only happens if the funder is undercapitalized, lacks transparency in financial matters, or fails to prove an ability to cover adverse costs. It could be argued that financial transparency is more important than ever for funders, as competition for cases grows. Multiple new entities are entering the legal funding landscape, owing to the potential for large awards and lack of correlation with the larger market. Publicly available financial statements can go a long way toward establishing funders as competent, honest, and well-collateralized, thus negating the need for a securities order. While regulation impacting funders varies depending on the jurisdiction, groups like the ALF and ILFA have worked diligently to develop ethical guidelines for the industry. While these are not legally binding, they do formalize what third-party funders and their clients deem to be the most important principles of their work. This includes being able to demonstrate an ability to meet all commitments involved in funding cases.
Commercial

Burford Numbers Show Best Year Ever for Recoveries

A report released by Burford Capital this week reveals that the funder has had its best year ever for recoveries. At the same time, profits shrank from the previous year. Burford suggests that the pandemic didn’t have the detrimental impact on business that was originally suspected. Bloomberg Law details that Burford’s largest case, revolving around an oil company in Argentina, has stalled. New business, the funders say, comes from striking deals directly with companies. This differs from the thinking during the earliest days of Litigation Finance when partnerships with Big Law were considered the path to growth for funders. David Perla, Burford’s co-COO, explains that 2020 numbers are strong—especially when factoring in the Petersen/Argentina case bringing in nothing. Perla affirms that the numbers are evidence that Burford knows how to choose winning cases. The Petersen investment has, in the past, returned nearly $250 million for Burford, though its claims are listed at $773 million. Similar cases yielded $425 million last year for the world's largest funder. Perla is also unconcerned by the reintroduction of a disclosure law. The bill, which failed to gain support previously, would mandate disclosure of third-party funders in any multi-jurisdictional litigation, or any federal class action.
Commercial

South African Third Party Funding is Still Largely Unregulated. What’s Next?

Compared to the rest of the continent, South African laws regarding third party litigation funding are advanced. Compared to the rest of the developed world, however, the country is lagging behind. Legislation is minimal, and court decisions are decided on the basis of precedent rather than law. Could that be changing? Pinsent Masons details that a 2004 Supreme Court of Appeals case went a long way toward developing law on TPF in South Africa. The decision acknowledged that funding is sometimes necessary to gain access to justice. It also held that third party funders should never be allowed to abuse the legal process by funding frivolous, retaliatory, or abusive claims. Clear, unambiguous contracts are an essential component of what’s expected from South African funders. A 2020 case in the High Court laid the groundwork for what constitutes a fair and reasonable TPF arrangement. These included:
  • Funders may not interfere with lawyers or their duties to their clients.
  • Clients (not funders) must control litigation decisions.
  • The agreement is necessary to provide meaningful access to justice.
  • Funders may not be overcompensated for assumed risk.
  • TPFs should protect the interests of clients.
Courts also considered how and when funders should be allowed to terminate a funding agreement. It was determined that funders could lawfully end an agreement—but that the choice to do so shouldn’t be made without input from the client’s legal team. Clients need not disclose to courts that their case is being funded by third party funding. But, if there’s an accusation of unfair treatment, courts may require that the funding agreement be made available for scrutiny. Communications between clients and funders are still privileged. Finally, the court determined that a third party funder could be held liable for costs. This is particularly true if they become co-litigants.
Commercial

