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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.

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.
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.
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.
Commercial

PGMBM Raises Over GBP 100 Million to Fund Litigation

International firm PGMBM has formed a partnership with alternative investment firm North Wall Capital. This brings PGMBM’s total capital raised to more than GBP 100 million. Law Gazette asserts that the money raised will be used to fund alternative dispute resolution, antitrust litigation, and class-action suits. This is good news for PGMBM, whose class action was thrown out by the High Court last year. The court called the action an ‘abuse of process.’ PGMBM Chairman Harris Pogus stated that the firm's goal is to keep fighting for those who were wronged by large corporations. The firm continues to grow and attract top talent from around the world.
Commercial

Woodford Equity Class Action Moves Forward

Law firm Leigh Day is on its way to getting justice for the roughly 4,000 investors in the now-defunct Woodford Equity Income Fund against Link Fund Solutions. In fact, the corporate directors could find themselves in High Court within the next few months. Portfolio Adviser explains that Leigh Day sent an LBA to Link on behalf of investors who lost money due to the Woodford Equity collapse. The letter asserts that the fund was mismanaged, and that Link did not maintain reasonable levels of liquidity. It went on to say that the failure was avoidable had proper diligence taken place. Link has been given three months to respond to charges that they used shady tactics to circumvent rules meant to prevent this type of failure. These include listing unquoted securities on the ISE in Guernsey, improper trades with other funds managed by Woodford, and unquoted companies canceling and then reissuing shares. Leigh Day is using third-party litigation funding, which means claimants won’t have to foot the bill for legal representation. This is precisely the sort of case litigation funding is meant to aid. Ordinary citizens defrauded by Link will now see their day in court. Leigh Day spokesman Boz Michalowska stated that Link failed to take the steps needed to protect investor interest.
Commercial

Does Third-Party Legal Funding Carry National Security Risks?

Influence. It’s one of the key concerns that lawmakers have about third-party litigation funding. The fear is that funders, who do not have a direct connection to a legal dispute, yet fund it in the hopes of earning a share of the award, may unduly influence decisions about the case that may adversely impact courts, plaintiffs, or defendants. So what happens when funded cases involve one or more federal governments? Defense One details that in some instances, litigation isn’t used strictly to address grievances. Litigation can also be used unscrupulously to cause delays, for harassment, to publicly humiliate someone, or to gain access to confidential information that can’t be obtained by other means. There are laws against malicious litigation, but some say that the increase in access to the global legal theater may render these laws insufficient to prevent grievous harm. As litigation funding grows in popularity, so do the cries to regulate and control the practice. Some say it’s time to look at the impact this practice can have on national security. For example, as transparency laws come into effect, disclosures once kept private may now be widely shared. These waters are murky, as jurisdictional inconsistencies lead to confusion on a global scale. While the legal funding industry has done a commendable job of self-regulating, their guidelines for conduct and best practices are not legally binding, nor are they accepted industry-wide or worldwide. Now, industry and government leaders are questioning how transparency provisions should be altered in order to protect national security interests. Therein lies the issue. We cannot know if foreign or malicious interference is happening without meaningful transparency laws. Foreign lobbying, global connections, and jurisdictional discrepancies all engender the need to amass data, as well as gain input from industry leaders, and find ways to mitigate the risks inherent to disclosures and transparency among third-party funders in multinational cases.
Commercial

Adam Silverman Joins Omni Bridgeway Singapore

A new, Singapore-based Investment Manager has joined Omni Bridgeway.  Omni Bridgeway details that Adam Silverman is a former dispute resolution lawyer with global expertise. His solicitor qualifications span England, Wales, and Hong Kong. Silverman spent six years on the dispute resolution team of Freshfields Bruckhaus Deringer and in the Litigation and Regulatory Department of Bank of American Merrill Lynch. Silverman is expected to be responsible for sourcing and vetting investment opportunities and overseeing cases funded by Omni Bridgeway. His experience with arbitration, insolvency, litigation, claims monetization, and portfolio funding makes him a valued addition to the team. As global demand for legal funding grows, Omni Bridgeway remains an industry leader, having funded the first financed insolvency claim in Hong Kong. The Aussie-based funder was an early supporter of arbitration cases in Singapore and Japan, and also helped found the Indian Association for Litigation Finance.
Commercial

