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Commercial

International Arbitration Opportunities Through Litigation Finance

Multinational companies are choosing international arbitration to settle disputes in greater numbers than ever. For those who make this choice, Litigation Finance can take the financial stress out of the ordeal. Third-party legal funding can be used commercially and internationally. Omni Bridgeway details that in 2019, there were 869 new arbitration cases, according to stats from the International Chamber of Commerce. Over 1/3 of new cases were valued at more than $10 million. Moreover, of the 10 most-commonly chosen venues for international arbitration—half were located outside Europe or North America. Firms and companies involved in international arbitration can certainly benefit from litigation funding. When arbitration is the chosen path for an international dispute in cases like treaties, or a business bringing a claim against a government—funding can lighten the financial load significantly. Funding may also mitigate the longer case lengths and lower settlements that can occur. Now more than ever, international entities are looking for funding for a broad portfolio of cases. This presents opportunities for businesses to better manage finances while reducing the overall risk for funders. If one plans to make use of Litigation Finance, it’s important to understand the criteria by which funders select cases. Criteria include the probability of success as the main factor, followed by the potential expenditure versus the amount of a potential award. Experienced funders will have their own metrics or algorithms to determine this. Also considered are the success rate of the legal team involved, the jurisdiction, the potential time-frame of the case, and the probability of collecting an award or settlement. If there’s a tribunal, its efficacy will factor in as well. Enforceability is an ongoing concern for international cases—so funders with global enforcement experience are particularly desirable. All of these factors can impact the funder’s bottom line—which is particularly important given the non-recourse nature of litigation funding.
Commercial

Innovation and Litigation Finance—A Winning Combination

Current economic conditions are making it more challenging to run a business regardless of industry. In the legal world, budgets are shrinking and GCs, already stretched to the brink, are taking on even more costs. An ability to adapt to circumstances while finding ways to save money is of the essence. Burford Capital explains that when money is tight, the last thing firms want to do is take risks. At the same time, the need for innovation is greater than ever. The solution? Legal Finance. Innovation in the legal world is nothing new. But now, increased efficiency and time-saving techniques aren’t just desirable—they’re mandatory. Clients and customers require digital signatures, electronic billing and payments, secure virtual meeting spaces, and protected file transfers that maintain the privacy of clients and firms. A 2019 Legal Finance Report shows that more than 70% of in-house counsel chose not to pursue meritorious cases because they didn’t want to take the financial risk. Not only that, over 60% of in-house lawyers are failing to collect judgments or awards to the tune of tens of millions. In these instances, Litigation Finance can make all the difference.
Announcements Consumer

Law Finance Group Offers Answer to Challenging Question Law Firms Now Face: “When Will We Get Paid?”

August 27, 2020—It’s a question many are now confronting, and it has nothing to do with the law: “When will we get paid?”

As the pandemic and other macro factors continue to impact the economy, law firms’ efforts to collect from their clients present a real challenge. On one hand, firms need steady revenue to meet their operating expenses and other obligations; on the other, they need to put client interests first. With clients facing their own financial stresses, lawyers must show extreme sensitivity to their clients’ challenges, arguably before their own. Law Finance Group, a leading litigation financier and provider of capital to law firms for more than 25 years, has recognized this dilemma and stepped in with a solution—AR Now: Accounts Receivable Financing.

A first-of-its-kind product, AR Now will:

  • Immediately advance 50% of a client’s outstanding bill.
  • Allow law firms to maintain the billing relationship with the client, while Law Finance Group stays in the background.
  • Offer facilities up to $20 million or more, giving law firms peace of mind to focus on their work.
  • Avoid personal guarantees that law firm lenders typically require.

When clients pay their invoices within six months, law firms keep 93% of the amount billed. When invoices are paid within a year, law firms keep 88%. The full program terms allow law firms to give clients up to 18 months to pay outstanding bills.

“You don’t need to read about furloughs and cost-cutting to know that firms and their clients are under great stress right now,” said Dan Bush, Law Finance Group’s chief investment officer. “We’re happy to offer a product that relieves a lot of that stress on law firms, while also benefitting their clients.”

AR Now also holds the promise of relieving any tension that may exist between law firm partners and management and provides a strategy to navigating this reality together. Often, compensation plans incentivize partners to offer overly generous discounts that get funds in the door, but work against the broader firm goal of maximizing revenue. AR Now aligns the interests of partners and management, while offering attractive advantages to both groups.

Partner benefits: Partners can offer clients extended payment terms, further establishing themselves as valuable problem solvers in a time of crisis. For them, AR Now also allows the firm to book revenue that could contribute to partner distributions.

Management benefits: AR Now gives chief financial officers, chief operating officers, pricing professionals, and client services managers immediate capital without having to offer clients substantial new discounts or tapping their lines of credit.

“Our AR Now product has other applications for law firms and their clients—for instance, facilitating new alternative fee arrangements,” Bush said. “Ultimately, we’re here to help both firms and their clients get through this challenging moment, and, as always, are willing to get creative to get that done.”

For detailed terms and more information about AR Now, click here.

About Law Finance Group

For more than 25 years, Law Finance Group has been a leader in the litigation and law firm finance industry. We have provided over half a billion dollars in financing for individual lawsuits and litigation portfolios to parties and their law firms. Our innovative financing solutions are based on our deep understanding of the civil justice system and the realities of the modern law firm business model. Law Finance Group maintains offices in San Francisco, New York, and Austin.

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Commercial

Qui Tam Relators Compelled to Disclose Litigation Funding

The FCA or ‘False Claims Act’ has secured more than $3 billion in settlements or judgments in civil cases in the 2019 fiscal year alone. Much of that relates to healthcare claims, and nearly two-thirds involve relators—which is another term for whistleblowers. This is not surprising, given the widespread application of Qui Tam provisions that offer a portion of an award to whistleblowers who assist the prosecution with cases under the FCA. JD Supra explains that rampant fraud in government programs combined with the money to be made under a writ of qui tam means this type of litigation is increasingly popular. Litigation Finance is now entering the fray of FCA cases, though there are no definitive numbers on how much litigation funders have invested in FCA suits. While increased regulation has not yet been called for, the DOJ does appear to have concerns over third-party funding in qui tam cases. With that in mind, the DOJ now requires all qui tam relators to reveal any agreements they may have with third-party funders. Many think this move toward transparency might signal the end of funding in qui tam FCA cases—and that in turn, this will decrease the number of whistleblowers coming forward. The DOJ initially expressed concern regarding FCA cases when the relator is involved in litigating on behalf of their government. At a January 2020 speech, former Deputy Associate AG Stephen Cox explained that the DOJ was looking into whether or not disclosure in such cases was appropriate. Now, a series of questions will be asked of all FCA relators: --Is there an agreement with a third-party funder? --Who is the funder? --What information has been shared with the funder? --What is the nature of the written agreement with the funder? --Does the agreement give the funder control over decision making (this is generally prohibited in all cases)?
Commercial

Does Litigation Funding Turn David into Goliath?

