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Commercial

Australian Joint Committee Seeks Further Regulation of Litigation Funders

Massive new oversight is needed to reign in the litigation funding industry—that’s the conclusion according to a report from the parliamentary joint committee on corporations and financial services. An array of recommendations has been suggested, though it did not include Frydenburg’s most severe requirements. Independent Financial Advisor details some of the recommendations suggested by the committee. These include the appointment of independent fee assessors to vet fees and agreements involving firms, funders, and class participants. Oversight is also recommended with regard to who may fund cases, and what percentages they will be allowed to take before a settlement can be accepted by the court. Essentially, the new regulations are meant to stem what the committee sees as excessive, unreasonable, or disproportionate fees to funders—often at the expense of those who were actually wronged. It’s also meant to reduce the desirability of Australia as a hot spot for international or cross-jurisdictional litigation. As of now, no regulator has taken legal action against a funder. But that may change if the committee gets its way and new regulations are adopted. Many believe there is a lack of symmetry that needs to be addressed in order to maintain public confidence in litigation funding.
Announcements Commercial

Odyssey Marine Exploration Prepared for Strong 2021 with Increased NAFTA Funding and 2020 Successes

Odyssey Marine Exploration, Inc. (NASDAQ:OMEX), a deep-ocean exploration pioneer engaged in the discovery, development and extraction of deep-ocean minerals, has secured up to an additional $10 million to support its pending North American Free Trade Agreement (NAFTA) claim against Mexico and provided an update on the successful execution of Odyssey’s 2020 business plan objectives.

The NAFTA claim relates to the unlawful denial of the environmental permit for subsidiary Exploraciones Oceanicas’ (ExO’s) offshore phosphate project. Odyssey’s existing litigation funder, Poplar Grove, LLC, has agreed to provide up to an additional $10 million to fully support the NAFTA claim under substantially the same terms as our prior agreement. Poplar Grove is managed by Drumcliffe LLC, a private investment management firm that oversees a high-value litigation funding portfolio representing more than $14 billion in claims.

“Drumcliffe’s sole focus is to finance and support the recovery of value for the victims of global fraud, corruption and wrongdoing. The strength of the First Memorial filed by Odyssey in this case reinforces our belief in a successful outcome and supports our decision to invest additional capital to fund the case through the hearing and anticipated award,” explained James C. Little, CEO of Drumcliffe.

“One of our key objectives for 2020 was advancing the realization of value from the significant investment we have made in our ExO Phosphate Project in Mexico,” stated Mark D. Gordon, Chairman and CEO of Odyssey. In September, we filed a strong and compelling First Memorial in the NAFTA case. It was the culmination of many months of work by our legal team at Cooley, supported by our internal project development and research team, to gather documentary evidence and 20 expert reports and witness statements that demonstrate the merits of the case, the strategic size and grade of the resource, the operational viability of the project, and the project’s value. We are extremely confident in our case and, with the addition of the expanded funding commitment from Poplar Grove, we are prepared to take the case through to its final conclusion to realize the more than $2 billion value of this asset.

“In addition to making substantial progress on the ExO Phosphate Project, the Odyssey team has continued to move the business forward by advancing the development and value of our diversified mineral project portfolio and positioning the company for significant successes in the coming 18 months. Our achievements, despite being in the middle of a once-in-a-century worldwide pandemic, are a tribute to our dedicated team of professionals who tirelessly work to live our core values and achieve the ambitious goals we set for ourselves. Investors’ confidence in our business plan and the progress we continue to demonstrate enabled us to achieve a major goal of securing multi-year operational funding,” added Gordon.

Realizing the Value from the ExO Project:

Odyssey’s most significant project is the ExO Phosphate Project in Mexico, which is one of the largest and highest quality phosphate sands deposits in the world. It is currently the subject of $2.36 billion claim against Mexico under NAFTA. In early September, Odyssey’s legal team filed the First Memorial in the case alleging that Mexico’s prior political administration wrongfully denied environmental approval of the ExO Phosphate Project in breach of NAFTA.

In 2012, ExO was granted a 50-year mining license by Mexico (extendable for another 50 years at ExO’s option) for the deposit that lies 25-40 km offshore in Baja California Sur. The company spent more than three years preparing an environmentally sustainable development plan with the assistance of experts in marine dredging and leading environmental scientists from around the world. Key features of the environmental plan included:

  • No chemicals would be used in the dredging process or released into the sea
  • A specialized return down pipe that exceeds international best practices to manage the return of dredged sands close to the seabed, limiting plume or impact to the water column and marine ecosystem (including primary production)
  • The seabed would be restored after dredging in such a way as to promote rapid regeneration of seabed organisms in dredged areas
  • Ecotoxicology tests demonstrated that the dredging and return of sediment to the seabed would not have toxic effects on organisms
  • Sound propagation studies concluded that noise levels generated during dredging would be similar to whale-watching vessels, merchant ships and fisherman’s ships that already regularly transit this area, proving the system is not a threat to marine mammals
  • Dredging limited to less than one square kilometer each year, which means the project would operate in only a tiny proportion of the concession area each year
  • Proven turtle protection measures were incorporated even though the deposit and the dredging activity are much deeper and colder than where turtles feed and live, making material harm to the species unfeasible
  • There will be no material impact on local fisheries as fishermen have historically avoided the water column directly above the deposit due to the naturally low occurrence of fish there
  • The project would not be visible from the shoreline and would not impact tourism or coastal activities
  • Precautionary mitigation measures were incorporated into the development plan in line with best-practice global operational standards
  • The technology proposed to recover the phosphate sands has been safely used in Mexican waters for over 20 years on more than 200 projects by ExO’s operating partner, illustrating the hypocrisy of the denial of the environmental permit for the project, especially when one considers that Mexico approved much higher impact dredging projects in areas that its own environmental agency deemed “environmentally sensitive areas” during this same time period.
Notwithstanding the factors stated above, the Mexican Ministry of the Environment and Natural Resources (SEMARNAT) unlawfully rejected the permission to move forward with the project, even after the Federal Court of Administrative Justice (TFJA) unanimously ruled that this rejection was unlawful and ordered SEMARNAT to re-take its decision in 2018. To date, SEMARNAT has not been able to present any proof that supports a legal basis for rejecting this project, and its actions have deprived the Mexican people from realizing the tremendous societal and economic benefits this project would deliver. ExO is once again challenging the unlawful decision of the Peña Nieto administration before the TFJA. The case is being heard before the same tribunal that previously ruled that Mexico acted unlawfully in their rejection of the environmental approval of the ExO Phosphate Project. In addition, Mexico is facing an arbitration before an international tribunal for breaching the investment protection provisions under NAFTA. ExO is seeking compensation of over $2 billion on the basis that SEMARNAT’s wrongful repeated denial of authorization has destroyed the value of its investment in the country and is in violation of the following provisions of NAFTA:
  • Article 1102. National Treatment.
  • Article 1105. Minimum Standard of Treatment; and
  • Article 1110. Expropriation and compensation.