Enhanced Damages Award Granted in IP Case

Treble damages have been called the white whale of IP and patent law. For contingency lawyers, treble damages—an award where the damages are multiplied by three because of willful infringement—can be a dream come true.  Above the Law details that in reality, only a tiny percentage of patent cases end with an enhanced damages award. When one does, it’s generally of interest to the entire legal community. Sometimes, the details are entertaining as well. A patent case involving EagleView and Xactware Solutions is one such example. Both tech companies compete with similar products and an overlapping customer base. EagleView amassed a large portfolio of patents, and in late 2019, was awarded a $125 million verdict in a case involving five different patents. Rather than taking the money and running, EagleView noted the discovery of willful infringement and used that to try to secure treble damages. The trial judge agreed, awarding damages in the maximum allowable amount. In the end, EagleView wound up with the original award, incidentals, costs, and an additional $375 million in enhanced damages. It is possible that this number will be reduced on appeal, or perhaps via settlement. While the court decision is long, it can be boiled down to a few points:
  • 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.
Given the conduct described, it’s understandable how the court could make the enhanced damages award. If the award survives a Federal Circuit court appeal, it could set a precedent that’s likely to be repeated.
Commercial

Burford Roundtable: COVID-Inspired Changes in Litigation Finance

Burford Capital is in the midst of assembling a study of how CFOs can make better use of legal funding. Finance professionals Amanda Parness, Michael Curran, and Jim Kilman lend their thoughts to the discussion. Burford Capital begins by gauging the interest in financial products that mitigate risk from claims that might not otherwise be litigated. Parness: CFOs and corporate advisors have a responsibility to look into innovative alternate sources of monetization. Looking at the value of pending litigation or awards should be standard. Curran: Lending certainty to cost estimates is a big deal, and can have a direct and immediate impact on the finances of a business. When operating funds are low or COVID has taken a toll, legal funding becomes even more attractive. Burford: Is COVID spurring the changes we’re seeing now in terms of legal departments thinking more commercially? Kilman: While COVID is accelerating the momentum of these changes, many were already underway long before. Legal departments are generally a cost center for businesses. But funding can reduce cost, lower risk, and bring in spendable income at a time when funds are low. Curran: The changes we’re seeing now will likely be long-lasting, and will almost certainly be more creative and commercially minded for the foreseeable future.
Commercial

A New Resource for Litigation Funding Fundamentals

Litigation Finance began as a way to expand access to the legal system for those who could not otherwise afford it. Funders could provide non-recourse cash to a promising case in exchange for a percentage of any award. If the case fails, the funder loses its investment. Third-party legal funding is still used this way, but has also expanded to portfolio funding, claims monetization, and more. Omni Bridgeway explains that once legal and business professionals understand the basics of legal funding, they’re more likely to see the many possible benefits. With this in mind, the firm has developed a primer on the industry. The resource material includes a brief history of litigation funding and its relation to champerty laws that may still impact its implementation in some jurisdictions—though that’s becoming rarer by the year. It goes on to discuss how legal funding is defined, and the various forms it can take. Benefits discussed include the flexibility of legal funding, and how it can level the playing field between ordinary claimants or plaintiffs versus huge corporations or even governments. Explanations of non-recourse funding, risk-sharing, and what one should expect when inquiring about funding for a case are all detailed. Ultimately, Omni Bridgeway is committed to ensuring that the public and private sector grow mindful of the benefits that can be realized through the use of Litigation Funding.
Commercial

After CIO Departs, Partners Capital Plans for Future

Partners Capital has been through a lot in the last year. Arjun Raghavan became the CEO in July of last year. Since then, the firm has hired a new managing director and a head of ESG. Last month, Colin Pan departed as CIO. Despite the internal reshuffling and the impact of COVID, Partners Capital reportedly enjoyed its best year ever. Institutional Investor details that Pan will stay on at PC for a further six months before he departs to begin his own investment startup. Partners Capital is known for making investments in third-party legal funding, a legal service that expands access to justice for those who could not otherwise afford it. Raghavan expressed regret at Pan’s departure, but is quick to assert that PC maintains a wealth of talent that together, can fill the chasm left by Pan.
Announcements Commercial