At what point might a David become a Goliath? Some would say that Litigation Finance is the catalyst for such a transformation. Take the case of Akiane Kramarik and the famed portrait of Jesus she painted at age nine. Over the years, she’s been the subject of television appearances, media events, and even a big-budget film. But as she grew up, missing royalty payments and other shady dealings began to emerge. Bloomberg Law explains that the artist recently acquired funding from Legalist, a third-party funder, in order to sue former business partner Carol Corneliuson and her business, Art & SoulWorks. For most people of modest means, Litigation Finance provides a way for those who can’t afford legal representation to have their day in court. Kramarik and her family claim that they need help from funders to finance their case. But Corneliuson claims that the Kramarik’s can now use the funds to make outrageous demands—though there’s no evidence that they have done so. In January 2019, the Kramarik family terminated their relationship with Corneliuson. After a short disagreement about selling existing merchandise, Kramarik’s father decided to look deeper. That’s when he learned that Art & SoulWorks had not paid full royalty payments, and allegedly sold low-quality reprints to counterfeit markets. Referencing items she had already purchased for sale that were now ostensibly worthless—Corneliuson filed a countersuit. Eva Shang of Legalist has stated that Ms. Kramarik is exactly the kind of client who can benefit from litigation funding. The case itself does not appear to be near a settlement. Indeed, Corneliuson’s attorney has said that her client would be unable to afford the proposed settlement of $2 million. A partner at the firm representing the Kramarik’s has said that the firm isn’t pursuing the case any differently than he would have, had no funding been secured.
Announcements Commercial

Significant Legal Win for “David” Canadian Corp in London Court

Global Energy Horizons Corp (GEHC) an alternative energy corporation headquartered in Victoria, British Columbia, Canada has won a significant Judgment against The Winros Partnership (formerly Rosenblatt Solicitors) a City of London based law firm. GEHC’s claims are related to the legality and enforceability of three Conditional Fee Agreements (CFAs) alongside several misconduct allegations against Rosenblatt. A CFA  is a contingency agreement between a law firm and its client whereby the law firm assumes the costs of pursuing a litigation for a reward that could amount to 100% of its customary fee. The case considered GEHC’s claim that all three CFAs entered into with Rosenblatt were unenforceable, and in any event wrongly terminated, and as such Rosenblatt wrongly claimed costs, despite the existence of an unenforceable ‘no-win, no-fee’ CFA. The case also considered numerous allegations of impropriety, including Rosenblatt misrepresenting to its client that monies were owed. The Judgment, handed down on Thursday August 20, 2020, found for GEHC in all its claims. Master James, the presiding justice, noted that Rosenblatt “left GEHC’s best interests in their rear-view mirror” and “favoured its own interests over its client’s.” The Judgment found that Rosenblatt had misrepresented the following to GEHC and/or the court:
    • that one of the CFAs had come to an end, before wrongly and unclearly invoicing the claimant for monies allegedly owed
    • a win had been achieved under a later CFA resulting in additional fee requirements of £7 million
    • GEHC had agreed to gift Rosenblatt in excess of £2 million, including £460,000 in irrecoverable success fees which Rosenblatt maintained they had explained to GEHC that there was no contractual entitlement
    • further, Rosenblatt failed to keep records of the alleged advice or the alleged agreement
The conduct of the matter was punctuated by poor or non-existent written communications, on which Master James remarked: “This is one of a number of occasions upon which a very important event, involving a large sum of money, has allegedly happened but in respect of which there is no paper trail to verify it, in spite of the fact that Rosenblatt is a commercial law firm and well-versed in the importance of reducing important agreements to writing.” GEHC was represented by a London-based team of the firm Eversheds Sutherland and Ben Williams QC of 4 New Square, London. The Eversheds Sutherland team was led by Partners David Flack and Mark Cooper, and Head of Costs Glenn Newberry. The Winros Partnership were represented by Rosenblatt Solicitors and Andrew Post QC of Hailsham Chambers, and Adam Zellick QC of Fountain Court, all of London, UK. Glenn Newberry, Head of Costs and Litigation Funding at Eversheds Sutherland commented: “We’re delighted the Judgment found for GEHC on all counts. This is a significant case, being one of the first to find a post 2005 CFA to be unenforceable following the abolition of the 2000 CFA Regulations in 2005, as well as tackling what became an ever-growing number of incidences of misconduct. The team faced numerous challenges during proceedings, including a lack of documentary evidence, nor correspondence nor file notes of conversations of the advice which Rosenblatt purported to have provided to GEHC in respect of the unusual and complex fee agreements.” Brian de Clare, President of GEHC commented: “GEHC engaged Eversheds in 2016 to investigate our rights following the unauthorized removal of funds from our Client account at Rosenblatt. That was a shocking situation for us to have been put in, especially where we had placed great trust in Rosenblatt from the very beginning. For Eversheds to have uncovered even further grave irregularities in our fundamental contractual relationship with Rosenblatt (the CFAs) made us realise the trust we placed in Rosenblatt actually exposed us to being taken advantage of by them. We are extremely grateful to the Eversheds Sutherland team and Ben Williams QC for their expertise, hard work and perseverance on this difficult to comprehend matter which unearthed a catalogue of misconduct incidents stretching back a number of years.” The case was heard in the Senior Courts Cost Office in London. The hearing lasted 10 days in 2018, including eight days of live evidence. The defendant has sought permission to appeal. Rosenblatt Solicitors were hired in 2009 to litigate GEHC’s case against Robert Gresham Gray in London for breach of fiduciary duty in 2006 by removing GEHC’s opportunity to participate in an innovative and patented technology/process, tested and utilized in the U.S. and around the world, for increasing oil & gas recovery, and the associated benefits derived therefrom. Eversheds Sutherland also represent Global Energy Horizons in the ongoing litigation against Gray, who was found guilty by Lord Justice Vos in 2012 for breach of fiduciary responsibility.
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Announcements Consumer

Legal-Bay Pre-Settlement Funding Announces Expansion of Car Accident and Personal Injury Departments Due to Rising Amount of Cases

WEST CALDWELL, N.J., Aug. 24, 2020 /PRNewswire/ -- Legal-Bay, the premier Pre Settlement Funding Company, announced today that they have expanded their car accident and personal injury departments due to the influx of new filings during the first half of 2020. Legal-Bay is one of the leading lawsuit loan companies in the industry, and offers a very fast approval process. Even with fewer people leaving home due to the COVID pandemic, Legal-Bay is seeing more car accident and personal injury claims than ever before. Because of this, court rulings are taking longer than usual. An exorbitant amount of time may pass before plaintiffs receive their settlement money. Legal-Bay is once again reaffirming their dedication to arrange loans on settlement claims for their clients, essentially a cash advance against a pending settlement. To apply now, please go to the company's website HERE or call toll-free at: 877.571.0405 where experienced agents are standing by. Chris Janish, CEO, commented on the company's readiness, "Unfortunately, we are seeing a bevy of personal injury lawsuits backlogging the courts as cases come in quicker than they are settling. Insurance companies are using the slowed process to lowball plaintiffs into taking less-than-expected settlement values. Legal-Bay remains committed to our clients that need a loan settlement now, rather than having to wait out the endless days for their case to resolve at trial." If you have an active lawsuit and need a loan on lawsuit, Legal-Bay may be able to assist you immediately. To apply online, please visit us HERE or call the company's toll-free hotline at 877.571.0405.    Plaintiffs in personal injury lawsuits including car, truck, and boat accidents, medical malpractice, and premise liability cases are filing at a rate previously not seen before. Legal-Bay can speak with you about loans for settlements and get you the cash you have coming to you… without having to wait. Legal-Bay's non-recourse pre-settlement funding programs are also known as lawsuit loans, law suit loans, loans for lawsuit, loans for lawsuits, or settlement loans. The cash advance settlement loan is risk-free, as the money does not need to be repaid should the recipient lose their case.
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Announcements