Podcast: Akiva Katz & Bow Street

Bow Street has a unique take on Litigation Finance. Instead of funding cases from the outset, Bow Street finds and buys litigation assets in cases where guilt has already been adjudicated. That means the main focus is on the damages. As reported in Livemarkets, Akiva Katz and Howard Shainker created a hedge fund poised to earn in any economic environment by combining a research-driven approach with an eye for impactful events. The goal is to earn returns between 25% and 40% annually. Below are some highlights from the podcast interview:  AK: It’s tough to find in today’s market opportunities that others have not found before you. Where are those inefficiencies? One is inactive engagement. It’s actually in getting your hands dirty—which isn’t that scalable. That’s why we only do three to five investments a year. Another is complexity. Investors swim to what is simple. Complexity scares folks. To the extent that people in my seat are willing to dig in—there’s real reward there. The litigation claims business basically met those two criteria. AK: The litigation market in the US is tepid, low level in terms of reward. To the best of our understanding, the European markets were dominated by lawyers. That means lots of guys running around making the ambulance chaser proposition. We take 20% of the upside and bear the cost of taking your case. That always seemed wrong to us as investors, since we’re in the business of pricing risk. Our view was, we could increase our exposure by coming in with a balance sheet. That would be appealing to clients at the other end who don’t want to be involved in a year’s long protracted legal process. DC: What makes a better claim versus a claim that’s less attractive? AK: The single most important differentiating factor that we exercise has everything to do with attention to detail and documentation. The single place we take risks is on documentation. We’re not going to lose a case, because there’s been a guilty plea. But there’s risk if we don’t submit our entire documentation package and the court finds a technicality on which to award the case to the defendant. That risk is amplified by the fact that we pay full price for claims. We are cash out of pocket the day the claim comes to court. DC: Can you talk about insurance underpinning the capital? I can’t understand how that works. AK: It’s important to remember that it works as a function of the asset value. The way it works is like any other insurance policy. We’re taking out a nine-year policy  to cover all our capital. No matter what judgment comes down, that insurance company covers the value of our claims and cost. So why don’t we do that always? We can’t, or we would. That option being available to us is a function of the value we created. All that insurance policy tells you is that we’ve created something that’s worth multiples of what we’ve paid for it.
Commercial

Therium Funds COVID-Related Claim Against Insurers

Therium, a global leader in Litigation Finance, is funding a legal action against insurers who failed to honor business interruption policies. The funding arrangement means that businesses may join the claim at no upfront cost. London Loves Business details that Provenio Litigation has filed the class action on behalf of policyholders seeking claims for COVID-related business interruption. While insurers asserted that business interruption policies didn’t apply to global occurrences, the UK Supreme Court disagreed. In January 2021, the court came down on the side of policyholders. Mark Goodwin of Provenio Litigation affirmed that the Supreme Court decision provides the necessary clarity to right the wrongs perpetrated by insurers.
Commercial

Woodford Investors Launch Legal Action to Recover Losses

Claims of direct losses and loss of opportunity are some of the accusations being levied regarding the collapse of the Woodford Equity Income Fund. The claim, led by RGL Management group, is against Link Fund Solutions as well as Hargreaves Lansdown Asset Management.

Daily Business Group details that there are several rival claims addressing losses linked to the failure of WEIF. If successful, RGL will get 25% of any award given. In other pending claims, Harcus Parker is taking 42% and Leigh Day is taking 30%.

Link Fund Solutions was the authorized corporate director of WEIF. According to RGL, this obligated Link to ensure that the fund complied with what investors had been told. Link was also responsible to ensure appropriate liquidity and diversity in the fund. RGL’s claims state that Link failed to manage and administer the fund appropriately. LBAs have been sent to Link and Hargreaves Lansdown—formally beginning the legal process.

Estimates suggest that at least 300,000 investors have been impacted by the collapse of WEIF. Anyone who invested in the fund can register their interest with RGL regardless of the investment amount. Because the case is using third-party litigation funding as well as ATE insurance, there is no fee required for claimants to participate unless and until the case is successful.

Commercial

Indonesian Farmers Win Montara Oil Spill Class Action

At last, at least 15,000 seaweed farmers in Indonesia will be compensated by the oil company responsible for one of Australia’s largest oil spills. West Timor farmers were devastated by the spill, which covered more than 240 kilometers of seaweed crops nearly 12 years ago. Harbour provided third-party funding for the action. The Sydney Morning Herald reports that the court ruled that the rig, PTTEP Australasia, failed to properly seal the well, creating a high risk of a blowout. Shortly after the spill, seaweed crops died. Justice David Yates stated that the courts could not ignore the obvious. Daniel Sanda, the lead plaintiff, has been a seaweed farmer for over 20 years. After traveling to Australia to testify, he explained that he had earned a comfortable living before the spill. After the spill, the seaweed turned white and then died—along with many fish. To date, his business has not fully recovered. PTTEP was ordered to pay Sanda for his losses for five years following the spill. If every farmer who joined the class action is eligible for remuneration, damages to the oil company could be in the millions. The case, backed by Harbour, is the first funded class action for cross-border pollution involving an Australian company with foreign claimants. Richard Ryan, principal lawyer, has stated that he is very proud of the win. Meanwhile, PTTEP maintains that the spill should not have caused enough concentrations to kill plants, and is considering its options for appeal.
Commercial