The First Memorial in the NAFTA case was filed in September. It is supported by documentary evidence and 20 expert reports and witness statements.  In summary, this evidence includes:

  • MERITS:  Testimony from independent environmental experts that the environmental impact of ExO’s phosphate project is minimal and readily mitigated by the mitigation measures proposed by ExO.  Witnesses also testified that Mexico’s denial of environmental approval by the prior administration was politically motivated and not justified on environmental grounds, and that Mexico granted environmental permits to similar dredging projects in areas that are considered more environmentally sensitive than ExO’s project location.
  • RESOURCE:  An independent certified marine geologist testified as to the size and character of the resource.
  • OPERATIONAL VIABILITY:  Engineering experts testified that the project uses established dredging and processing technology, and the project’s anticipated CAPEX and OPEX was reasonable.
  • VALUE:  A Phosphate market analyst testified that the project’s projected CAPEX and OPEX would make the project one of the lowest cost phosphate rock resources in the world, and damages experts testified the project would be commercially viable and profitable.

This NAFTA arbitration is being administered by the International Centre for Settlement of Investment Disputes (ICSID) and it is expected that a redacted version of the First Memorial will be available to the public shortly. Once the Memorial is made available by ICSID, Odyssey will provide a link to the filing on its website, www.odysseymarine.com.

The NAFTA hearing is scheduled to take place in January 2022 unless settled earlier by the parties.

Increasing Portfolio Value

Odyssey increases the value of its mineral portfolio in multiple ways: adding new projects to the portfolio through development or acquisition, gaining or increasing equity ownership in mineral projects through investment or a leveraged contracting model, and by de-risking projects and moving them up the value curve toward full operating production.

During 2020, in addition to the ExO phosphate project, Odyssey worked on further developing the value of two highly prospective subsea mineral projects, CIC and Lihir Subsea Gold. The company is also actively developing new projects through its proprietary Global Prospectivity Program, with the goal of identifying new, highly valuable and societally significant subsea resources.

CIC: Odyssey is a member of the CIC Consortium, which is seeking an exploration license in an island nation’s Exclusive Economic Zone. The CIC Consortium was founded and is led by Odyssey co-founder and former CEO, Greg Stemm, and includes Royal Boskalis Westminster NV and Odyssey Marine Exploration.

Through a wholly owned subsidiary, Odyssey Marine Minerals, Odyssey has already acquired 15 million shares (representing approximately 12% of current outstanding shares of this project) through the provision of services related to resource assessment, project planning, research and project management, and Odyssey has an option to acquire an additional 5 million shares.

Lihir Subsea Gold: The project’s license area is adjacent to Lihir Island in Papua New Guinea where one of the world’s largest known terrestrial gold deposits is currently being mined and processed by Newcrest Mining. The license area includes at least five prospective exploration targets in two different mineralization types: seamount-related epithermal and modern placer gold. Odyssey owns approximately 80% of the Bismarck Mining Corporation, Ltd, the Papua New Guinea company that holds the exploration license.

While the COVID-19 pandemic delayed plans for additional offshore exploration work in 2020, presentations to the public were made in December 2020 in compliance with and in support of the regulatory process in PNG. Upon renewal of the exploration license, work will begin with the goal of conducting offshore validation work in 2021. “We are extremely excited to complete the exploration program to verify and quantify the mineralization of this potentially valuable resource and to fully understand the environmental setting in which it lies. We were on the cusp of executing this program in 2020 when the pandemic hit, making marine operations impossible to execute. The renewal will allow us to execute the same exploration program that was approved in the last license period,” said John Longley, President & COO of Odyssey.

About Odyssey Marine Exploration Odyssey Marine Exploration, Inc. (Nasdaq:OMEX) is engaged in deep-ocean exploration using innovative methods and state-of-the-art technology to provide access to critical resources worldwide. Our core focus is the discovery, development and extraction of deep-ocean minerals. Odyssey also provides marine services for private clients and governments. For additional details, please visit www.odysseymarine.com.

Forward Looking Information Odyssey Marine Exploration believes the information set forth in this Press Release may include "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934. Certain factors that could cause results to differ materially from those projected in the forward-looking statements are set forth in "Risk Factors" in Part I, Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2019, which was filed with the Securities and Exchange Commission on March 30, 2020. The financial and operating projections as well as estimates of mining assets are based solely on the assumptions developed by Odyssey that it believes are reasonable based upon information available to Odyssey as of the date of this release. All projections and estimates are subject to material uncertainties and should not be viewed as a prediction or an assurance of actual future performance. The validity and accuracy of Odyssey's projections will depend upon unpredictable future events, many of which are beyond Odyssey's control and, accordingly, no assurance can be given that Odyssey's assumptions will prove true or that its projected results will be achieved.

Cautionary Note to U.S. Investors The U.S. Securities and Exchange Commission (SEC) permits mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. We use certain terms in this press release, such as "measured", "indicated," "inferred" and "resources," which the SEC guidelines strictly prohibit us from including in our filings with the SEC. "Inferred mineral resources" have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. U.S. investors are cautioned not to assume that part or all of the inferred mineral resource exists, or is economically or legally mineable, and are urged to consider closely the disclosures in our Form 10-K which may be secured from us or from the SEC's website at http://www.sec.gov/edgar.shtml.

Commercial

Omni Bridgeway’s Exceptional 200+% Return

Could anyone have predicted these insane Omni Bridgeway returns? Omni Bridgeway isn’t making a profit currently. For the previous five years, revenue has trended downward at a rate of more than 30% per year. Simply Wall St explains that revenue growth is expected when companies aren’t making a profit, but that hasn’t been the case here. Yet the share price has risen at a rate of around 25% per year over the last five years. Unexpected? For sure. Throughout 2020, insiders at Omni Bridgeway have been making significant purchases. Most analysts take that as a positive sign. Still, this doesn’t necessarily translate to high shareholder earnings. Looking at the TSR (total shareholder return) is a vital part of determining potential value. This figure looks at discounted capital, spin-offs, and dividends—presuming that dividends are reinvested. From 2015-2020, the TSR at Omni Bridgeway was a whopping 234%, even better than the 25% share price return. Still, Omni Bridgeway’s investors suffered a loss of nearly 8% this year, including dividends. Long-term shareholders did better, gaining more than 25% over the last five years. Obviously, market conditions can impact share price—but litigation funding is also largely uncorrelated with the market.
Commercial

Global Class Actions—Looking Ahead

A recent panel, the Global Legal Groups Class Action Symposium, looked at US and EU collective litigation, examining trends. Of particular interest are new global class action laws and how inter-jurisdictional issues will be handled in the future. ICIG details the various issues facing Litigation Finance today. Incentive payments to representatives in a class action can be a sticking point in some instances. Modest incentives may be permissible, but some firms believe they are best avoided. The United States is also experiencing the development of a new class of negotiations which may bring the US class action process closer to what’s happening in the EU and elsewhere. In the European Union, class actions are not considered to be a traditional part of the legal world. However, the new Collective Redress Directive may change that. Influenced by Australia and the US, the EU may be moving toward a more Americanized or pan-European style of collective bargaining. The Collective Redress Directive differs from US class action law in a few major respects. First, damages can be sought as well as injunctions, and only a qualified entity can bring a claim. Litigation funding is permitted under the new law, but must be completely transparent. Disclosure requirements in general will be more stringent, and cases may be thrown out of court during the early stages. Market sophistication and a willingness to litigate in other jurisdictions has fueled the globalization of class action markets. Boundaries are being tested and test cases abound. Litigation funding increases access to justice across the board, leading to more (and often larger) cases that spur a desire for increased regulation. Trends in collective action litigation include environmental and social issues, and those related to governance. The growth of class actions on the global stage is bound to continue, which is great news for third-party litigation funding.
Announcements Commercial