Defrauded Investor Scores Victory in Qatari Court Saga

DOHA, Qatar, Aug. 24, 2020 /PRNewswire/ -- The Swifthold Foundation, which was defrauded by Sheikh Fahad bin Ahmad bin Mohamed bin Thani Al Thani, a member of the Qatari Royal Family, and his Qatari company, Fast Trading Group, has been patiently waiting for the Qatari Enforcement Court to enforce Swifthold's $6 billion U.K. High Court Judgment since the Qatari Trial Court issued a Writ of Execution to formally recognize the Judgment in Qatar in the Summer of 2019. In February 2020, the defendants filed an appeal with the Enforcement Court to seek a stay of the enforcement proceedings and to declare the enforcement proceedings invalid.  In addition, he filed an appeal of the underlying recognition of the U.K. High Court Judgment with the Court of Appeal in Qatar. On August 18, 2020, the Enforcement Court dismissed the defendants' appeal and now the enforcement of the U.K. High Court Judgment can continue unabated.  According to Delta Capital Partners, the American litigation finance and support firm that the foundation has retained, this should be one of the last remaining hurdles to overcome before Swifthold can expect to collect significant proceeds from the defendants. Delta's CEO, Christopher DeLise, stated, "It has been a long wait to resolve this appeal due to COVID-19, but we are very pleased by the Enforcement Court's ruling and are anxious to continue enforcement of the judgment against the defendants.  The defendants' appeals were without merit and filed at the last minute solely to try to delay the inevitable and therefore we are now optimistic that the Qatari court will enforce without further delay." As of today, no hearing has been set for the Court of Appeals hearing, but Delta and Swifthold's Qatari counsel believe the outcome will ultimately be the same if the courts follow established Qatari law and procedure and continue to respect international law. Delta's CEO closed by commenting, "We are confident that the Qatari Court of Appeals will dismiss the defendants' appeal and Swifthold will finally have justice and the compensation it so rightly deserves in the very near future. "
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Commercial

Insurers Counter $185MM Case with $9MM Offer

All eyes are on a fee request from Quinn, Emanuel, Urquhart, & Sullivan. The class action, which revolved around Obamacare and insurers left unpaid after Congress neglected to pay promised subsidies, was completed in April when the US Supreme Court ruled that insurers were owed roughly $12 billion in unpaid subsidies meant to cover Americans without insurance. Bloomberg Law explains that the requested legal fee works out to about $18,000 an hour—though that’s an estimate as no timesheets were provided. Not surprisingly, several insurers thought this was absurdly high, using words like “astronomical” and “unreasonable” to describe the request. They countered the $185 million demand with an offer of $9 million. This brings up the use of the “lodestar method,” which is used to calculate legal fees. Insurers who signed on to the class action agreed to pay a maximum of 5% of any award. Despite this, insurers have said that even $20 million would be too high. Interestingly, it may be litigation funders who win big if these insurers get their way. As several insurers sold their interest in the case in exchange for any award, lower legal fees mean more money for those (as yet unnamed) funders who invested in the case.
Commercial

Litigation Finance in India; Not So Fast

India appears to be the latest country to embrace the practice of Litigation Finance—at least in theory. The Indian Prime Minister, Narendra Modi, recently spoke about foreign investment opportunities in India. One of the many types of foreign investments being encouraged is third-party litigation funding. This leaves some asking whether or not the Indian judicial system is ready for the practice. Taxscan India details that in India, much like the rest of the world, COVID has hit businesses hard. As the courts scramble to keep up with new cases, virtual hearings are becoming more commonplace. These seem like ideal conditions for litigation funding to flourish—yet India has not caught up with the rest of the developed world in taking full advantage of the opportunities lit fin presents. In addition to funding legal matters that might otherwise go abandoned, firms can use litigation funding to keep expensive cases off the balance sheet and keep funds flowing to take care of general expenses.  Currently, the Indian legal market is worth about $80 billion. Yet ongoing delays in the Indian judicial process is keeping outside investors from getting involved in litigation funding.   Technically, Litigation Finance is permitted in India per the Code of Civil Procedure—but the current state of the legal system seems tailor-made to discourage foreign investment in Indian litigation.
Announcements Commercial

Litigation Capital Management (LCM) announces its third corporate portfolio transaction

Litigation Capital Management Limited, a global provider of disputes funding, publicly listed on the London Stock Exchange’s AIM market, is pleased to announce it has executed an agreement to finance a corporate portfolio transaction to provide a significant finance facility to a subsidiary of a global building and infrastructure contractor to fund a portfolio of its construction claims. The transaction, which originated through LCM’s strategic alliance with Norton Rose Fulbright and involved members of LCM’s team from Sydney, London and a specialist team established in the UAE, includes an agreement by LCM to finance up to 20 separate claims seated in jurisdictions ranging from Dubai to London, subject to the satisfactory completion by LCM of its due diligence. LCM has achieved recent results on two of its existing corporate portfolio facilities – one for a global aviation business and the other with a building and construction company, which both delivered four resolutions each for the respective clients within the last financial year; a relatively short timeframe compared with traditional single-case projects, demonstrating LCM’s capabilities in providing sophisticated and bespoke client-focused solutions that truly meet the needs of corporate clients. Commenting on the new corporate portfolio, Patrick Moloney, Chief Executive Officer of LCM, said: “We are delighted to be announcing a further corporate portfolio transaction which originated through our strategic alliance with Norton Rose Fulbright. LCM has the most experienced team in the market for originating and executing such industry-changing disputes financing solutions.” Nick Rowles-Davies, Executive Vice Chairman of LCM, added: “This corporate portfolio further cements our position as leading the global market in corporate portfolio transactions and comes at a time of considerable growth and increased opportunity for LCM.” Cameron Harvey, Head of Disputes of Norton Rose Fulbright, commented: “LCM’s finance facility will be of great benefit to our client and its ability to manage legal claims across multiple jurisdictions. Norton Rose Fulbright entered into a strategic alliance with LCM because we foresaw a growing need for corporate litigants to be able to engage in necessary dispute resolution without having the experience cripple their balance sheets, something which is even more crucial during the COVID-19 pandemic. We look forward to continuing to work with LCM to offer financing and legal solutions to our international and domestic clients as they adjust to the impact of the pandemic and emerge during the eventual recovery.” This month, LCM welcomed Non-Executive Director Gerhard Seebacher to its Board, while Helene Roins joined as an Investment Manager based in Sydney. In April 2020, Investment Manager James Foster and Chief Financial Officer Mary Gangemi both joined LCM in London. About LCM Litigation Capital Management (LCM) is a leading international provider of litigation financing solutions. This includes single-cases and corporate and law firm portfolios across class actions, commercial claims, claims arising out of insolvency, including assignments, and international arbitration. LCM has an unparalleled track record, driven by effective project selection and robust risk management. Headquartered in Sydney, with offices in London, Singapore, Brisbane and Melbourne, LCM listed on AIM in December 2018, trading under the ticker LIT.
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Commercial