Founder of Homebuyers Fightback Starts CrowdJustice Fundraiser

A CrowdJustice appeal has been launched to cover legal fees, as homeowner John Gaskell seeks justice for a home beset by problems. While Gaskill points to issues involving heating and insulation, plumbing, and disability access compliance, the developer describes these issues as ‘cosmetic.’ Cambridge Independent explains that a report by HouseScan supports Gaskell’s claims that the home fell well short of existing regulations. Since September 2019, Gaskill has been at odds with the developer. What could have been addressed in weeks has now been a headache for the new homeowners for over 18 months. CrowdJustice is similar to other fundraising, sites except that, unlike IndieGoGo or GoFundMe, CrowdJustice focuses on funding legal expenses. Unlike third-party litigation funders, supporting an appeal on CrowdJustice does not net any reward for those who help fund claims. Gaskell is clear in saying that this case and his work with Homebuyers Fightback is not just about his specific situation. Indeed, there’s a public interest in addressing systemic failures of quality control in new home construction. Defending all home buyers from unscrupulous business practices and those who would evade liability is essential to ensure consumer confidence. Several MPs have backed Gaskell’s efforts to bring accountability to the industry and develop a home buyer’s charter.
Commercial

CEO of Taurus Capital Discusses Litigation Funding

Elad Smadja, CEO of litigation funder Taurus Capital, explains the basics of litigation funding. Taurus is actively pursuing investments in South Africa. Below are some key takeaways from the discussion, available in full on CNBC Africa: Q: What is Litigation Funding? A: It’s a fascinating asset class. It’s non-recourse funding provided to a plaintiff in order to pursue meritorious litigation in exchange for a percentage of the claim. When you have a plaintiff who wants to sue an entity of means, like a large commercial claim or a government institution, individuals don’t often have the means to file a claim. So they approach a litigation funder who can provide funds, and in return, the funder gets a portion of any proceeds resulting from the case. The downside is that if the claim is not successful, there’s no recourse for the funder. Q: It sounds very risky to me. A: And it is. It’s either a very large payout, or it’s zero. Obviously, we do a lot of due diligence work. We approach experts, vet the legal merits. There’s a lot of expense involved in doing that. Plus financial due diligence—to ensure that the defendant can make those payments at the end of the day. When investors come into a fund, one or two losses would be sad, but hopefully, the winners will make up for it. The winners should largely outperform the losers.  Q: Who are you pitching this to? A: This is not man-on-the-street pension money. If you have a low-risk appetite, this is not for you. Q: Sounds like bitcoin. A: *laughs* I don’t want to say it’s like Bitcoin. The main selling point is the non-correlated nature of this asset class. Ultimately, other investments rely on an underlying economic climate. Funding doesn’t.  Q: What kind of time frames? These things can drag, right? A: Yes, these things can take a long time. We bake that into our equation. Large-scale litigation can take a lot of turns, it can take years and years. So it’s similar to private equity in that regard.
Commercial

1818 Venture Capital Acquires Equity Stake in Level

Level, the family law litigation funder founded in 2017, has just sold an equity stake to 1818 Venture Capital. The GBP 20 million deal is also expected to refinance Level’s revolving credit line. Global Legal Post explains that the investment in Level will accelerate its growth and expansion in a way that increases access to justice and fairness. Family law clients are becoming increasingly aware of litigation funding as an option—especially when there’s a lack of funding for proper legal advice. Litigation funding is also helpful in many types of alternative dispute resolutions. Level funds family law cases, including high net-worth divorce cases. Founder and CEO of Level, George Williamson, stated that the investment by 1818 Venture Capital is a testament to the value of Level. This highly flexible funding line will allow Level to pursue opportunities and innovation.
Commercial

LCM Reports Rise in Funding Requests

As lockdown restrictions ease up around the globe, applications for legal funding are increasing. Litigation Capital Management claims that corporate clients are applying for funding at a 68% higher rate than the same period last year. Investors.com reports that current market conditions are creating an increased demand for legal financing. Much of this is related to restructuring and insolvency. This is good news for funders like LCM, which saw a loss of $1.4 million due to court delays. That interim loss is offset by a 15% surge in cash receipts to $10.6 million. LCM asserts that its investment portfolio is 100% balance sheet funded, and now boasts nearly $100 million invested; a nearly 200% increase from the same period during the prior year. 
Commercial

Legl Funding Raises GBP 5Million

Fully digital law firms are on the way, thanks to a new B2B SaaS platform developed by Legl, a London firm. Founded by Julia Salasky in 2019, Legl focuses on law operations.

Business Cloud details that Legl has received funding from angel investors as well as from Samaipata, and First Round Capital among others.