International Legal Finance Association Statement On Australian Parliamentary Committee Inquiry On Litigation Funding

Today, the International Legal Finance Association (ILFA) — the global voice of the commercial legal finance industry — issued a statement in response to Australia's Parliamentary Joint Committee on Corporations and Financial Services Inquiry on Litigation Funding and the Regulation of the Class Action Industry. The Committee issued its findings and recommendations to the full Parliament today. "Australia's current balanced approach between securities law, class action procedure, and legal funding provides a model for the world, and reinforces its strong position as a destination for global investment. However, today's report attempts simultaneously to water down Australia's securities law, and to apply new regulatory burdens to class action procedures and legal funding. The Committee's recommendations would place undue burdens on shareholders seeking access to justice by driving up compliance costs and increasing the cost of capital. There is no evidence, in Australia or elsewhere, that class actions or litigation funding needs the kind of intrusive regulation proposed by the Committee. It appears that the Committee has relied on dubious claims from those opposed to these free market activities in proposing these regulations. It is, of course, for each jurisdiction to determine the rigor of its own regulatory regimes.  But jurisdictions that impose onerous barriers on the enforcement of shareholders' rights risk seeing global capital flow elsewhere, impacting the level and vitality of commercial activity. The deliberations of the Committee and its recommendations have been infected by an entirely false premise that "exploding" numbers of shareholder class actions have caused "skyrocketing" D&O insurance premiums which threaten the future of ASX companies. Misconceptions about legal finance have been deliberately advanced by a small group of vocal opponents. These falsehoods threaten to upset the balance between law, procedure, and the funding of these fundamental market activities by those pursuing justice in the legal system and undermine regulatory review processes that should be grounded in facts, not hyperbole. The legal finance community operates responsibly and within well-established best practice frameworks, including those required for ILFA membership. ILFA is committed to playing an active and constructive role to promote transparency and confidence in the marketplace by striking an appropriate balance between protecting stakeholders and fostering growth and innovation." ILFA represents the industry's interests before governmental bodies, international organizations and professional associations and serves as a clearinghouse of relevant information, research and data about the uses and applications of commercial legal finance. Details of the false premise referred to above are to be found at paragraphs 17.12 to 17.24 inclusive and paragraph 17.119 of the Report by the Joint Committee. For additional information, including ILFA's industry best practices and member obligations, please visit www.ilfa.com
Commercial

Why Litigation Funding is Catching On

Nick Rowles-Davies doesn’t mind being called an “ambulance chaser.” Maybe that’s because after chasing down an ambulance, his Sydney-based Litigation Finance firm, LCM, helps the injured parties seek justice. That’s the nature of litigation funding, and it’s working for a lot of people. LCM explains that Litigation Finance involves buying claims for ongoing cases with the hope of making money from an eventual settlement or court award. That means it’s an excellent investment for anyone looking to steer clear of traditional markets. It’s also a life-changing tool for those who have been wronged by a large company or entity and don’t have the financial means to fight back. At its core, litigation funding works to increase access to justice for everyday people. The industry itself has grown by leaps and bounds in recent years—since the last global financial crisis to be exact. Tough economic times call for creative problem solving, and Litigation Finance fits the bill. In addition to funding large cases like class actions, third-party funding can be used to fund entire portfolios of cases, diversifying risk for investors. Or it can be applied to insolvency cases, so funders can reap a portion of whatever is collected. Litigation Finance attracts more sophisticated, high-end investors like institutional investors, sovereign wealth, and hedge funds among others. Funding cases requires extensive vetting, and many funders use complex algorithms and new tech to decide which cases to back. For success in litigation investing, due diligence is essential. The industry is global, with new markets opening up to the practice regularly. Around the world, funders like Burford Capital, LCM, Omni Bridgeway, and Therium Capital are leading an industry that shows no signs of slowing. Rowles-Davies believes that the current state of Litigation Finance has only just scratched the surface of what’s possible.
Commercial

Williamtown Class Action Members Compensated

An impressive $57 million settlement was distributed among members of the Williamtown Contamination Class Action earlier this week. This comes as part of a settlement from February of last year, in a case involving PFAS contamination of homes, farms, and other businesses. Omni Bridgeway, which funded the action, explains that their involvement in the case allowed class action members to fight for what they deserved—rather than merely asking to be treated fairly. The average award per household was about $100,000, with some affected parties receiving more or less depending on the actual damage suffered. Dentons, one of the largest law firms in the world, distributed the settlement after four years of intense litigation. Reporting from the Newcastle Herald is credited with raising awareness about the case. Justice Lee called the outcome ‘excellent,’ as it seems to fairly compensate those who were harmed by the contamination and its aftermath. Omni Bridgeway points to the case as an example of Litigation Finance working exactly as it should.
Commercial

Reflections on the State of Litigation Finance

Recently, two portfolio managers at Burford Capital shared their thoughts on 2020’s 4th quarter, the continued impact of COVID, collections, and challenges in cash management. Nicholas Cooper and Patrick Wackerly explain year-end financing and more. According to Burford Capital’s own research, roughly half of in-house counsel expect a shrinking of legal budgets, and more than half have stated that they’ll be looking for discounts from outside counsel. Even in boom times, firms tend to push client collections this time of year. But this year carries unique challenges. There’s a difference between desperation and simply salvaging what there is to salvage. Client discounts, once a go-to measure, are now being eschewed in favor of more lasting solutions. Demand for financing to carry firms through the end of the fiscal year is higher than ever. This is due to several factors: --Legal financing is not a traditional loan --Clients will not be aware when firms utilize third-party legal funding --Funders, like Burford, take on the risk so firms don’t have to --Third-party funding is reliable, time-saving, and economically sound. Savvy firms and businesses alike understand that taking a little help when you need it can spare significant hardship down the road.
Litigation Finance News
Commercial Special Features

