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Announcements Commercial

Global litigation funder Omni Bridgeway offers funding to Folli Follie Bondholders

To current and past holders of the CHF 150 million 3.25% 2017-2021 bonds Issued by FF Group Finance Luxembourg II SA Guaranteed by Folli Follie ISIN CH0385518052. This offer for litigation funding does not purport to be complete and is qualified in its entirety by reference to the terms of a Claims Purchase Agreement, a Claims Assignment Agreement and a Litigation Funding Agreement. This letter summarises the principal terms on which Omni Bridgeway is prepared to offer a litigation funding arrangement to holders of the CHF 150 million 3.25% 2017 2021 (ISIN CH0385518052) bonds issued by FF Group Finance Luxembourg II SA and guaranteed by Folli Follie Commercial Manufacturing and Technical S.A. (ISIN CH0385518052) (the "Bondholder(s)" and the "Folli Follie Bonds”, respectively). Alcimos Limited ("Alcimos") shall be cooperating with Omni Bridgeway in its efforts to assemble a group of claimants in relation to the proposed litigation funding arrangement. Omni Bridgeway is an established, global litigation funder which already has a litigation funding arrangement in place with a group of Bondholders holding Folli Follie Bonds with a face value in excess of CHF 23 million for the purposes of bringing an action before the Swiss courts against UBS AG (the "Defendant") on the basis of their role as bookrunners for the offering of the Folli Follie Bonds. Quinn Emanuel Urquhart & Sullivan (Schweiz) GmbH (QE) has been engaged by the group to litigate the claims based on prospectus liability. Omni Bridgeway and Alcimos are inviting current and past Bondholders who are not subscribed to the existing group action, to sign-up to the subsequent group action on or before 15 May 2021. In order for Bondholders to be eligible to participate in the group action, subject to this offer, they must have purchased the Folli Follie Bonds prior to 2 May 2018. Omni Bridgeway is committed to bearing the costs associated with the litigation of the claims, on a non-recourse basis on the terms of a Litigation Funding Agreement and will not be entitled to any payment (nor to reimbursement of its funded costs) unless the litigation strategy results in a recovery. No payments to Omni Bridgeway can ever be more than the ultimate recovery. Furthermore, Omni Bridgeway will be responsible for (court) fees and/or costs the Defendant may incur in the litigation process should the case be lost and the claimants be ordered to pay adverse costs. Interested current or past Bondholders will assign their claims to CH0385518052 - Bonds Claims Enforcement GmbH, an entity which has been set-up to facilitate the efficient management of the litigation process. As such, after subscribing to the group action, it is expected that no active involvement in the litigation will be required from the Bondholders.
Commercial

The Future of Litigation Funding: Episode 5, Part 2

Episode 5, part 2 of the Turnaround Time podcast features the rest of the panel discussion on what we can expect to see in Litigation Funding trends (our coverage of episode 1 can be found here). David Prager of Duff and Phelps moderates a panel including Tatiana Markel of BakerHostetler, Kenneth Epstein of Omni Bridgeway, and Howard Brownstein of The Brownstein Corporation. Topics include transparency and disclosure in bankruptcy cases that utilize litigation funding. Below are some key takeaways from the discussion:   DP: Howard, can you talk us through a real world example of litigation funding in a bankruptcy context? And how that led to the dynamics we see today? HB: In the Fastship case, we used bankruptcy as a tool to enable litigation. Fastship was a company that had patents advertising they could build a huge cargo vessel that would cross the Atlantic in three days. So they raised money to promote the company. The ships themselves would cost about a billion dollars for a small fleet. The money they raised got used up before they could raise financing to build ships. They came to our firm and said ‘what do we do, we’re running out of money,’ and didn’t see any hope of revenue. We did an orderly wind down of the company, to avoid personal liability for the directors. Then they discovered someone had built three ships, and they were sure they infringed on the patents. But there was no money to pursue a case. I found a law firm that liked the case. They would take it on a contingency basis, they wouldn’t put up money for experts and such—back in 2012 before litigation funding. We ended up getting a DIP loan from the party funding the litigation (debtor-in-possession financing to keep a business in bankruptcy operating)...we were out of bankruptcy in a few months. It was a totally novel use of Chapter 11. As the liquidating trustee, I filed suit in federal court, because these were Navy ships. When you sue the government, they don’t settle. The case took forever. Fast forward to 2017. We won the case. The government appealed and we won there. We’ve been paid the judgement, but are still negotiating fees for costs. Not only had there been misuse of patents, but also an alleged misappropriation of trade secrets. DP: Is there a nexus between litigation funding and bankruptcy? Why haven’t we seen much pure litigation funding in bankruptcy cases? KE: There are a number of reasons why we haven’t seen that en masse yet. The ideal situation for litigation funding on the front end of the case is one in which claims against third parties are outside relative the other assets in the case. There will be increased use of litigation funding either on the front end or the back end when the trust gets set up. It’s a matter of finding the right case, and people haven’t been very aware of (litigation funding) and how it’s used. That’s part of what I do—educating the public on what funding can do, and to consider it when there’s a financial need. DP: It seems unprecedented to take a contingency bankruptcy case. Is that an opening for litigation funding? TM: That’s not really the type of work that we do. We do use litigation funding at the debtor level. That’s something I do in the international asset recovery field. The targets of our asset recovery are often offshore, and are shell companies, and you have to dig through various levels of beneficial ownership before you get to the right people. What we do in that context is, when that issue comes up, we use involuntary bankruptcy, as we, the debtor, could be the largest creditor of one of these offshores—we’d put it into involuntary bankruptcy. That means court supervision and appointment of a liquidator, which has to be funded to prosecute the claims. DP: Everyone in the industry seems to have their own proprietary structure, how do you think about that in the ‘in court’ part of bankruptcy, where disclosure is required? How will that impact pricing and competition? HB: There’s a transparency and disclosure that’s undeniable. If funders want to play in this space, they’re going to have to get comfortable with that dynamic. We’re happy to disclose material to firms, though that will get some scrutiny from shareholders. KE: There’s a necessary transparency that comes with all of this—and I don’t think that’s a bad thing. Many funders will embrace that, but it has to be commensurate to the risk. If a loan has recourse, you really can’t charge non-recourse rates. I’m not suggesting that’s going on—but judges are reacting to risk. Pricing needs to reflect the risk.
Commercial