While much legal tech focuses on the actual practice of law, Legl is making advancements in improving the client experience. Startups like Legl are a sign that advancements in legal tech are here to stay.

Commercial

London Legal Merger Creates 15 Partner Firm

Competition between law firms in London just got a little more fierce. Byrne and Partners and PCB Litigation have merged—with Burford Capital’s blessing. The deal will go live next month when PCB Litigation moves into the Byrne and Partners offices. This will result in a firm led by 15 partners. Global Legal Post details that PCB entered into a deal last year with funding giant Burford Capital, which now holds a 32% stake in the firm. The new firm stated that there is an ambitious plan for growth, part of which will involve portfolio financing. The larger goal of the legal merger is to establish a platform to grow specific portions of the practice—including arbitration, corporate crime, and insolvency claims. The firm hopes to expand its reach in Asia, the Middle East, Russia, and elsewhere. The merger is being called a ‘landmark moment’ for the firms, both of which are considered dynamic leaders in the field.
Commercial

Proposed 30% Cap on Legal Funding Returns Could Devastate Class Actions

Australia’s predilection for over-regulating litigation funders is on display again. A proposed 30% limit on gross returns to funders could devastate funding for class actions. New research from PwC’s Jeremy Thorpe suggests that even a 36% return rate for funders would fail to cover even basic legal costs. Financial Review explains that the report, which was commissioned by Omni Bridgeway, illustrates that a cap of as much as 50% could still leave funders wanting. If class actions become a losing proposition for funders, Australians in need of financial support will lose access to justice. Caps may leave some claimants receiving higher payouts. But the net loss to the public becomes apparent when viable claims that deserve adjudication cannot be pursued. Omni Bridgeway’s Andrew Sacker is adamant that caps on returns for funders would deny justice to a significant number of Australians. The firm supports a 50% cap on funder returns. Unfortunately, the Australian parliament still views the funding industry as a cynical means to profit from other’s legal woes. The proposed cap is based on allocation and proportionality, rather than a consideration of potential returns and risks. As such, funders believe it doesn’t represent a reasonable compromise.
Commercial

Alternative Investment Mania

The financial world has been on the receiving end of investor-related whimsy of late. Bizarre and unexpected high-end investments are taking financial pros by surprise. But what is driving these unusual, sometimes even hilarious, investments?

New York Times reveals that some folks are making money hand over fist during the pandemic. While many Americans struggle, others are flourishing as they seek out less traditional investments. Equity and bond investments are becoming less attractive than ever owing to market volatility and a general uncertainty surrounding the pandemic. This is the rationale behind investment in legal funding as well; not as exciting as owning a Tom Brady rookie card, perhaps, but still a worthwhile diversification play.

New tools like Robinhood and Coinbase have enabled unsophisticated retail investors to win fortunes (or perhaps lose everything). Some liken the rise of alternatives to a form of childish expression, explaining that money with nowhere to go may lead to choices that would normally be inadvisable. Robinhood is currently being accused of coaxing users toward addictive gambling behavior. So while these financial blips are interesting, most say that they don’t present any real risk to our financial system on the whole.

Some investments are related to pop culture. Sneakers, sports trading cards, NF tokens (proving the authenticity of digital goods), and outsider art are all selling for incredible sums. It’s been suggested that investments with pop culture significance can retain their value for years—with sneakers being a more stable investment than some might think.

It’s hard to predict how this boom in kitschy investments will end. It’s been suggested that as the COVID vaccines bring a return to normalcy, we could be looking at prosperity and celebration not seen in the US since the roaring ’20s. Here’s hoping the ensuing crash will be easier to weather than the last one.

Commercial

Is Kenya the Next Frontier for Litigation Funding?

The current legal climate in Kenya isn’t much different than that of the developed world. Access to justice is often limited to what the litigant can afford or raise. Those who cannot afford to fund their cases may sell off assets or crowdsource funds. But as of now, the option to seek third-party litigation funding on a non-recourse basis is not available to Kenyans. Business Daily African explains that non-recourse legal funding is not a well-known concept in Kenya. Increasing public understanding of the risks and benefits of the practice may be the first step in widespread acceptance. Funding litigation is risky for investors because of the long time frames between investment and return, and because of the non-recourse nature of the funding. Employing an analyst and an independent lawyer are recommended to anyone considering making an investment in litigation. According to Legalist, 80% of cases funded by the firm have ended in awards or settlements. In general, funders enjoy a high ROI. But this depends greatly on the vetting processes used, and the types of cases in which funders specialize. Right now, demand is high for legal funding in Kenya. And with global funders now flush with capital, it's plausible to believe that some may venture into this somewhat risky, yet untapped market. 
Commercial