Key Takeaways from LFJs Q4 2020 Commercial Litigation Funding Roundup

On Thursday December 17th, Litigation Finance Journal hosted a special 1-hour panel discussion on the major events impacting the commercial litigation funding industry. Panelists included Omni Bridgeway CEO Andrew Saker (AS), Therium Co-Founder and CIO Neil Purslow (NP), and LCM CEO Patrick Moloney (PM). The panel was moderated by Ed Truant (ET), founder of Slingshot Capital. Below are some highlights from the discussion. ET: Why did each of you decide to pursue a global growth strategy as opposed to solely focusing on domestic markets? PM: We looked at things from a very practical perspective at LCM, we looked at where the most economic activity was happening. Where there’s more economic activity there’s more disputes. Therefore, we looked around the globe toward the larger economies than where we started back here in Australia. We were cautious and disciplined about moving into new jurisdictions. So very much driven economically and by opportunity. NP: When we started Therium about 12 years ago, we recognized the potential then that the industry would become a global industry. And from an early stage, we were seeing funding opportunities coming from other jurisdictions as well as the UK. Our global footprint reflects a view of the market that there are benefits to being bigger in funding. From a case point of view, it’s better to have more depth of financial resources. From an investor point of view, greater diversification is better. From an underwriting point of view, being able to draw on expertise across jurisdictions and to have the benefits of a global perspective is also helpful.  ET: What were some of the business challenges you faced when you entered new markets? AS: Most of our expansion was done through organic growth. It was where we perceived first-mover advantage. That required us to address a number of key risks, market awareness of the industry was perhaps first and foremost. There were some jurisdictionally specific issues in Canada where we needed to seek some insurance regulatory approvals. But otherwise, it was all about establishing boots on the ground, finding the right people which is more than half the problem. And ensuring that you’ve got access to the local contacts and networks that you need for establishing a successful business. ET: Other than lack of sleep, what are some of the other negative aspects of going global? AS: Lack of sleep is perhaps the biggest issue, but the benefits far outweigh any of the costs. Having such a global team, a global approach, different cultures that are being fully integrated, compensate for any of those downsides. But it’s an interesting dynamic market that’s continuing to grow. PM: I think that’s right. I think...there’s a necessity to become global. In the respect of at least publicly listed and traded. NP: The thing that’s interesting is, relatively speaking, how easy it is to operate across jurisdictions in this industry, and I think it’s because--to a very large extent--the skillset that you need is so transferrable. So it’s actually been very positive. ET: What’s the implication given COVID? Are you thinking differently about your organizations going forward in terms of travel and face-to-face meetings and that type of thing? AS: I think it’s an evolving thought process. Initially, at the front end of this crisis, we all saw the benefits of staying at home and working remotely and using technology to compensate. There was a great deal of enthusiasm and everyone bought in. As this has dragged on, there’s been different views about the merits of that and the efficacy of it all. To some extent, it does vary depending on your location. We’ve been very fortunate here in Australia to have a slightly different experience from our colleagues in Europe and the US.  ET: The next major topic I want to tackle was this concept of corporate social responsibility and litigation finance in environmental social governance, or ESG. CSR is becoming a pretty powerful trend in global investing, so I wanted to explore the implications for the litigation finance asset class. What are you hearing from your shareholder base about CSR and ESG in terms of their importance, and what pressures are those shareholders putting on public companies these days? PM: From LCM’s perspective, I suppose we have had two experiences. One, the public markets through the securities exchange here in Australia, and then more recently the London stock exchange, are probably two quite different experiences. So I think investors out of the UK and Europe have been far more focused and have an expectation far more than I recollect that we’ve had here in Australia, and that’s not to say that these issues are not present in Australia. It’s probably more of a timing thing, but we’re very conscious of it. What we need to wrestle with is, as a relatively small listed entity, is what capacity we have to wade into this. So we’re very conscious of it and we do have principles associated with that. AS: Definitely, it’s an increasingly important area of relevance to all our shareholders. What we have found as we’ve shifted from the ASX300 to ASX200 is that there are more ESG-specific type funds that are interested in a stock that’s compliant with ESG obligations, and as a consequence of that, we initiated our own process to have a formal ESG policy. It’s a work in progress and something that we’re developing with internal stakeholders and well as external stakeholders. It’s a value that resonates throughout the whole company. NP: ESG and CSR considerations are becoming increasingly important for privately funded investors as well. And we get quite a lot of questions from them about how we’re thinking about this. On the CSR side, the way we’re approaching it—we tend to think of litigation finance as ultimately about investing to facilitate access to justice. And for the most part, obviously, we’re doing that as an investment in the expectation of a return. But there is a wider need in society for access to justice and legal advice where those situations can’t be funded on a commercial basis. And we have felt that it’s important as an investor in the legal world that we play our part in that area too. It’s for that reason that we set up Therium Access 18 months ago. ET: Let’s move on to the third topic, industry growth, and implications for innovation. At a macro level, the industry arguably is growing in three main ways: growth in the number of jurisdictions allowing litigation finance, increasing penetration within existing markets, and then growth through product innovation. So let’s take a closer look at product innovation as a growth factor. Perhaps each of you can comment on what your business has done to innovate in the litigation finance market within the last 2-3 years.   PM: At LCM, we’ve tried to look at business development in a very different way to how the industry might have looked at this previously, so we look at the available market in two ways. One is those who use litigation finance for necessity, and those through choice, so I think the larger part of the market which remains sort of un-penetrated and unaddressed by our industry globally is providing it to large sophisticated well-capitalized corporates. And I think that’s a very interesting part of the market for us, I think it’s an interesting part of the market for the industry as a whole. I think that’s where a lot of our focus has been in the last 2-3 years. ET: Neil, how about you in terms of innovation at Therium? NP: Certainly we’ve seen a lot of innovation in the development of product. Or perhaps to put in another way, in deployment techniques. Our core business is built around an ability to assess and to price litigation risk. But the way in which that investment has been delivered and the way it’s been structured has become a lot more varied in recent years. We put a great deal of resources into developing those techniques, whether it’s portfolio funding of different types, corporate portfolios, law firm funding, or claim monetization. These aren’t new areas, we’ve been at this for a long time. But certainly, our level of sophistication in how we do them has increased dramatically in the last few years. I think also in terms of sophistication, we’re working with an AI firm called Solomonic, to bring a more data-driven approach to our investment process as well. I think that’s another theme. The last point on this: I think the market is in an interesting point now where funders are starting to drive certain parts of the litigation landscape. So instead of being passive recipients of cases from law firms, funders are now playing an important role in shaping litigation trends and what case types do and don’t develop.  AS: From a non-product perspective, I think the evolution of the fund management model is growing, it’s something that has had roots in the last five years, but is now being more warmly embraced by the litigation funders as well as PE investors.  Looking forward, as Neil mentioned, a more active role for litigation funders in the investments is something that I think will grow. We are looking to try to shift our focus from being an agent to being a principal and actually owning claims, judgments, and awards. There are various other strategies we’re looking at, including downside risk management, cracking the holy grail we all talk about of defense-side funding. And then potentially even moving into law firm ownership, to take advantage of this shift that seems to be evolving around the world.
Consumer