Bill Farrell, Co-Founder of Longford Capital, Speaks to K&L Gates

William Farrell, Jr., Managing Director and Co-Founder of Chicago-based Longford Capital, recently appeared on a podcast hosted by K&L Gates. Farrell shared his personal journey from working as a prosecutor in the Cook County prosecutor's office to founding and managing litigation funding powerhouse Longford Capital. Below are some highlights of the 50-minute long podcast, which can be found here. Q: Are there any thoughts you have about what we need to be thinking about to be appropriate allies to influence or change systemic racism in our legal system? A: One thing that has struck me, in Chicago anyway, is that since the horrific incident that involved Mr. Floyd, we have had dozens of shootings in Chicago in the south and west side neighborhoods, and dozens of African Americans have died as a result of those shootings. And their lives matter, very much. I wish we’d spend time focusing on more of a grass roots community-driven effort to increase educational opportunities for all of our citizens, which I think will lead to progress and success.  Q: What are some things you carry with you from being a prosecutor that might have given you a leg up? Was there something in particular from the Cook County prosecutor’s office that you took with you into the litigation realm? A: One of the things I enjoy most about my job has been interacting with people, and trying to understand people. I learned an awful lot about that as a prosecutor. Taking the skills of being able to listen to people coming from extreme situations and trying to understand them and their motivations, whether they’re telling me the truth, they’re trying to skirt the truth—and how to motivate them to tell me the truth has been really important, and I’ve carried it with me throughout interacting with juries, which is a very personal experience. Trying to understand each and every juror and trying to get them to understand me and my client’s position is a quality that was borne in my time at the state’s attorney’s office. Now, as a commercial litigation funder at Longford Capital, we have a policy that we must meet our clients in person whenever possible. That’s been a little tough as of late, with the stay at home orders. But we think making a personal connection and understanding the intangibles is important. We might understand that a client might have a meritorious breach of contract claim, but at Longford, we want to understand—what’s the motivation for trying to enforce those legal rights? What is the client trying to achieve? Is it to just have a judge rule in their favor so that they have a feeling of justice? Is it to achieve a commercially reasonable financial result? Everybody has a different approach to litigation. I want to understand it from a very personal level. Q: So you and your brother, I assume, talked about forming this company, which—even today, it’s not a road that’s normally traveled. Tell us how you came up with the idea, and some of the bumps in the road that might have occurred? A: It was in 2009 that we first learned of this idea of third party commercial litigation finance—the notion that a third party, not the client or the law firm, would participate in the funding of attorney’s fees and expenses incurred in connection with pursuing a meritorious legal claim. It was a very novel idea; in fact, I had never heard of it before. I don’t think anyone in the US had heard of it before. My initial reaction is that it’s too bad it’s prohibited in the United States, because I thought it was such a smart idea. A solution to the ever-increasing call by corporate clients for alternatives to the billable hour model. I thought it was unfortunate that it was somehow impermissible in the United States. But I took the time to research why, or what rule prohibited this, but I couldn’t find the rule. There was no prohibition against litigation funding in the US, and in fact it blended in quite well with the range of possibilities that corporate clients involved in litigation used as a means of paying for their legal services—the first and most obvious being paying their lawyers. I immediately thought of it as a solution for clients approaching me and my firm seeking alternatives to the billable hour. I thought it would be a great alternative to saying ‘I’m sorry, my firm doesn’t offer contingency agreements.’ And I began to study it, and at some point included my brother Tim in the discussion. At that point, Tim was representing about a thousand US manufacturing companies, ranging from multiple billion dollar publicly-traded companies, down to hundreds of family-owned businesses. His reaction to this also helped form our future pursuit of Longford Capital. His reaction was, ‘almost every one of my 1,000 member companies is involved in litigation, virtually at all times. And you’re now telling me that they have an option, an alternative to paying their lawyers monthly, and that option is to transfer that cost to a third party—a funding organization—specifically designed for that purpose, and that the funding will be in the form of an equity non-recourse agreement that’s only required to be repaid if the company is successful in the litigation. It’s not a loan but rather an investment in the outcome of the case.’ He said, ‘I’ll do the survey but I don’t even need to do it. I’ll tell you what the answer is. Companies will want that alternative, easily more than 50% of the time.’ Q: From there you had to take that to investors and try to get that money out the door. Talk about that process—did you have a hard time convincing people to buy into this concept? What were some of the struggles you had in those early fundraising periods? A: From the time we learned about this idea of litigation finance in 2009, we studied a lot over a two-year period, and we tried to surround ourselves with experts in the field. We tried to find answers to all the questions that might be asked of us by investors, firms, and lawyers and clients. After vigorous investigations over two years, we thought we had the answers to all those questions, and they all suggested that litigation finance would be attractive in the United States. However, there was a leap of faith: We didn’t know whether institutional investors would embrace the idea of a new investment strategy that had never really been tried or tested. There were no benchmarks or track record, and maybe worse yet, being advocated by a group of people that weren’t professional investors who had never worked investing the money of other people.   The reason I think it was successful, is that some of the characteristics of litigation finance from an investor’s perspective are very attractive. Mainly that the outcomes of commercial litigation are not correlated to major investment indices. Meaning that whether the stock market is up or down on the day the jury is coming back really has no impact—and that extends to credit markets, equity markets. The outcomes of commercial litigation are not affected by presidential elections, weather patterns, geopolitical events—as a result, investment in the outcome of legal claims serves to diversify investment portfolios. And that is a very attractive feature for institutional investors. It turned out that that was the key to getting interest from investors.
Commercial

False Claim Act Ruling Stuns Litigation Funders

The False Claims Act has long been a source of contention in modern courts. The law, which dates back to 1863, allows anyone aware of fraud against the federal government to make a claim. The act is often cited by litigation funders, however, a court decision from earlier this week rules that such cases can be easily dismissed. Insurance Journal explains that the ruling means that the Justice Department may dismiss any suit filed under the False Claims Act if the suit is deemed meritless. This ruling, made by the 7th Circuit Court of Appeals, represents a reversal of an earlier decision stating that the government needed a rational basis to dismiss a case filed under this act. The False Claims Act leads to cases that are long, complicated, and expensive to bring to completion. Even when a case is utterly without merit, defendants face pressure to settle rather than incur the expense of fighting. Nearly every sector of the economy is impacted by the False Claims Act—which also allows cases to proceed without government involvement. Relators are those filing a claim under the False Claims Act, which states that the Justice Department may usurp the prosecution of a relator’s case. They may or may not share an award for damages with the relator, at their discretion. As of 2018, nearly 600 new filings are received yearly. This led to a memo from Michael Granston, then director of the Justice Department’s commercial fraud unit—insisting that US attorneys dismiss claims that were lacking in merit, which in turn presaged the recent ruling. 
Commercial