Litigation Funders Delighted by DBA Ruling

Regulations regarding damages-based agreements can create havoc in a collective action. Recently, all eyes were on a Court of Appeal ruling regarding truckers and the Road Haulage Association, as well as the third-party funders financing the collective action. Law Gazette details that the Court of Appeal determined that the funding did not constitute a DBA. Had they ruled otherwise, the agreement between funders and claimants could become unenforceable—putting the whole case in jeopardy. The ruling has consequences beyond this one case. Indeed, an affirmative ruling on this issue could have negated most current litigation funding agreements. Lord Justice Henderson referenced a 2006 law—the Compensation Act—as part of the basis for his decision. Lawyers for the Road Haulage Association explain that the ruling is excellent news for litigation funding as an industry, as the judgment affirms that funding contracts are not DBAs.
Consumer

Trademark Case Lands $3 Million Award for Consumer Legal Funder

Oasis Legal Finance was awarded more than $3 million in costs and attorney’s fees after winning a trademark case against its former CEO. Bloomberg Law reports that the case was deemed ‘exceptional’ by Judge Robert W Gettleman, who stated that the company proved most of its claims. He also noted that the defendants were ‘unreasonable’ in their litigation strategy. Oasis fired its CEO in 2013, and later sued him and one other party for trademark infringement after he allegedly launched a similarly named business.
Commercial

How Men Can Best Challenge Gender Inequities

Aviva Will is the founder of The Equity Project, as well as the Co-CEO of Burford Capital. In honor of International Women’s Day, she led a panel on how men can better challenge gender inequities in the legal field. Burford Capital details that the panel was comprised of business leaders from Freddie Mac, Hogan Lovells, and the International Diversity Forum. Despite advancements made by women, men still eclipse women in managerial or leadership roles in law firms and in the business world at large. While legal firms recruit women at greater levels than ever—partnership numbers haven’t changed nearly as much. GC’s can play a role in encouraging gender diversity simply by discussing it. Asking how many women hold leadership roles, or ensuring that everyone working on their case is being fairly credited and compensated for their contributions can go a long way. As firms take steps toward making workplaces and leadership more friendly toward women, attitudes toward diversity are changing dramatically. One panelist explains that there are three specific aspects of law firm culture that need to be updated and expanded—vulnerability, empathy, and humility. These involve listening, sharing honestly, and recognizing that there’s always more we don’t know. Better communication and a willingness to listen to marginalized voices can clear a path for a more diverse future.
Announcements Commercial

Augusta Ventures funds Which? in landmark collective action against Qualcomm

Augusta Ventures, the largest litigation and dispute funding institution in the UK by volume of cases, has provided financing to help the Consumers’ Association (known as Which?) launch an opt-out collective claim, litigated by Hausfeld, against Qualcomm, Inc. for over £480 million, on behalf of a class of around 29 million UK consumers.

Which? is alleging that Qualcomm abuses its dominance in the markets for smartphone chipsets and standard essential patents, the result of which is that Qualcomm is able to overcharge smartphone manufacturers like Apple and Samsung for its technology.  Which? says that those extra costs, which are calculated as a percentage of the price of phone handsets, have been passed on to UK purchasers of Apple and Samsung smartphones.

Which?’s claim will automatically include compensation claims for consumers who had purchased particular models of Apple or Samsung smartphones, either direct from the manufacturer, from a network operator or smartphone retailer, since 1 October 2015.

Robert Hanna, Managing Director of Augusta Ventures, said:

“This claim is about seeking redress for the millions of consumers who are the ultimate victims of Qualcomm’s anticompetitive conduct.  We are very pleased to be working with Which? in their first claim utilising the opt-out regime introduced by the Consumer Rights Act 2015.”  

Background on the legal case

Which?’s claim will state that Qualcomm employs two harmful and unlawful practices:

  • It refuses to license its patents to other competing chipset manufacturers and,
  • it refuses to supply chipsets to smartphone manufacturers, such as Apple and Samsung, unless those companies obtain a separate licence and pay substantial royalties to Qualcomm.

It is argued that these abuses enable Qualcomm to charge Apple and Samsung higher fees for the licences for its patents, than if Qualcomm behaved lawfully.  Qualcomm’s royalties are charged as a percentage of the price of smartphones and which have to be paid by  smartphone manufacturers even when they don’t use Qualcomm’s chipsets.