Involuntary Bankruptcy Petition on the Horizon in Tom Girardi Case

Creditors of the firm Girardi Keese, and Tom Girardi himself, plan to file an involuntary bankruptcy petition by the end of the week.   Law.com reports on a recent remote hearing to discuss the appointment of a trustee. Judge Thomas Durkin (Northern District of Ill) has previously frozen the assets of Girardi and his law firm, suspecting that they may have stolen settlement money from clients. Attorneys for one litigation finance firm explained that the involuntary bankruptcy petition would negate the need to appoint a trustee. California Attorney Lending has a judgment against Girardi of more than $6 million, though they remain defendants in an earlier lawsuit brought against Girardi Keese, alleging embezzlement of settlement monies owed to families impacted by the crash of Lion Air Flight 620. Judge Durkin opted not to appoint a trustee, though he did insist that the asset freeze stay. Jay Edelson is the acting co-counsel to several of Girardi’s clients. He recently expressed his concerns about the 8,000-10,000 clients Girardi represented in another class action—possibly involving a 2015 gas leak in Aliso Canyon near Los Angeles. In court, Edelson explained to the judge that his firm is concerned about the clients in question and wants them to be fairly compensated for their losses. Girardi is a prominent attorney whose wife, Erika Jayne, appears on the “Real Housewives of Beverly Hills.” The two ostensibly filed for divorce recently, though some have speculated that this is a ruse to protect or hide the couple’s assets. One lawyer, Boris Treyzon, informed a judge of Girardi’s request that he take over several Girardi Keese cases. Durkin declined this arrangement, saying he would not allow settlement or recovery to move forward without a trustee to supervise. Meanwhile, unnamed litigation funders have offered their assistance to Girardi. A judge has not precluded Girardi from receiving funds to pay for a forensic evaluation of his finances.
Commercial

Managing the Workflow of Legal Departments

There’s an economic crisis afoot, which means managing costs and workflow is more vital than ever. Instead of telling in-house legal teams to ‘do more with less’, savvy businesses are investing in their legal departments. This allows them to better manage workflow, reduce spending, and optimize the company’s bottom line. Thomson Reuters Legal details that making a case for investment at this time may fall on deaf ears. It suggests that rather than explaining why investing is a good idea—detail instead why not investing can cause significant damage. Poor workflow, for example, is often the result of a lack of prioritization or an uneven distribution of assignments. Enhanced optimization can be a key way to address this. By streamlining, employing consistent practices, using trackable management, and filing regular reports with management, the benefits reveal themselves in short order. Automation via specialty software can connect with existing software to create a new level of efficiency. When a business is reticent to make the necessary investments, third-party legal finance is an option worth considering. Funds can be used to shore up in-house legal departments without adversely impacting balance sheets. Legal funding is a versatile, effective way to keep budgets in line while continuing to make improvements and handle pending matters effectively. Beware the cries of ‘that’s how we’ve always done this,’ when advocating for investment in and updating of in-house legal departments. Innovation is the path to a better future. Corporate legal departments have changed a lot in recent years—moving from a cost-burden to a kind of hub for communication, collaboration, and information centralized for easy access. This can be enhanced by modern tech like live updating of documents for faster contract creation and negotiation, or with software that leads to greater transparency and better communication between staff, clients, and management.
Commercial

Key Takeaways from the IP Dealmakers Forum

Week two of the IP Dealmaker’s Forum included a variety of panels and events revolving around three main points of discussion. These included diligence, licensing, and venue. The forum also expounded on the importance of litigation funding in an array of IP matters. Above the Law details that litigation funding is a modernization of the traditional contingency model. In many types of patent litigation, diligence is key. Litigation funders can help with this, as their experience in varied IP-related matters will provide valuable insight. Litigation funders are well-versed in IP litigation and routinely invest in their diligence capabilities. In addition, the Litigation Finance industry is well-monied and standing by to help. It’s vital that litigants be proactive in the diligence process. This includes giving funders all the relevant information, allowing them to fully vet the risks of a specific investment. Also advised is a willingness to discuss these risks fully with their funders. These aspects of diligence benefit all involved. Firms get a no-cost opinion from experienced funders while funders are able to protect their (and their investor’s) capital from risk. Patent owners can obtain an informed and experienced analysis of their case to decide how best to proceed. Venue is also a vital consideration and another aspect that may be best discussed with litigation funders early on in the process. Some might suggest that, theoretically, it shouldn’t matter where a case is filed. But that’s simply not the reality. Licensing was the third major consideration discussed at the forum. Much IP licensing is based on potential damages from infringement. Large verdicts have become increasingly common in the IP landscape, even outside the business world with university researchers and non-practicing entities gaining huge settlements or awards. Part of the frustration with licensing stems from tech companies failing to look seriously at their licensing until a lawsuit is on the horizon.
Commercial

Did the Recent Mastercard Case Open the Floodgates?

The case of Mastercard Inc et al v Merricks has captured considerable attention. Lawyers, funders, claimants in cases that have been stayed pending this decision—and at least 46 million claimants all awaited the Supreme Court’s ruling. Omni Bridgeway explains that collective proceedings in England became opt-out in 2015 as part of a bid to find more equitable solutions. This led to worry that, as some say has happened, commercial firms might fund cases strictly for profit. That was of particular concern in this case, given the high number of claimants as well as the size of the potential award. In the Mastercard v Merricks case, claimants are made up of those who made purchases with Mastercard over the 16-year-period covered by the action. Also involved are the 800,000 or so businesses that accepted the payments. All told, the class action seeks GBP 14 billion. Merricks, the representative plaintiff, has a meritorious cause of action. Specifically, the case here follows a finding of liability as the European Commission already declared that Mastercard breached its duty when they set their fees. But how can Merricks establish everyone’s individual losses on every mundane transaction over 16 years? In truth, he doesn’t have to. Seeking an aggregate award would only require data and methodology that affirms an appropriate amount of damage. At the same time, it may seem impossible to find a methodology that is fair to everyone. The Supreme Court ultimately held that defendants should not be let off the hook because proving exact damages is a herculean task. They also affirmed that collective actions are permissible even if they’re made up of claimants who could have filed their cases individually. Some have claimed that this ruling opens the floodgates to a bevy of new collective actions. It is true that class actions may have an easier path, but that only increases access to justice for ordinary people.
Commercial

New Law Brings Litigation Finance to Cayman Islands

This past Monday, Cayman Islands Parliament passed the Private Funding of Legal Services Bill 2020. The bill provides a legal framework for conditional legal fees akin to what happens in the United Kingdom, as well as US-style contingency fees and litigation funding. Cayman Compass reports that unlike UK and US litigation finance agreements, under the new law, fees will be capped. Unless there’s a Grand Court application from the client and lawyer, success fees may not be higher than 100% more than the normal fee. Further, contingency fees cannot exceed 40% of the total recovery or award. The law is a welcome one. The attorney general stated that the new provisions are expected to level the legal playing field. Without funding options, the party with the most money is generally the winner. Ultimately, the result will be greater access to justice. That’s why the Opposition Members of Parliament supported the bill. The new law does not apply to criminal cases.
Commercial

Avalanche Blockchain Offers ILO: Initial Litigation Offering

An ILO (Initial Litigation Offering) was recently launched on the Avalanche blockchain. This is, in essence, a token that provides investors with a percentage of payouts from various funded lawsuits. The December 14th announcement detailed the perks of litigation funding as an investment. Coinspeaker reports that the ILO is a first, and is estimated to generate more than $10 billion in the cryptocurrency landscape. Kevin Sekniqi of Ava Labs, explains that this ILO is a boon to investors as well as those who seek legal redress but lack the resources. Litigation finance is uncorrelated with the larger market and therefore an attractive investment in unpredictable times. While the Avalanche ILO is the first of its kind, it’s expected to be far from the last. The first noteworthy case involves a California hemp farm that was wrongfully destroyed by the Kern County Sheriff’s Office. The farm was worth roughly $1 billion. ILO investors will now be able to invest and share in any future recovery.
Commercial