UK Class Action-Style Suit Proceeds Against Marriott International

A data breach impacting at least 500 million guests is the foundation of a class-action-style suit filed against Marriott International. The alleged breaches took place between July 2014 and September 2018, and involve guests around the world, including about 30 million EU residents. Tech Crunch explains that UK citizen Martin Bryant has filed the legal action on behalf of the millions of guests who made reservations at the hotel brand throughout England and Wales. Beginning in 2014, hackers broke into Starwood Hotels group databases, stealing guest names, email and phone numbers, physical addresses, credit card data, gender, and more. In 2016, Starwood was acquired by Marriott, but the data breach was not discovered until 2018. Global litigation funder Harbour Litigation Funding is fully funding the case, signaling the funding industry’s willingness to fund representative actions in UK cases. Some suggest this is a stepping stone to a larger payout. Hausfeld, an international law firm specializing in class actions, is representing Martin Bryant on behalf of the group. Michael Bywell, a partner at Hausfeld, stated that Marriott International failed to secure data or improve technical mechanisms in order to protect guest information. Their actions represent a clear breach of data protection laws, specifically written to protect the data of private citizens.   This claim is brought under Rule 19.6 of civil procedure rules, and includes any member of the claimant class who has not opted out. Those who wish to register may do so, provided they made reservations at one of the impacted brands. These include (but are not limited to) Sheraton Hotels, Aloft, The Luxury Collection, and any other hotels owned or operated by Marriott International or Starwood during the relevant time period. There are no fees or costs associated with registering interest in the case.
Announcements Commercial

CrosstownHelp™: BridgePoint Financial announces Expropriation and Business-Loss Consulting for those affected by delayed LRT project

TORONTO, Aug. 20, 2020 /CNW/ - In response to the more than 3,000 small businesses negatively affected by the Eglinton Crosstown LRT project, BridgePoint Financial has launched CrosstownHelpTM, an expropriation and business-loss consulting and financing program to help recoup losses and restore financial and business stability to those impacted by the delayed infrastructure project. BridgePoint Financial provides businesses with access to legal representation, expert advice, and financing that business owners can use for working capital, relocation costs, or to pay for the costs of litigation allowing them to withstand the negative financial effects of the government's actions. "BridgePoint Financial launched CrosstownHelpTM to educate businesses and provide them with the guidance and financial support they need to pursue expropriation claims and receive the fair compensation they are entitled to," said John Rossos, Co-founder and Principal of BridgePoint Financial Services Inc. "The cost of expropriation is significant, and while the Eglinton LRT is a much-needed infrastructure project, hundreds of businesses have received substantially less than fair value to cover the loss and interruption of business." Unfortunately, the Eglinton Crosstown LRT project, as with many road construction projects, has come at a big cost to business owners who often have to borrow, relocate or close down altogether. The Ontario Expropriation Act provides that businesses will receive fair compensation for business interruption, relocation and ancillary costs, and loss of business and goodwill. To date, $6.6 million has been given to Business Improvement Areas for marketing, parking, and maintenance support, while the Province of Ontario recently announced $3 million to support the areas impacted by the construction. "For small business owners operating along Eglinton Avenue, the transit project is a threat to their livelihood," added Rossos. "In many cases, these business owners feel intimidated and aren't aware of their options or that they have any.  BridgePoint's goal is to give businesses the best opportunity to level the playing field to advance their claims." BridgePoint's consulting services provide access to the best expropriation expertise across Canada and allow business owners to hire top lawyers and experts without being forced to settle for less due to cash flow related issues, assuming full recoverability of costs from the government. BridgePoint will also provide businesses with financing to assist with:
  • Costs associated with loss of revenue including legal and expert fees or business relocation;
  • Costs due to business interruption including working capital to stabilize the business, preserve goodwill and cover damages; and
  • Access to the best legal representation and expert advice including experts in expropriation and funding to pay for those costs.
The Eglinton Crosstown LRT is one of the largest transit projects in Canada and, once completed, will include 25 stops along a 19km corridor across Eglinton Avenue in Toronto. Since construction began in 2011, more than 140 businesses along Eglinton Avenue West have closed. Recently, the City of Toronto announced that construction will continue well into 2022. About BridgePoint Financial
BridgePoint Financial is Canada's leading provider of specialized financing solutions for the Canadian legal services market, addressing the needs of plaintiffs, lawyers, and the experts involved in advancing legal claims. BridgePoint's goal is to level the litigation playing field and to protect its clients' rights to full and fair access to justice. For more information about the expropriation consulting and financing services available from BridgePoint Financial, visit crosstownhelp.com.
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Commercial

Will New Aussie Funding Regulations Impede Class Actions?

As the federal government in Australia sets up new regulations governing the Litigation Finance industry, some fear that class actions will be much more difficult to pursue. One major change requires that all funders be licensed by ASIC—and meet its expectations of competence, honesty, fairness, and efficiency. That may not seem like a tall order, but it’s not yet certain what hurdles must be cleared to obtain the required licenses. ABC Rural (Australia) reports that smaller funders have the most to fear in this new climate. Take, for example, the Australian Farmers' Fighting Fund, which was developed to fund cases with lasting impacts on growers. Hamish Brett lost his income when an import ban went into effect in 2011. Without funding, he'd have nowhere to turn. With funds from the AFFF, his share of the class action award covered his losses. Brett has stated that more than the money, he’s glad the government will no longer be able to destroy the livelihoods of people with the stroke of a pen. Litigation Finance is also the subject of a forthcoming parliamentary inquiry. Citing concerns that the number of class actions has nearly tripled since the popularization of litigation funding, Treasurer Josh Frydenberg has called for more oversight and increased regulation. He explained that third-party funding should be treated the same way as other financial services—which are generally licensed by the Australian Financial Services Commission. 
Commercial

Class Action Against Oracle and Salesforce Backed by Innsworth

It may be the largest privacy-related class action in history, as The Privacy Collective gears up for a class action against Oracle and Salesforce. The action, which alleges the unlawful large-scale collection and storage of internet users' data in Denmark. Allegedly, the data was shared with multiple commercial and AdTech companies. Diginomics reports that the action is funded by Innsworth Litigation Funding, a London-based funder known for backing large commercial litigation and arbitration claims. Their portfolio of funded cases includes such names as Mastercard and Volkswagen. ILF’s involvement in this action is of particular interest, because Innsworth is owned and partially funded by Elliott Management Corp. Moreover, Elliott bought over $20 million of Oracle stock earlier this year, though they do not appear to have a financial interest in Salesforce. The case is being called one of the largest examples of unlawful data processing since the internet came to be. The case asserts that the rights to protect one’s privacy—including online data—is fundamental. While Oracle and Salesforce are not the only companies accused of mishandling user data, they are among the largest. Regardless of the individual players, this is the sort of case that was bound to happen at some point—given the inherent vagaries of laws surrounding privacy, consent, and data collection and processing. Privacy protection is also being examined in a similar case in the London High Court. Cadwalader partner Melis Acuner has stated that this type of case allows courts to aggregate the harm caused by data privacy violations. No doubt, these cases will set a lasting precedent no matter what the final outcome is. A statement from Salesforce explains that the company disagrees with the allegations and will demonstrate their lack of merit. Oracle also promises to defend against what the company calls “baseless claims,” though with more feisty language—using terms like “bad faith” and ‘shakedown litigation.’
Commercial