Which? says that the higher costs are ultimately passed on to consumers and Which? will attempt to recover these under the collective regime which allows Which? to apply to pursue a claim for an aggregate award of damages on behalf of affected UK consumers.

Now the case has been filed, the next step will be for Which? to obtain permission from the Competition Appeal Tribunal to serve proceedings on Qualcomm.  If granted, the Tribunal will then decide whether or not Which? can act as the class representative and whether the claim can proceed to trial.

Hausfeld & Co LLP are supported by a counsel team at Monckton Chambers (Jon Turner QC, Anneli Howard, Michael Armitage and Ciar McAndrew).  Which?’s economic experts are Oxera Consulting LLP and the claim is funded by Augusta Ventures.

About Augusta Ventures 

- Augusta is the largest litigation and dispute funding institution in the UK by # cases. Augusta’s scale enables us to make decisions in market-leading timeframes and fund cases of any size. 

- Augusta is organised into a series of specialist practice groups: Arbitration, Class/Group Action, Competition, and Consumer Litigation, and sectors including Financial Services and Construction & Energy. 

- At the beginning of 2021, with over £300m of capital, Augusta had funded over 240 claims with a market leading ratio of over 70% 

- Augusta has offices in the UK, Australia and Canada. 

About Which? 

Which? is the UK’s consumer champion, here to make life simpler, fairer and safer for everyone.  

About Hausfeld 

Hausfeld & Co LLP, a leading international law firm with offices in Europe and the US, specialises in claimant litigation and collective redress.  The firm filed the first standalone opt-out collective actions on behalf of rail passengers in 2019 and is leading an opt-out action against six banks over their participation in unlawful price-fixing of the foreign exchange currency markets.  Hausfeld leads on Trucks cartel claims in the UK, Germany and the Netherlands. It has acted on some of the most complex damages claims of the last decade: on the ‘Interchange Fee’ litigation against Visa and Mastercard and the Air Cargo litigation against British Airways and 13 other airlines.  It is also presently instructed in ‘Google Shopping’ claims on behalf of price comparison websites against Google and in claims against Marriott International, YouTube and Facebook in data breach and privacy litigation.

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Commercial

Australian High Court Rules on Competing Class Actions

Australia’s High Court determined by a slim 3-2 majority that first-come-first-serve will not apply to overlapping or competing class actions. Some have suggested that there should be a presumption that the first case filed should proceed, and later cases stayed. The High Court disagreed, and instead suggested numerous factors that should be considered. Lexology details the list of considerations courts weighed in a recent determination on class actions against AMP. These included:
  • the scope and nature of the cause of action
  • working theory of the case
  • class size
  • availability of legal funding and other resources
  • progress made
  • experience of the legal team
  • estimated net return to claimants
Third-party funding played an important part in the judge’s decision. The funding agreement largely determines any hypothetical payout to class members based on percentages spelled out in the funding agreement. The High Court asserted that a first-in-line presumption could lead t a mad rush to file cases as quickly as possible. This could negatively impact class members and clog court dockets. Moving forward, it appears that litigation funding agreements will play a big role in determining case order when there are overlapping or competing class actions. If courts continue to weigh proposed payouts to claimants, the exact terms of third-party funding agreements will be subjected to even greater scrutiny by courts. This in turn may lead to more competitive agreements and greater competition between funders. Still, this High Court ruling doesn’t necessarily set a national binding precedent. Many are calling for greater uniformity in how cases are prioritized across the country. The Federal Government is likely to step up as they continue their efforts to regulate third-party legal funding.
Announcements Commercial