Litigation Funders Move Toward Indian Market

Litigation Finance is already booming in the United States, UK, Australia, and elsewhere. India has yet to really take advantage of the practice. But that may be about to change. Reuters explains that several top funders including Omni Bridgeway, the second-largest litigation funder, are setting up operations in India. According to Omni Bridgeway CIO Tom Glasgow, the firm is already speaking to potential clients. Glasgow didn’t reveal who, but talks about de-risking and monetization are underway. The expectation is that funders will focus on international arbitration due to the short resolution time compared to other types of cases. Once funders are well-versed in local issues, it’s likely that funding for local cases in India will follow. Also on the horizon is an Indian Association for Litigation Finance, which will include input from Marsh, Omni Bridgeway, and Phoenix Advisors among others. Like the ILFA, the group plans to advocate for the industry and create a means for self-regulation of litigation funding.
Announcements Commercial

Therium’s Financial Commitments To Access To Justice Causes Surpass £1.7m

Jersey, 15th December 2020: Therium Access, the not-for-profit arm of global litigation funder Therium Capital Management, has announced the recipients of its latest grant round. The Autumn 2020 grants have been awarded to six organisations and brings the total number of organisations receiving grants to 32 with over £1.7m committed since its inception in 2019.

The Autumn 2020 grant round remained focused on the issues exacerbated by the Covid-19 pandemic, with a focus on supporting work which is difficult to find funding for elsewhere, scalable delivery models, preservation of legal specialisation and work of strategic importance. Areas of law such as employment and housing were focussed on as these services face a huge surge in demand. Issues facing vulnerable young people were also prioritised.

As the Covid-19 pandemic continues into 2021, these organisations will continue to serve as a lifeline to the most vulnerable and marginalised in society. Additional grants have been awarded to two current grantees.

The recipients of the Therium Access Autumn 2020 grant round are:

  • Bristol Law Centre: The grant will increase capacity in employment and housing, enabling Bristol Law Centre to deliver a full service including complex advice and casework, in a wider geographical area without the limitations of Legal Aid work.
  • Child Poverty Action Group: The grant is for the continuation of funding for a solicitor in the charity’s strategic litigation team and other various costs as it continues to promote and protect the rights of children and families and maximise family incomes.
  • Legal Action Group: The grant is for a new Housing Possession Duty Desk: a practical guide. The Guide will provide a practical, accessible and affordable source of information for advisers at Housing Possession Court Duty Schemes.
  • Project for the Registration of Children as British Citizens: The grant is towards PRCBC’s core costs to support delivery of their pro bono strategic casework that ensures young people are aware of and able to exercise their rights to British citizenship.
  • South West London Law Centre: This grant will fund a Housing Court Crisis Navigator who will give practical help and support to deal with the underlying issues of people seen by their housing and debt teams in Croydon.
  • Youth Legal: The grant is for the salary and associated costs of a part-time Development worker to support Youth Legal’s vital work and to reach out to their communities, develop strong networks, and coordinate projects.

Jeunesse Mensier, Grant Programme Director at Therium Access, said: “Our Autumn 2020 grant round has again shown us the excellent and necessary work that organisations and individuals provide across the country in facilitating access to justice. We are so pleased to be supporting these six impressive and inspiring organisations which help some of the most vulnerable in our society in the areas of citizenship, employment and housing.”

Lord Falconer, Chairman of Therium Access Advisory Committee said: “During such a difficult time, legal advice has never been more important. It’s so brilliant to see Therium Access lead the way and provide much-needed financial support to such worthy organisations that provide free legal advice to strive and reduce the ever-increasing justice gap. We look forward to seeing other funders follow suit.”

Solange Valdez-Symonds, Solicitor and Director of Project for the Registration of Children as British Citizens said: “PRCBC’s core activity is assisting, including by litigation, children and young people to secure their rights to British citizenship. This grant from Therium Access is vital for our continued ability to deliver on this - and not only to directly assist more children and young people. It enables us to bring our expertise and experience to bear in challenging the several injustices in policy and practice that deprive so many more children and young people of the security and recognition that is theirs by right through registration of citizenship. Thank you Therium Access.”

Louisa McGeehan, Director of Policy at Child Poverty Action Group said: “Funding from Therium Access Fund for a further year will enable us to continue our award-winning work in ensuring low-income families have access to justice.  The need is greater than ever given the unprecedented number of families claiming universal credit as a result of the Covid-19 pandemic. renewed funding will help us in our ongoing work of ensuring that laws relating to social security entitlement are made and applied in compliance with fundamental rule of law requirements and that ordinary individuals will be able to hold the government to account when this is not the case.”

Applications for the Spring 2021 grant round will close on 15th April 2021 with priorities being confirmed in early 2021.

About Therium Access:

Therium Access is the primary expression of Therium’s corporate and social responsibility programme. Therium Access dispenses with the criteria of funding for profit and has the sole purpose of facilitating access to justice.  Therium Access is a mark of Therium’s wider commitment to the pursuit of justice and the rule of law.

Therium Access accepts applications from charities and other entities whose services and projects facilitate access to justice or from those seeking assistance to obtain legal representation on cases (including defence) which have strategic importance. The applicant’s need and the impact of the grant will be important factors in our review process. The deadline for the submission of the next round of grant applications is 15 April 2021. In addition, urgent applications may be considered on an ad hoc basis. Applications need to be made by legal representatives or the entity seeking a grant.  The board of Therium Access is assisted by an Advisory Committee which is chaired by Lord Falconer, former Lord Chancellor, Secretary of State for Constitutional Affairs and Secretary of State for Justice.

Therium Access aims to support access to justice in the broadest terms and considers applications that further the following causes (in no particular order):

  • The right to legal representation or due process;
  • The proper and efficient administration of justice;
  • The advancement of human rights;
  • The promotion of equality of rights and diversity;
  • The protection of children, the elderly, the disabled, minorities, asylum seekers and other vulnerable or disadvantaged groups;
  • The advancement of environmental protection or improvement;
  • The promotion of legal education that furthers the causes listed above; and
  • Any other case or project in which a person, group, or entity will not have access to justice without financial assistance.

Therium Access is intended to be a global initiative. Its initial focus is on the UK and it will be rolled out in other jurisdictions in a number of planned phases.

About Therium Capital Management:

Therium is a leading provider of investment capital to the legal industry and one of the largest, having raised over $1 bn since 2009.  With investment teams in the UK, USA, Australia, Germany and Norway, Therium has funded litigation and arbitration claims exceeding $40 billion including many of the largest and most high profile funded cases in the UK and internationally, including arbitrations under rules of the LCIA, ICC, UNCITRAL, LMAA, AAA, CIETAC, ICSID, Stockholm Chamber of Commerce and the Energy Charter Treaty.  Therium has been Top Ranked by Chambers and Partners and Leaders League with investment officers across the UK, Europe, USA and Asia Pac recognised as leading individuals in litigation finance.