New Singapore Insolvency Laws Open Door to Third-Party Funders

What happens when a liquidator lacks the resources to pursue a debt? Often times, the debtor walks away from their responsibilities. That may be changing under Singapore’s new Insolvency Restructuring and Dissolution Act (IRDA)—which took effect just two weeks ago. The Act is part of a larger overhaul of Singapore’s insolvency legislation. Business Insider details that one key facet of the new law allows liquidators to utilize third-party funding to hold directors of firms to account. This change is expected to allow judicial managers to be appointed even after a business has collapsed.   The changes in the IRDA have been in the works for seven years—long before the COVID pandemic impacted businesses around the world. But the legislation takes on new significance, now that corporate insolvency and personal bankruptcy have skyrocketed. In the second quarter of this year alone, Singapore’s economy shrank over 13%. Meanwhile, applications for compulsory liquidation went up a shocking 70%. Governmental relief measures combined with encouraging non-legal mechanisms to settle conflict have led to an easing of new bankruptcies and insolvencies. The Act offers protection and increased options for debtors in temporary crisis—but also provides safeguards against abuse from opportunistic use of the Act’s provisions. It is believed that the IRDA is the final part of a planned revamping of insolvency laws designed to carve out a place for Singapore in the field of cross-border restructuring of debt. Insolvency laws must be fair to debtors and creditors in order to be effective. The ideal framework for insolvency should leave both parties feeling as though justice has been served. Allowance for third-party funding is a key element of the IRDA, but it is one tool in a larger toolbox. It’s expected that the non-recourse nature of the funds, along with the transparency the system provides, will help bolster Singapore’s status within the global marketplace.
Commercial

Anexo Group Secures Funding for Volkswagen Claim

For Liverpool-based Anexo Group, 2020 got off to a slow start. From Jan-June of this year, the legal services provider showed sales of GBP 36.625 million, down from 36.717 million this time last year. Share dividends are .5p a share, down from 1p per share last year. Still, the group is poised for a big finish to 2020. The Business Desk reports that Anexo Group has taken steps to expand the business while bringing in extra funds. In May, a share placing brought in GBP 7.5 Million. This was used to bring in new staff, and amp up the company's marketing presence. Meanwhile, their legal team, Bond Turner, is pursuing a class action regarding emissions against Volkswagen. A further GBP 2.1 million was raised from a litigation funder. This influx allowed the firm to seek out and sign on class action members in the case against Volkswagen. Litigation funding allows Bond Turner to devote resources to the case—which has the potential for significant returns—without impeding the firm’s overall budget. Like most businesses, Anexo Group has had to get creative in how they balance budgets, meet expenses, and adapt to the needs brought about by the COVID pandemic. Because litigation funding was available to them, they were able to continue pursuing meritorious cases, acquire new clients, and transition staff to remote work whenever possible. While COVID has brought about a reduction in receipts and increased costs—the firm expects more and larger settlements and collections in the second half of the year. Executive chairman Alan Sellers anticipates great things ahead, saying that Anexo has already hit its target of generating a profit this quarter. The firm has increased its overall number of cases, while maximizing the value of their existing backlog of cases. Sellers went on to assure shareholders that they are looking ahead with confidence.
Commercial

Twists and Turns in Tesla Case Against Former Employee

Martin Tripp, formerly with Tesla, is embroiled in a case with his former employer. The case, which began in 2018, accuses Tripp of stealing and disseminating multiple gigabytes of confidential trade secrets. In turn, Tripp denies all wrongdoing and describes himself as a whistleblower exposing evidence of vital safety concerns and company fraud. He is countersuing Tesla for defamation. Teslatati reports that recently, Tripp fired his legal team and intends to represent himself for the rest of the case. This announcement came on the heels of the revelation that Tripp’s litigation funder, The Funicular Fund LP (doing business as Cable Car Capital LLC) was short-selling Tesla stock. When news broke, Tripp took to Twitter to explain himself. His Tweets assert that he believed the funding for his case to be from a legitimate litigation funder. He also stated that it was his legal team who advised him not to divulge information about the funding. Recent documents published in Google Drive and released by Tripp detail that Cable Car Capital invested $150,000, and that a further $125,000 was requested. In response to the confidential information drop, Tesla filed an emergency motion to force Tripp stop publishing, and to stop “harassing” counsel for Tesla. This is in reference to his publishing an email from Jeanine Zalduendo, counsel for Tesla.
Consumer

ME Group Announces Second Senior Hire in Two Weeks

Fintech credit professional Rob Cottingham has been appointed to Chief Credit Officer at ME Group, a Cheadle-based firm. Cottingham takes on this new role that will report to executive chairman Bruce Walker—who is also new to the business. These appointments herald a new phase in a long-term growth strategy for the company, as it moves toward becoming a leader in consumer litigation funding. Business Desk details that Cottingham is expected to evaluate credit risk. His role will be crucial as he heads up the credit committee that determines how litigation funding is allocated to cases and firms. Rob Cooper, ME Group chief executive, states that Cottingham’s CV is impressive, and that his experience is expected to add considerable clout to the senior team. Cooper went on to explain that ME Group found itself in competition with other firms to hire Cottingham. Existing tech at ME Group is integrated with that of claimant law firms. They also boast in-house claim expertise. Together, this provides excellent oversight and an ability to effectively manage credit risk throughout the litigation process. Prior to his new appointment, Cottingham was with Specialist Lending, assessing credit and risk for a financial technology startup. Funded by private equity, SL provided consumer litigation funding to law firms. He has also worked for Elavon Merchant Services, Provident Financial Group, and Ferratum Group—all in risk-management. His new appointment at ME Group takes effect in September.
Commercial

Litigation Finance in the Startup Landscape

Startups are often strapped for cash and rushing to meet deadlines, so what happens when your startup suddenly has to fund an unexpected legal battle? That’s what happened when video startups Eko and Quibi found themselves in a legal skirmish. Both companies are relatively new, and each has a huge corporate entity at its back (Disney/eBay and Walmart, respectively). Bloomberg Law reports that the companies are in dispute over ‘turnstile’ technology, after Eko pitched it to Jeffrey Katzenberg. Both parties have filed suit to keep the other from using the tech in question. Eko is funding their suit by selling equity in the company to hedge fund and litigation funder Elliott Management. This idea, selling capital to finance litigation, was unheard of 10 years ago. Now, it’s becoming commonplace—largely because businesses are finally able to defend and protect their rights while pursuing business goals. Litigation Finance is beneficial to startups, offering three distinct advantages. First, the use of funding keeps new businesses from giving up equity to fund their suit. A valid claim is already an asset that can be used to secure funding. Next, the non-recourse nature of litigation funding means a company only owes a funder if the case is successful and an award is received. This kind of de-risking can be vital to companies in their early stages. Finally, funders can choose to provide working capital to companies that have a meritorious claim. That money can be used to help the plaintiff’s business run smoothly, even though litigation is pending. Ultimately it’s Litigation Finance that helps a new company like Eko pursue a case against a giant like Quibi. Regardless of who wins, we can be confident in knowing that justice will be meted out appropriately, because both sides were given a fighting chance—thanks to Litigation Finance.
Commercial

