• Defendants acted with the express intent to lure EagleView’s customers and decrease their reach.
• Enhanced damages in this case are a punitive measure, meant to chastise and to dissuade others from similar tactics.
• The court was put off by the acrimonious and borderline underhanded nature of the trial itself, and the unnecessarily nasty discovery process.

Despite Quibi’s failure to corner the short-form Netflix market, its IP dispute with Eko is still very much alive. Eko is being funded by Elliott Management—which has fought Quibi’s every attempt to get through the discovery process. In fact, Elliott tried to quash an SDNY subpoena investigating how much Elliott knows as the legal funder of the case.

Above the Law explains that this situation and its outcome should be of interest to litigation funders, as well as IP litigators and their clients. After all, the questions raised by Quibi’s opposition to Eko’s attempt to quash the subpoena could set precedent for future IP cases that are backed by third-party funding.

Some have speculated that Elliott’s decision to fund Eko was predicated on a romantic relationship involving a founder at Elliott. Others are focusing on Elliott’s unusual decision to allow Eko to run the case as if money were not an issue.

Quibi seems to suggest that Eko’s inability to demonstrate its assertions is reason enough to allow discovery into the funding agreement. The company also suggest that Eko’s claim for damages is ‘unusually aggressive’ to the point of suspicion. Earlier in the case, Quibi sought to deny that it was the giant in a David v Goliath situation. Now that Quibi had folded, the likelihood of Eko using that argument is slim.

Quibi has further suggested that Eko may be controlling litigation and settlement decisions, contrary to what ethical standards allow. Combined with accusations of Elliott’s disclosure of funding being intentionally belated, it’s a compelling argument for increased discovery.

Ultimately, Quibi asserts that Elliott’s relationship with Eko is business related, not legal in nature. How the court rules in this motion will no doubt impact discovery relating to litigation funders for some time to come.

Some say that Britain is in the midst of a third wave of class actions. After the US and Australian markets embraced the practice of collective actions against big businesses and governments, class actions—especially those backed by third-party legal funders—have gained popularity around the globe.

City A.M. explains that some see the combination of claimant firms and litigation funders as having created an exploitative market where businesses find themselves at the mercy of class action claimants. Perhaps what those people really fear is increased access to justice and a fair fight on behalf of those who would previously be steamrolled by huge corporations with limitless resources. A prime example of this is when Shell Oil had to compensate Nigerian farmers for damage resulting from two oil spills.

Fears of large class actions are amplified by COVID, and by the outcry from insurers who assert that they can’t possibly honor all of their policies in the wake of a global pandemic. Complications stemming from Brexit may also bring with them a spate of class actions involving logistical issues. It’s possible that companies will rally together to file a collective claim addressing the impact on their businesses.

Chris Bushell, partner at HFS, warns that a wave of new class actions could be coming. At the same time, others at HFS assert that it’s unlikely that US trends in class actions will repeat themselves in the UK. One main difference between these jurisdictions is ‘opt-out’ (where every impacted class member is considered a claimant unless they specifically ask not to be) and ‘opt-in’ (where claimants must register to become part of the case).

As financial uncertainty grows, potential clients of every stripe are looking for ways to finance cases, see their day in court, and improve their bottom line. Legal finance offers a variety of creative solutions to keep balance sheets in the black, and to improve access to justice for those who need it most.

LCM details that Nick Rowles-Davies appeared in a webinar hosted by the UAE branch of the Chartered Institute of Arbitrators. Rowles-Davies began with an overview of litigation funding—specifically detailing the difference between single case funding, class actions, insolvency and liquidation, and portfolio funding arrangements.

Portfolio funding is of particular interest as the fastest growing funding agreement type. Rowles-Davies asserts that corporate clients, in particular, take issue with how funders vet cases.

Legal funding was once predominantly about David v Goliath situations where citizens found themselves at the mercy of corporate or government entities with seemingly limitless funds. But as ‘legal funding’ morphs into ‘providing legal capital’, some fear that average citizens in need might be pushed aside in favor of corporate clients that can ultimately provide larger rewards.

Globally, litigation funding is only increasing in acceptance. Some countries have, or are in the process of creating, new laws to invite and loosely regulate the industry. A few countries are poised to become desirable hubs for international or cross-jurisdictional litigation.

The COVID pandemic has pushed the industry forward in several ways. In the early days of COVID, some corporate clients put cases on hold, fearing that looming budgetary issues could arise. Businesses considering launching a dispute may have decided against it for budgetary reasons. Law firms representing corporate clients share these concerns—all of which have led to a rise in litigation funding.

That trend is expected to continue for many years to come.