Mill City Ventures reports record year for revenues and earnings

Mill City Ventures III, Ltd. ("Mill City" or the "Company") (OTCQB: MCVT), a non-bank lender and specialty finance company, announced today its revenue and net income for the year ended December 31, 2020 was a record from 13 years in business.
  • Revenues increased 700% to $1.3M from $161,000 for the prior year
  • Earnings from operations was $561,000, an increase from a loss of $672,000 for the prior year
  • Net asset increase from operations before taxes was $2.5M, compared to a net loss from operations before taxes of ($657,000)
  • Shareholder equity increased 16% to $11.6M from $10.1M, after giving effect to a December 2020 dividend payment of $539,000
Mill City's net margins from operations were 43% for its first full year after a complete shift in business operations. Net asset value per share increased to $1.08 from $0.91. Chief Executive Officer Douglas M. Polinsky stated, "We undertook to transform our business in 2020. In so doing, we have tried to remain nimble so as to take advantage of opportunities as they arise.  This has proven critical to our success since potential borrowers often come to us in situations not bankable due to time constraints or other issues.  We take the time to understand the situation and confer with our board and receive input from advisors on how to analyze the opportunity." "We have enjoyed lending opportunities in title loans, adjudicated insurance settlements, real estate bridge loans, and collateralized personal loans to high-net-worth borrowers. In addition, we continue to leverage our experience in the public market to participate in the SPAC market and explore opportunities in litigation finance. We will continue to make our decisions after sufficient due diligence and incorporating appropriate risk-mitigation processes, structures and terms," Mr. Polinsky continues. The investment portfolio has continued to add to the growth in assets into the first quarter of 2021. Mill City also repurchased 381,489 shares during the year. Mill City's forward-looking statements in this release are made pursuant to the "safe harbor'' provisions of the Private Securities Litigation Reform Act of 1995.  These forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements, including without limitation continued demand for short-term specialty non-bank loans, increased levels of competition, new products or offerings introduced by competitors, changes in the general economy, changes in interest rates or the market for loans, and other risks. About Mill City Ventures III, Ltd.
Founded in 2007, Mill City Ventures III, Ltd., is a short-term non-bank lending and specialty finance company. Additional information can be found at www.sec.gov.
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Commercial

Big IP Settlements Can Happen, Even for Nonpracticing Patent Holders

Billion-dollar verdicts in IP cases don’t happen every day. Even when they do, they typically don’t hold up on appeal. Yet these sizable verdicts turn heads in the media and bring attention to the value of patents. This attention is a welcome change for some who claim that the media has an anti-patent bias. Above the Law explains that a billion-plus verdict from February has commanded media notice. The verdict in Caltech v Apple/Broadcom was covered by big outlets like WaPo and Bloomberg. Investors in Litigation Finance often choose IP-related investments because of the potential for a sizable award.  What other impacts do these large IP verdicts have? They may encourage patent holders to take their case to trial rather than accepting a lowball settlement. The jurisdiction responsible for the verdict—Western District of Texas—will no doubt have patent holders flocking toward it as defendants attempt to flock away. The fanfare here isn’t just about the size of the verdict, but the fact that it went to a non-practicing entity. Juries may presume the value of the patent because money was spent to purchase it—particularly if the purchaser is another large tech company. Some are asking if most juries will be inclined to presume a patent has a high value because patent holders are willing to go to trial to protect it. Seeing funders like Fortress reap the benefits of mega-verdicts can inspire increased investments and new investors. The demand for legal funding will likely also increase, as plaintiffs come to appreciate the impact funding can have on pursuing an action effectively. Getting adequate funding for a case can mean the difference between accepting a low settlement and having the means to go to trial.
Announcements Commercial

Kerberos Capital Management Named Top 3 Global Newcomer of the Year by Private Debt Investor

Kerberos Capital Management was selected as the #3 Global Newcomer of the Year for 2020 among private debt funds on a worldwide basis by Private Debt Investor, a global independent publication based in London covering the private debt and private equity industries. The Private Debt Investor Awards acknowledge leaders across an array of categories and are the culmination of a broad-based voting process among industry participants, including the private debt, private equity and institutional limited partner communities. Kerberos Capital Management is a private credit asset management firm specializing in direct lending to law firms and opportunistic private credit. Since 2018, Kerberos has provided bespoke solutions to borrowers and law firms throughout the United States and originated over $300 million in direct lending transactions. Kerberos’ investors include some of the world’s most respected pension funds, multi-family offices, and asset managers. Kerberos’ investment team is comprised of senior members from both the legal and private credit industries, including former principals of the world’s leading law firms and multi-billion dollar private credit funds. The firm is headquartered in Chicago.
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Commercial