Q&A With Litigation Funder Susanna Taylor

Susanna Taylor is a Senior Investment Manager with LCM, and has been a commercial litigator for over 20 years. She answered a few questions from Tom Balmer, Director of Business Development at TLS. JD Supra details the finer points of their discussion, beginning with a general comment on how her firm, Litigation Capital Management, has done so well. Taylor credits her company’s successful growth to three specific things:
  • Formulating an assertive strategy for short and long-term growth.
  • A welcoming and professional corporate culture where people feel valued.
  • Compiling a staff of experts at the top of their game.
Taylor states that it’s vital to develop a strategy that fits your personality and strengths, and then utilize that to get the results you want. Also, taking time to build and grow a network from existing contacts is essential. Networks aren’t just made of potential clients. They can encompass anyone who might call on you for your expertise, and anyone you might call on as well. When asked for advice for young, green lawyers, Taylors’s response was simple. Follow your interests and find yourself a mentor. Then do all you can to surround yourself with those succeeding in your desired area. Listen more than you talk, and learn all you can while you can. Taylor’s own experience included work in the Crown Solicitor’s Office, which is where she developed an interest in litigation. From there, she worked at Hammonds in London and then onto Norton Rose Fulbright, where she focused on commercial claims and class action. In 2014, she took her advanced skillset to LCM, and has been successful there ever since.
Commercial

The Evolution and Expansion of Litigation Finance

The concept of Litigation Finance is a simple one. A plaintiff with a valid claim can seek third-party financing to take that claim to court. If the claim is successful, the funder gets an agreed-upon percentage of the award, or a multiple of the investment, or some combination thereof. If the claim isn’t successful, the funder walks away with nothing. That simple model has grown by leaps and bounds in recent years, and is now even more powerful given the pandemic and subsequent lockdown. Above the Law explains that Litigation Finance is growing in many directions. These days, firms and businesses turn to litigation funding to manage risk, adjust balance sheets, or free up capital for other uses. Three areas, in particular, are growing rapidly. Corporate entities are typically able to fund their own litigation. But they’re taking advantage of the opportunities that litigation funding can offer. Even strong lawsuits are unpredictable, and company shareholders might not be in favor of pursuing litigation. Funding is accounted for differently on balance sheets than, say, a traditional loan. So some large businesses use litigation funding as a way to improve valuation. Portfolio funding refers to a circumstance when a third-party funder arranges to bankroll a portfolio of cases, rather than provide funds for a single claim. Returns on this type of funding can be sporadic and unpredictable. But they can also be highly lucrative, over time. Portfolio funding is particularly valuable for firms that take on contingency cases—since it provides reliable cash flow. Claim selling is another way people use Litigation Finance to improve cashflow. A funder might agree to purchase the interest in a claim. This can be incredibly helpful for those who can’t wait years for the court process and collection to happen. As the practice of Litigation Finance grows and develops, we can expect legal professionals to find new ways to make use of it.
Announcements Consumer

Tribeca Capital Group, LLC, Converts COVID-19 Wrongful Termination Claims into Cash with Lawsuit Fundings

NEW YORK, Aug. 12, 2020 /PRNewswire/ -- Tribeca Capital Group, LLC, a pioneer in pre-settlement litigation funding, announces that it is now advancing funds to claimants who have lost their livelihoods through wrongful termination, the employer's mishandling of wage and benefit claims, and other employment issues arising from the pandemic crisis. "It wasn't long after the coronavirus reached our shores that we started hearing about mass layoffs and furloughs. Unemployment levels suddenly jumped to double digits, and over the course of weeks, Americans had filed more than 6 million unemployment claims. With so many losing their jobs, it was inevitable that we would discover some layoffs and furloughs were being conducted unlawfully," said Tribeca's founder, Rory Donadio. Some companies affected by so-called shelter-in-place or lockdown orders laid off substantial numbers in their workforces without observing mandatory federal and state reduction in force rules. Other companies have fired employees for wanting to wear personal protective equipment or for calling out unsafe working conditions. Some have fired workers or denied them federally mandated sick leave for exhibiting symptoms of COVID-19 or for caring for a family member stricken with the virus. Still others have refused to pay back wages or compensate laid off employees for unused benefits. "We've seen employers commit egregious acts like reducing an employee's wages by the amount of their stimulus checks or by denying them the severance guaranteed by their employment contracts," says Donadio. "There's no doubt that this pandemic is unprecedented and has stretched employers to the breaking point. Employers have a responsibility to their workforce, which a majority of employers take seriously even under the direst of circumstances. Unfortunately, not all employers share respect for federal and state laws and employment contracts that are designed to protect employees." Wronged former employees are hit by a double whammy. Not only have they been personally wronged, they have lost their sources of income. Donadio explains, "The ex-employee files a lawsuit seeking compensation for the wrongs they endured and replacement wages to help them survive and provide for their families. In the meantime, they turn to litigation funding companies like Tribeca to fill in the gaps. Based on a thorough evaluation of the claim, Tribeca can often provide the plaintiff a one-time advance to get them over a hump or an ongoing payment to supplement unemployment benefits." If you or a family member suffered a wrongful termination or reduction in wages, Tribeca may be able to help. Hundreds of plaintiffs have turned to Tribeca to convert their court cases into cash when they needed it most. If you need help funding your case, contact Rory Donadio, Tribeca Capital Group, LLC, at 866-388-2288 or visit our website for more information: tribecalawsuitloans.com
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Announcements Consumer

Legal-Bay Announces Update to California Wildfires Negligence Claims

SACRAMENTO, Calif., Aug. 13, 2020 /PRNewswire/ -- Legal Bay Lawsuit Funding reports that California utility company PG&E recently admitted negligence in the 2018 Camp Fire that killed 84 people and destroyed the entire town of Paradise. The fire devastated hundreds of lives and wreaked billions of dollars in property damage, and was the single most destructive wildfire in California's history. After two entire years of litigation, PG&E entered a guilty plea and will pay $13.5 billion to people who lost homes and businesses from wildfires started by its equipment. Additionally, Governor Newsom recently signed into law a $20 billion fund to assist in the displaced residents' recovery. Additional lawsuits are expected to be filed. As California enters their wildfire season once again, the Gold Fire in the rural northeastern part of the state has already burned through several hundred acres, and residents are currently being evacuated. Those who have been displaced can apply for aid through the Wildfire Assistance Program, a fund intended to help anyone who needs financial assistance with housing costs or daily living expenses while they rebuild their lives. If you or a loved one need an immediate cash advance, you can apply HERE or call: 877.571.0405 Chris Janish, CEO of Legal-Bay, commented on the recent wildfire lawsuits, "Victims of these disasters need to rebuild their homes and their lives now, but their cases are lagging in the court system. Legal-Bay is proud to offer pre-settlement funding to plaintiffs so they can survive until their wildfire lawsuit makes it to trial." If you have filed a wildfire lawsuit and need an immediate cash advance against your pending settlement, you can apply HERE or call: 877.571.0405 If you have not yet filed yet and need help finding a lawyer or law firm that specializes in wildfire lawsuits, Legal-Bay can offer referrals. Legal-Bay's programs are non-recourse lawsuit cash advances, also known as case funding, which means you only repay the lawsuit cash advance money if you win your case. None of the lawsuit money programs should be considered to be a lawsuit loan, lawsuit loans, settlement loans, settlement loan, pre-settlement loans, or a pre settlement loan.
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Announcements Commercial