Last year to mark the firm’s tenth anniversary, Therium Access was launched as a not-for-profit venture to fund a wide range of access to justice projects and cases – supporting the most vulnerable in our society and helping to bridge the widening justice gap. With its own board composed of eminent figures from the legal community and a dedicated grants officer, Therium Access has made over £1.7 m in financial commitments over the last 22 months to over 32 different organisations. As the first initiative of its kind, Therium has been shortlisted for several awards for launching this ground-breaking initiative, including the FT Innovative Lawyer Awards 2019, the Lexis Nexis Awards 2020 and The Lawyer Awards 2020.

Therium also invests in AI and software projects to accelerate the advancement of the industry. As a founding member of both the ALF, ILFA and the Litigation Funding Working Group, Therium is also committed to shaping the future of legal finance and setting high standards for the industry.

Commercial

IPO Wealth Class Action Targets Trustee

A class action involving IPO Wealth is proceeding in a Victoria Federal Court. The case was filed against Vasco Trustees and names associated company DH Flinders. Law firm Slater and Gordon is running the class action. Australian Financial Review details that the IPO Wealth Fund was the debut product of Mayfair 101, an upstart investment firm. Earlier this year, two other Mayfair 101 entities have also had their assets frozen. The class action currently involves more than 50 investors, including several retirees or those who invested workers comp monies. While the fund was reserved for investors with high net assets—the investors in question were largely inexperienced. The lead plaintiff, Helen Batey-Smith, put $1 million into the fund as of November 2018. She rolled it over multiple times until the investment was frozen. In the claim, some aspects of the promotional material are at issue—including eye-catching declarations of “attractive returns” and the phrase “term deposit.” This seemed, to some, deliberately intended to obfuscate or mislead investors. A memorandum on the fund released between 2017-2019 omitted the significant risk of the fund’s underlying investment. Vasco should have known (or did know) that the investments were speculative at best. Mayfair 101 insists that they have not broken any laws but nor would they comment on the accusations regarding advertising. Similar cases have been adjudicated recently in the investor’s favor. However, litigation funding firms and legal fees absorbed much of the settlements. This new class action is not utilizing litigation funding.
Consumer

‘Real Housewives’ Husband Held in Contempt Over Missing Settlement Payouts

The husband of reality TV star Erika Jayne is being held in civil contempt along with his law firm. A federal judge in a Chicago court made the decision after Thomas Girardi and the Girardi Keese law firm failed to identify the whereabouts of more than $2 million in payments for survivors and family of the Lion Air Flight 610 plane crash. Chicago Sun-Times explains that Judge Thomas Durkin froze the assets of the lawyer and his firm. He then affirmed that payment to at least four families owed half a million dollars would cure the situation. Girardi is also being sued by multiple litigation finance firms over non-payment and leaving funding contracts unfulfilled. He and his wife are accused of embezzling settlement money in order to maintain the appearance of being wealthy celebrities. The couple, ostensibly in the midst of a divorce, claims to be staring at ever-growing debt. It’s been alleged that the couple misdirected large amounts of money from both funders and clients for their own personal use. Jayne herself describes the case as “high drama.”
Commercial

Canterbury Class Action Against Southern Response Launches

Policyholders with Southern Response got a rare bit of good news as their class action against the insurer was launched. New Zealand’s top litigation funder, LPF, will provide financial support for the action. Those homeowners who were insured by Southern Response and made a claim after their home was damaged in the earthquake are eligible for inclusion—if their settlement was lower than it should have been. Scoop reports that roughly 3,000 homeowners were allegedly shorted by the insurer in settlements related to the Canterbury earthquakes. This new class action is an alternative to an earlier claim—run by GCA lawyers and funded by Claims Funding Australia. A recent opt-out ruling could lead to claimants becoming part of the GCA lawyers class action, which carries high fees. This new class action carries no success fees and is free to sign onto. Funders will receive a max payout of 15% of the award if the case is successful. If the case is resolved successfully within two years, and costs are under $2 million, LPF Group will get 10% of the settlement. If it takes longer though or costs more, the 15% return will come into play.
Commercial

Mastercard Case Moves Forward as UK Inches Toward US-Style Class Actions

Litigation Finance received a holiday gift in the form of a new UK Supreme Court decision allowing a GBP 14 billion case to proceed against credit giant Mastercard. The claim, which could involve over 46 million claimants, alleges that the credit card group charged excessively high fees and overcharged customers regularly. Proactive Investors explains that the ruling opens the door to a bevy of new collective claims. A similar claim was filed last year against five big banks alleging price manipulation. Many have presumed that litigation funders are salivating at this news. Neil Purslow, CIO of Therium Capital, has stated that Therium will be making investments in these types of cases as a result of this ruling.
Commercial

Arbitration Against Tanzanian Government Begins

Indiana Resources, an ASX-listed gold mining company in Australia, is proceeding with its case against the Government of Tanzania. The case involves the alleged illegal expropriation of a nickel mining project. The action is led by two incorporated UK companies: Ntaka Nickel Holdings, and Nachingwea UK. Mining Review explains that the case, which is funded by Litigation Capital Management, is expected to convene in the first quarter of next year. An arbitral tribunal will be appointed, followed by filing the claimant’s evidence and supporting documents. Original estimates of losses are close to $1 billion. The government of Tanzania has allegedly been reticent to participate in every step of the process. Plaintiffs claim they refused to come to the negotiation table when claimants invited them to negotiate in good faith, and that they refused to engage concerning the formation of the tribunal. Bronwyn Barnes, executive chair at Indiana Resources has stated that she is pleased to see such progress in recent months. She goes on to affirm that there is adequate litigation funding in place and that the memorial is well underway. According to Barnes, $95 million is the minimum claim for expected compensation.
Commercial

Litigation Funding Ethics in the US

The Third Annual Ethics Summit from Frankfurt Kurnit was held last month. The litigation funding panel covered a host of ethical and legal points of interest. These include coverage of the back-and-forth between the industry and the NYC Bar Association, and the ever-evolving rules of professional ethics. MONDAQ begins with an overview of the practice of Litigation Finance, including the non-recourse nature of funding and how it differs from traditional loans. This detailed the many advantages of litigation funding, including helping average citizens see their day in court without financial barriers. It also affirmed the risks—such as pushing the boundaries of attorney-client privilege, or funders attempting to make decisions about the cases they fund. The NYC Bar Association turned heads in 2018 when they asserted that Rule 5.4a disallows fee-sharing with non-lawyers—and therefore renders litigation finance prohibited. This stance has been debated, sometimes vehemently, by legal professionals. However, the opinion is not law, and litigation funding agreements have not changed because of it. The question of disclosure remains in flux. How much should a lawyer tell a potential funder? What should they be obligated to reveal? This is especially relevant in single-case funding. It only makes sense that funders want details to properly vet cases they fund, but the question of what they’re legally entitled to know remains up in the air.   When states refine professional ethics and rules regarding litigation funding, they help ordinary citizens gain access to the justice system. While questions about disclosure and privilege remain, it cannot be denied that anyone who has been wronged deserves their day in court. Further, it should not be denied that litigation funding is the most effective way to secure the rights of citizens to pursue a case even when they lack the financial resources to do so.
Commercial