Flat 2020 Performance for Law Firm Belies New Strategy

In a sign of how law firms might be growing more cost-conscious, Trans-Atlantic legal firm Bryan Cave Leighton Paisner cut its workforce by 4% globally as part of its newly adopted strategic plan. This included closing one office in Beijing, and intensifying focus on specific areas of practice. Law.com reports that financial performance was basically flat throughout 2020—which is not as bad as it sounds given the economic impact of COVID. Gross revenue decreased about 1% to just over $860 million. Profits per partner went up by about .5% to $837,000. The firm is poised to flourish in the near future, thanks to Project Advance. This new strategic plan was developed in concert with McKinsey & Co. It focuses on three ‘growth engines:’ litigation and investigations, real estate as an asset class, and mid-market corporate and finance. Other aspects of Project Advance include reducing personnel company-wide by 118, which included staff members and attorneys. Though the Beijing office was shuttered, offices in Hong Kong and Singapore remain active. The firm currently employs 1,370 lawyers across eight countries. Early in 2020, a Paris team with 21 layers was added. To ensure focus on the main objectives of Project Advance, the firm named Sean Odendahl as Chief Transformation Officer in October of last year. It’s anticipated that staff will return to offices after June 30 of this year, depending on COVID-related factors. Some virtual work is expected, as well as open-space office plans and other steps to reduce the firm’s footprint. Determinations are currently being made as to when it makes sense to bring people together for in-person meetings, as opposed to remote meetings.
Commercial

Omni Bridgeway Expands Arbitration in German-Speaking Regions

Dr. Martin Metz LLM has recently joined the team at Omni Bridgeway as Senior Legal Counsel and Investment Manager. Formerly of DLA Piper, Metz will now be based in the Cologne office. Omni Bridgeway announced that Metz joins two new hires in German-speaking regions, expanding the company’s reach, knowledge base, and capacity for cultural awareness. Dr. Arndt Eversberg, Omni Bridgeway Germany’s Managing Director, explains that request for funding has skyrocketed in Germany of late. The specialized experience of Dr. Metz promises to strengthen the practice overall.
Commercial

Frank DeCosta Interview: Litigation Leader in International IP

Patent litigation cases have soared dramatically since the beginning of the pandemic. Frank DeCosta of Finnegan, Henderson, Farabow, Garrett & Dunner, knows that companies are leveraging IP assets with strategic litigation—which is more valuable now than ever before. Bloomberg Law recently spoke with DeCosta about how third-party litigation funding drives IP litigation, hiring a niche attorney, and more. DeCosta begins by explaining that while remote hearings and depositions have been common since COVID, jury trials are still at a dead stop. DeCosta explains that his firm was already set up for remote meetings before COVID hit, which gave them an edge while others were left updating their tech. Remote meetings also allow for more staff involvement and education because travel expenses are no longer required to bring low-level staffers into a meeting. When asked what causes the COVID-related spike in IP litigation, DeCosta explained that patent litigation is cyclical. Typically, trying economic times lead to an increase in patent filings and IP cases. Reasons to initiate IP cases vary, and might include generating revenue, leveraging assets, or justifying a previous investment in a patent. Some credit the availability of litigation funding in fueling new IP suits. Indeed, some prominent funders report a nearly untenable downpour of requests for funding. Attracting new clients is an important aspect of any legal firm. DeCosta explains that the best way to find and keep clients is to serve as a reliable, trustworthy advisor. Anticipating issues before they arise, understanding goals and caveats, and truly knowing a company and staff are all crucial—and more difficult than ever because interactions must now be scheduled and handled remotely. On the subject of diversity, DeCosta recommends seeking talent from STEM-related undergrad or graduate programs. Like many firms, Finnegan’s mission is to be intentional and fervent in seeking out a diverse and talented team.
Commercial

Indiana Resources Ups the Anti in Tanzanian Government Action

Indiana Resources is still pursuing its case against the government of Tanzania. The case deals with the alleged expropriation of the southern African Ntaka nickel project. Indiana’s claim now exceeds $95 million, with the first hearing scheduled for next month. Business News explains that the International Center for the Settlement of Investment Disputes (ICSID), a part of the World Bank, has formed an Arbitral Panel that will hear the first procedural hearing on April 22. Panel members include representatives from Singapore, the US, Botswana, and Tanzania. Chairman of Indiana Resources, Bronwyn Barnes, stated that the company is glad to hear that the panel has been formed and that Indiana is well prepared to move forward with the claim. She goes on to explain that the case is being funded with non-recourse litigation funding, so shareholders will not have to bear the cost of pursuing the case. The case itself revolves around the Tanzanian government changing mining laws in 2018. Despite assurances to the contrary, Ntaka Hill was expropriated in 2019, leading to IR requesting arbitration the following year. Indiana asserts that the Tanzanian government was obligated to compensate companies for any investments that were nationalized or expropriated. The value of the mining project is about $212 million, though recent rises in metals pricing suggest that estimates may be on the low side. Nickel, copper, and cobalt have all risen in value in recent years. Litigation Capital Management, a London-based legal funder, is footing the bill for the arbitration costs with a cap of nearly $5 million. Indiana Resources is being represented by LALIVE, a Europe-based specialist international arbitrator.