Siltstone Capital Raises Initial Litigation Finance Fund

Siltstone Capital, LLC ("Siltstone"), a Houston, Texas based investment and advisory firm, announced the successful closing of Siltstone Capital Litigation Fund, L.P. (the "Fund"). Siltstone, through its affiliate Litigo Financial, LLC ("Litigo"), will invest in commercial litigation across the United States, and welcomes the opportunity to provide capital to litigants to pursue their claims fully. The Fund will focus on commercial litigation, with a unique focus on energy and patent litigation. Founded in 2013, Siltstone strives to create lasting value for its stakeholders though organically sourced alternative investment opportunities that offer downside protection with significant upside potential. Siltstone believes that its rare combination of investment and legal expertise will help solve real-world legal problems on behalf of clients, in a budgetary sensible way. Siltstone's mission is to make a meaningful difference for clients by focusing on clarity, fairness, and innovation. Robert Le, Siltstone's Co-Founder and Managing Partner, commented, "With our investment acumen, in-depth sector focus, and unique skillset to identify compelling legal cases to fund, we believe that we will be able to deliver significant value to our litigants and investors for years to come." Litigo handles all of the legal due diligence in-house and uses a proprietary software platform that integrates with AI in order to efficiently assess the merits of each case. Mani Walia, who serves as Managing Director and General Counsel at Siltstone, leads the Fund's efforts. Earlier in his career, Mr. Walia clerked for both Judge Jane R. Roth of the United States Court of Appeals for the Third Circuit and Chief Judge Hayden W. Head of the United States District Court for the Southern District of Texas. Additionally, Mr. Walia practiced law at Susman Godfrey in the Houston Office, where he litigated high-profile cases. Mr. Walia stated, "We believe that there are significant opportunities when it comes to investing in litigation finance. We are also particularly excited to bring our in-house legal expertise, investment, and technology experience to this space and are honored to help plaintiffs who need capital to pursue their claims even the playing field."
Commercial

Burford Roundtable: CFO Wish List for Legal Teams and Firms

Litigation funders already know that legal assets can be a source of revenue for businesses—especially those left strapped for operating funds during COVID. The problem? Finance departments may not realize funding is an option. To bridge this knowledge gap, one leading funder conducted an informal survey of finance professionals. Burford Capital details a range of perspectives on various subjects. Below are some key takeaways: Subject: Challenges of Affirmative Recovery Amanda Parness: A good CFO must balance cash flow, timing, and the overall impact that litigation can have. Planning for every step in the process with estimates and cost caps are essential. Michael Curran: General counsel often doesn’t consider the legal department to be a money-maker and therefore may be applying the wrong metrics when determining how to proceed with a case.  Subject: The Illiquid Nature of Corporate Legal Assets Jim Kilman: Commercial claims are often overlooked by CFOs, but if they understood how easily those claims can be turned into liquid assets—they’d probably find that option attractive. Parness: CFOs are less likely to consider that a potential award is a monetary asset, and this needs to change. Subject: Barriers to Facilitating Legal Finance Curran: Valuation can be a stumbling block if CFOs don’t have a credible person to determine the value of legal assets. CFOs must be fully informed of the facts in order to make a decision with confidence. Kilman: A partner with deep expertise or relevant niche experience can make a profound difference. Ideally, a CFO needs someone to offer unique, relevant, new ideas and can back them up with funding and experience.
Commercial Covid-19

Is Big Law Ready to Accept the Death of the Billable Hour Model?

A new survey by Blickstein Group and Legal Value Network suggests that large law firms may be more open to the idea of non-traditional fee arrangements. At the same time, more than half of the survey respondents assert that attorneys' resistance to change is the most difficult aspect of adopting new payment models. Bloomberg Law details that since 2013, lawyers at major law firms have been asked about adapting and updating the way they charge for legal services. Since that time, lawyers have indicated that they haven't been all that interested in doing so. One co-author of the survey, David Cambria, believes that COVID brought an urgency that illustrates the importance of flexibility in pricing structures. This may not be an obvious result of COVID, but the general turbulence has spurred the legal world to make changes that are likely to last even after a return to normalcy. Remote working has led to increased use of technology. In turn, the tech itself has become more advanced and specialized. Software is commonly used to hold remote meetings, facilitate collaboration, and even obtain signatures from across the globe. Partner compensation is another sticking point in some firms—even though partner payouts have increased dramatically during the pandemic. Partners who are making huge annual profits are unlikely to want to explore new pricing models that add value for clients. Will big law firms become less averse to change over time? Only time will tell. 
Commercial

Virtual Depositions Coming from Remote Legal

Remote depositions have become part-and-parcel of remote legal work during the pandemic. Now, one litigation funder has taken steps to partner with a remote deposition legal tech solution. LexShares reveals that it has partnered with Remote Legal, a legal services provider that lends expertise to video conferencing for depositions, court reporting, and arbitrations, among other proceedings. This technology differs from standard video chat applications, as it was specifically tailored to meet the needs of legal proceedings to facilitate socially distant meetings. Some of the features available include virtual exhibition of documents, live voice-to-text, a tech-enabled court reporter, and dedicated private chatrooms for privileged discussions. It’s expected that even after COVID, virtual proceedings will continue as they are a cost and time-saving measure.
Announcements Commercial

Deminor successfully raises EUR 40m to expand the growth of its litigation funding portfolio

Deminor Recovery Services announces the closing of a financing round consisting of equity, senior bank loans and mezzanine finance for an amount up to €40 million to support its rapidly growing litigation funding activities globally. 