DLA PIPER AND LCM COLLABORATE WITH NEW THIRD-PARTY FUNDER FOR DLA PIPER CLIENTS

DLA Piper has entered into a non-exclusive arrangement with publicly listed disputes financier Litigation Capital Management (LCM), and a newly formed litigation funder, Aldersgate Funding Limited to offer clients of DLA Piper access to £150m for funding large-scale litigation and arbitration. This will be offered on a financial risk-free (non-recourse) basis with a streamlined approval process embedded within the offering. Intended to be available in all applicable international jurisdictions, Aldersgate Funding has been structured to provide DLA Piper clients "best-in-class" funding terms, fast decision-making and enhanced due diligence that will allow actions to be pursued without any financial downside to claimants. With access to funding secured from LCM and Aldersgate Funding, DLA Piper will be able to provide the firm's clients with non-recourse finance for 100% of the costs of bringing a claim and additionally the ability to ‘source in’ adverse cost cover and security for costs as necessary. LCM, which is listed on the London Stock Exchange’s AIM market, has a proven and successful track-record spanning more than two decades of providing bespoke financing solutions, including corporate portfolios, to clients in various industry sectors across Europe, the Middle East, Africa, and Asia-Pacific. This funding offering opens up the opportunity to DLA Piper clients to pursue claims that would have otherwise been untenable due to capital constraints. Aldersgate Funding will be led by former DLA Piper Corporate partner Jim Holding. Jean-Pierre Douglas Henry and Jamie Curle (DLA Piper Co-Heads of Global Litigation & Regulatory and UK Litigation & Arbitration respectively) have spearheaded the portfolio funding initiative which has ultimately led to the creation of Aldersgate Funding. They will continue to lead DLA Piper’s engagement in this area and for this offering in particular. Former Global Co-Chair of Litigation & Regulatory at DLA Piper, Stephen Sly, has retired from the Firm and will also serve as Chairman of the Investment Committee of Aldersgate Funding, bringing decades of disputes experience to the table. DLA Piper will be offering this funding service as part of its enhanced legal offering named Law&. Speaking on the collaboration, Simon Levine, Global Co-CEO, DLA Piper commented: "We are working at pace to develop a stream of bold and innovative products and services as part of our enhanced legal offering Law&, that will allow clients to seize opportunities. As part of this mission, our collaboration with Aldersgate Funding and LCM gives clients access to capital to fund claims with a speed, ease and at a quantum hitherto unheard of and represents a sea change in the traditional approach to litigation funding." Jim Holding, Managing Director of Aldersgate Funding added: "This offering provides the ability for DLA Piper clients to pursue recourse through litigation and arbitration on a risk-free basis, opening up opportunities that may have previously been unavailable to them. With the benefit of our valuable collaboration with LCM, Aldersgate Funding provides a streamlined and efficient service that provides corporates with efficient access to capital, providing increased financial freedom within their businesses, an ability that is especially relevant against the current backdrop of global economic uncertainty.” Nick Rowles-Davies, Executive Vice-Chairman, Litigation Capital Management, commented: “We are delighted to be working with DLA Piper and Aldersgate Funding on this facility which not only demonstrates that LCM collaborates with the most forward-thinking law firms globally, but also the maturing of the industry where clients now demand sophisticated disputes finance solutions that move beyond the traditional templated funding model,” Funding through Aldersgate Funding is only available to clients of DLA Piper and can only be accessed via the firm.
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Commercial

Cryptocurrency Class Action Seeks Funding

Did social media giants like Twitter, Google, and Facebook conspire to kill cryptocurrency in 2018? JPB Liberty, led by Andrew Hamilton, is filing a class action against social media. In a recent statement, Hamilton claimed the assertions would be “pretty easy” to prove. CoinTelegraph explains that Hamilton is accusing several prominent social media entities of behavior more fitting a cartel than a web platform. Allegations assert that there was a coordinated attack on competing cryptocurrencies. Facebook, for example, is alleged to have banned competitors from advertising on its site while developing its own Libra currency. Similarly, Twitter CEO Jack Dorsey banned ads for cryptocurrencies while taking his own payment processing app, Square, into the crypto realm. Together, a handful of social media giants allegedly managed to squash the ICO (initial coin offering) market. $600 million in claims have already been amassed, with Hamilton stating that claims could grow as high as $300 billion. This suggests that the case is ripe for third-party funding. The case is being brought to Australia, a country where Litigation Finance is booming. If non-recourse funding is provided for this class action, funders will receive 30% of any award, with the remaining 70% going to costs and claimants. Anyone wishing to sign on as a claimant has until August 21 to do so.
Consumer

Litigation Finance Data Suggests a Need for Post-Settlement Regulation

Non-recourse funding is the backbone of the Litigation Finance model. It’s what exempts the practice from usury laws and allows funders to charge higher interest rates than other lenders. An as-yet-unpublished article suggests that funders actually made higher profits from individual car accident claims than from mass tort cases. That is to say, cases where a small number of people are injured or killed made more money for funders than large cases with multiple impacted parties. Reuters points out that if funders aren’t really taking on high risk, what justifies the high-interest rates Moreover, post-settlement cases are increasingly taken on by funders, and carry little, if any, risk. An upcoming paper suggests capping post-settlement interest rates at 15%. Lynn Baker, a law professor at the University of Texas, Ronen Avraham of the University of Tel Aviv, and Anthony Sebok of Cardozo Law examined data from thousands of funded cases. Their conclusions were striking, and suggest a need for increased oversight of the industry. Most interesting were the advances made near the end of cases. Post-settlement advances accept almost no risk—which becomes evident when case vetting is examined. Funders vet cases carefully before extending any funds. Pre-settlement cases are evaluated on their merits and potential awards. But the veracity of the claim has almost no relevance to funders in post-settlement claims. This is presumably because the key issue for funders is the net recovery. Baker points out that in the data she reviewed, post-settlement cases were limped into an ‘other’ designation, ostensibly to de-emphasize how financially valuable they are to funders. Data suggests that as much as 68% of funder profits stem from post-settlement cases. This in turn suggests that post-settlement advances are a different sector than pre-settlement funding and should be regulated differently. Ultimately she maintains that if there’s no real risk, the ‘non-recourse’ designation should not apply.