Insights into Funding International Collective Proceedings

The first day of the Global Class Actions Symposium brought with it new considerations for claims filed in the US and EU. In the United States, champerty is still an issue, as nearly half of all states do not allow the practice of Litigation Finance. Some have even said that regulatory trends are moving in two directions at once—with some seeking to restrict or heavily regulate the use of litigation funding, and others laying the groundwork for its mainstream acceptance. ISLG explains that regulatory developments are often focused on changes within the industry, and mitigating their impact. In the last few years, litigation funding has shifted from funding single large cases, often class actions, to portfolio funding. This reduces risk for funders while helping legal firms manage budgets. Some have suggested that this funder-friendly approach is incongruous with the foundational concept of Litigation Finance—increasing access to justice. Disclosure is an ongoing sticking point in litigation funding, as is the fear that funders will hold sway over decision-making in the cases they fund. This, despite existing law typically requiring that funders not control any aspect of the case. In the EU, class action cases are called ‘collective redress’. The EU is expected to strengthen the laws that impact such actions. Typically, the use of litigation funding must be disclosed to the courts, regardless of which side is utilizing it. Meanwhile in Germany, Litigation Finance has been legal since 1999, but it has never gained the popularity it has elsewhere. Day one of the symposium concluded with Melissa Ferrari, president of Verein Global Justice Network, who affirmed the importance of funders not controlling any aspect of a funded case.
Commercial

Eni Will Issue Subpoenas on Nigerian Litigation Funding Arrangements

Eni, the Italian energy company, was recently given court approval to subpoena companies accused of taking part in the Nigeria OPL 245 scandal. This is expected to include asset recovery companies as well as litigation funders. Previously, Eni suggested that the government had taken action under pressure from third parties who are hoping to profit illegally. Premium Times reports that there are seven companies involved, including Poplar Falls LLC, and six Drumcliffe Partners entities, based in Delaware USA. The subpoenas are not expected to require the release of privileged documents. The evidence sought by Eni was largely unattainable by any other method, which is why court assistance was necessary. Eni insists that their request was not intended to circumvent existing restrictions or policies on gathering evidence. In fact, the discovery sought by Eni is narrow and non-intrusive. The scandal itself involves the former oil minister of Nigeria, Dan Etete. Etete is accused of controlling accounts that received more than a billion dollars from Eni and Shell—both multinational oil giants. From those accounts, over $500 million was transferred to accounts controlled by Etete, and Abubakar Aliyu—the owner of AA oil. This 2011 transaction was authorized through several ministers of the Nigerian cabinet, ostensibly as payment for OPL 245—one of the richest oil blocks in Nigeria. Initially, both Eni and Shell stated that they were unaware that the money would go to Etete and his associates. Evidence showing that claim to be false was eventually revealed—as Shell eventually affirmed. Currently, Etete, Shell, Eni, and several oil company officials are being prosecuted in Italy for their alleged roles in this scandal. The deadline to comply with subpoenas will be 30 days from the date it is served.
Commercial

New Scholarship for ASU Law Students Announced by Pravati Capital

Scottsdale, Arizona’s leading litigation finance and consulting firm has established a scholarship in support of gifted students. The scholarship will go to exceptional students attending Sandra Day O’Connor College of Law at Arizona State University. ASU reveals that the Pravati Capital Endowed Scholarship is part of the Dean’s Circle for donors, in support of law students looking for mentorship and networking opportunities. It also provides financial support to gifted students, including those attending ASU on campuses in LA, Washington DC, and downtown Phoenix. Dean of Law at ASU, Douglas Sylvester, stated that they are grateful for such a generous donation and that the money will be used to continue to provide a first-rate law school experience for students. Pravati Capital provides litigation funding to firms on a non-recourse basis.
Commercial

Therium Capital: Identifying Claims

 In an insolvency situation, a company and its legal department will have to structure an affirmative recovery program. After that comes building a framework to identify claims they’ll pursue. In this process, understanding potential claims and being aware that an affirmative recovery program is underway are both critical. That’s why keeping everyone in the loop is essential. Therium Capital explains that how effective an affirmative recovery program is will depend largely on how well the company understands available claims. In-house legal teams can be instrumental in bringing in new claims proactively. Potential recoveries can arise from a variety of opportunities including insurance claims, IP usage, and commercial contracts. It’s vital that business units and legal teams all understand which claims are worth pursuing. Ultimately though, general counsel will make the final determinations. Any employee can serve as the eyes and ears of the legal department if they’re properly trained and motivated to do so. Relationship building, education, corporate culture, and employee incentive programs can all play a part in a successful affirmative recovery program.
Commercial

Temur Akhmedov Reportedly Lost $50 Million in High-Risk Trades

Infighting among members of the Akhmedov family continues, as divorcee Tatiana Akhmedova continues to accuse her son of hiding assets. Temur Akhmedov, London oil trader and son of Farkhad Akhmedov, denies that he hid money from his mother. City AM reports that the younger Akhmedov recently stated that while he was studying at the London School of Economics, he engaged in several risky trades. He claims to have ultimately lost more than $50 million. This was revealed during a London court case over the disbursement of a 2016 divorce settlement. Burford Capital is funding Akhmedova’s case.
Litigation Finance News
Announcements Commercial Special Features

LFJ to Host Special Digital Conference on Commercial Litigation Funding

2020 was a pivotal year for commercial litigation funding, and the industry approaches 2021 on the cusp of massive growth. Litigation Finance Journal is hosting a special digital conference which will cover the most impactful stories of the past year, and offer insights into what next year will bring. This special one-hour panel discussion and Q&A will explore the major events of the past 12 months, including the Omni/IMF merger, the founding of the ILFA, industry innovation (corporate portfolio funding and financing M&A transactions) and more. Our panel of industry experts will also offer their views on what's in store for 2021 and beyond.

Moderator

Ed Truant Founder Slingshot Capital

Panelists

Andrew Saker CEO Omni Bridgeway

  Neil Purslow Co-Founder Therium Capital Management

   Nick Rowles-Davies Executive Vice Chairman LCM

The event will be held on Thursday, December 17th at 5pm ET. It will be audio-only, and comprise a 45-min panel discussion, followed by a 15-min Q&A with attendees. Tickets can be found here. Anyone who purchases a ticket will receive a recording of the event; it is not necessary to attend to receive the recording.  Questions? Write to: jfreund@litigationfinancejournal.com Hope you enjoy the event! - The LFJ Team
Commercial

Mara Abols Joins Omni Bridgeway as Corporate Counsel in Toronto

The Omni Bridgeway Toronto team grows larger with the addition of Mara Abols. She’ll be serving as a member of the Legal, Risk, and Compliance team, which handles global legal issues. Omni Bridgeway details that Abols will negotiate, advise, and draft litigation funding agreements as well as focus on corporate legal issues. Abols is an excellent fit for a company that has grown in size and number of deals in recent years. Abols is a bar member in Ontario and New York, and graduated with distinction from McGill University. She was also part of an International Exchange with the University of Copenhagen.