The financing round is supported by the current shareholders as well as new investors including Saffelberg Investments, Finance&Invest Brussels and various other investors. The bank financing portion is provided by KBC Bank.  

Along with its current cash position and expected realizations from the existing portfolio, Deminor expects to be able to commit €90 million in new litigation funding investments over the next 2-3 years. These investments will be on Deminor’s own balance sheet, allowing the company to continue to make fast decisions and propose flexible funding terms. Crucially, Deminor’s Investment Committee retains the ultimate decision making authority as to which cases to invest in. 

Deminor’s core mission is to help investors and businesses monetise their legal claims by supporting individual and group litigation. We put our own money at stake:  we pay all legal costs and only receive a return if a case is successful and our client achieves a recovery. Originally started in the field of collective securities actions where Deminor has built and occupies a leading place in non-US jurisdictions, the business has been extended and now also includes private antitrust litigation and B2B commercial litigation.  

Deminor prides itself on providing more than just funding. We only take on good causes and we never compromise on our values. We stand by our clients and are determined to achieve recoveries for them. Clients can benefit from Deminor’s 13 year-long expertise in supporting complex international litigation and, where legally permitted, its unique claims management and back-office execution capacity. The company boasts one of the most impressive track records (over 80%) in the industry thanks to its careful selection of cases and management of litigation risks.  

To serve its growing client base in the US, UK and Asia, Deminor has opened offices over the last 3 years in New York, London and Hong Kong. The team is composed of 30 legal, finance, marketing and claims management professionals speaking 13 different languages.  

“This funding round is a milestone in the history of Deminor. We are thrilled to welcome our new investors and expand our success story thanks to their support. The additional capital will allow us to respond to the growing demand that we are seeing for litigation funding in our core markets and to achieve our mission statement: to give businesses access to the best legal representation and highest standards of justice when pursuing their legal claims.”, says Erik Bomans, CEO of Deminor. 

Commercial Special Features

Key Takeaways from LFJ’s Podcast with Louise Trayhurn of Legis Finance

Louise Trayhurn, Executive Director of Legis Finance, sat down with LFJ to discuss a broad range of industry topics, including Legis’ bespoke approach to managing client relationships, the various funding and insurance products her company offers, the growing trend of GCs and CFOs extracting more value out of their legal assets, and what trends she predicts for the future of the industry. Below are key takeaways from the conversation, which can be found in its entirety here. Q: How does Legis approach the issue of pricing transparency and consistency? A: At Legis, we share with the client, the law firm, and the funder all of the returns listed. It’s very transparent. Every party can see what’s going on. If they don’t like model scenarios...then we can adjust it. ‘Pivot’ is a word that’s used frequently in our office. We’ll constantly amend, adapt, and make changes here and there to try and get everybody comfortable. Q: In the US, contingency fees have long been used by lawyers to share risk with their clients. Can you explain the benefits of DBAs as opposed to conditional fee arrangements and the billable hour model? What has Legis specifically been doing to press for this transition to DBAs? A: We formed a working group for those interested in DBAs. The idea behind it was to...discuss the possibility of a standard damages-based agreement. I, having a background as a litigator, thought this was fairly ambitious. We got a whole group of litigators together, and as well as looking at the broader picture of a standard form document, we had a more urgent task, which was to work together to provide feedback to the team looking at amending the DBA regulations. Q: In the wake of COVID, we’re seeing a mindset shift that’s been talked about for years. What have you been noticing in terms of how GCs and CFOs are considering litigation finance? What do you see happening out there? A: GCs are sitting in their board rooms and they’re acting as cost centers. They take their seat and the first thing they’re asked is ‘okay, how much is legal spend going to be this month?’. There are numerous companies out there committed to spending a certain amount each month on their litigation. It’s just money going out the door, and it’s hard for those GCs to show their value other than reducing the amount of legal spend this month for the same results. Now, you can use litigation finance to generate revenue. Instead of being a drain on the company’s cash, you can in fact add; you can be a profit center, if you use your litigation assets to make money for the company instead of costing them money. You have funders willing to do the due diligence in an independent manner—I mean, we don’t get paid for picking bad cases—and GCs have in their hands a very powerful independent check on their cases, and that can help in all kinds of ways. Q: Broadly speaking, what predictions do you have in terms of the maturation of the Litigation Finance market. What can we expect this year and down the road? A: Certainly I’m going to say increased use of funding. And apart from that, there may well be a consolidation of existing funders, or funders standing behind funding. Increased use of different financial products to back funding—insurance or other entrants to the market. Or a secondary market of products available to funders to manage their own risk, and possibly a secondary market available to investors to package these litigation assets, standardize the documentation, and buy and sell risk. That should help open the marketplace for these institutions that want to create secondary markets.