Burford Capital Limited: Takeaways from the 2020 Annual Report

Burford Capital, the largest litigation finance firm in the world, released its 2020 annual report recently. Incorporated in 2009, Burford trades on the London Stock Exchange's AIM, as well as the NYSE. It counts 60 full-time lawyers among its 133 full-time staff. Burford boasts a total portfolio of $4.5 billion, including balance sheet assets, strategic capital, and private funds. Seeking Alpha shares cautiously optimistic insights on Burford’s numbers. Burford currently has $2.7 billion in private funds under management. This includes funds currently invested, and is split into the Strategic Value Fund ($500 million), Burford Opportunity Fund ($300 million), and Burford Alternative Income Fund ($300 million). Most of the current investments Burford makes are in Litigation Finance in European markets. Exceptions include an evergreen investment in American markets and some post-settlement asset deployment. Moving forward, it’s believed that COVID-related litigation will lead to increased funding activity in the months and years ahead. Burford’s addressable market is too large and varied to pin down. Globally, $860 billion is spent on legal fees—nearly half of that in the United States alone. By cost, Burford has achieved positive outcomes in 84% of its funding deployments. Eight Burford-funded cases which were realized last year produced ROICs of 199% or more. This suggests that Burford relies on big-ticket cases as well as profitable settlements as a core part of its earnings strategy. To date, Burford has deployed $831 million and recovered more than $1.5 billion. This, combined with a conservative debt structure, leave Burford well-positioned for further investments in the coming year. Some even speculate that the Muddy Waters attack has strengthened Burford’s reputation in the community, and its commitment to transparency. With Burford co-founders Chris Bogart and Jonathan Molot recently purchasing millions in shares, it's obvious the company execs believe Burford's success will continue, and that will eventually translate into share price appreciation. 
Announcements Consumer

Tribeca Capital Group Provides Litigation Loans To Qui Tam Whistleblower Claimants

Tribeca Capital Group, LLC, one of the nation's leading litigation loan companies, has announced a drive to help support the financial needs of whistleblowers who bring actions to expose fraudulent corporate activities and other wrongdoing. Tribeca Capital Group offers help in the form of commercial litigation loans to claimants with whistleblower actions. Tribeca is one of the few litigation loan companies in the United States to offer advances to plaintiffs in what are called qui tam cases, a special type of commercial whistleblower litigation brought under the False Claims Act against a company that has defrauded or otherwise wrongfully made a claim against the federal government. Many states have also enacted their own false claims statutes. In general, qui tam and other whistleblower actions are designed to protect the integrity of government revenue and procurement systems by allowing an individual with specific knowledge of wrongdoing to bring a suit on behalf of the government and claim a reward, usually a percentage of what the government recovers. A case filed under the False Claims Act can result in a whistleblower reward of 15 to 25 percent. Candice Payrovi, Chief Operating Officer of Tribeca Capital Group, LLC described the impetus for some common qui tam cases. "The highest percentage of cases brought by qui tam claimants involve health care and health care-adjacent services, particularly overbilling by unscrupulous Medicare and Medicaid providers. Coronavirus suits are also gaining steam. Companies that procure and supply the government with goods are frequent targets of whistleblower suits, as are defense contractors. Consider the infamous $640 toilet seat and $435 hammer." Payrovi explained why her company is eager to work with whistleblower claimants. "Qui tam and suits under the False Claims Act" are particularly challenging because they are by definition high dollar matters, and much is at stake. The people who bring these cases are protected by law against retaliation in employment, but many are wrongfully forced out of what are often lucrative jobs, and it could be some time before their matters are resolved." Because qui tam and False Claims actions do not follow the traditional litigation model, many brave souls who bring these cases do not realize that they could qualify for a litigation loan from Tribeca. Rewards in a qui tam matter can be substantial, but resolution of complex cases can take months or even years. A litigation loan from Tribeca can help whistleblowers survive the financial stress that often accompanies these cases. Donadio also emphasized that whistleblowers are protected by a guarantee that eliminates their personal liability for repayment if for some reason the case results in no reward. If you have filed a whistleblower action and would like to explore whether you qualify for a litigation loan on your award, contact Candice Payrovi, Tribeca Capital Group at (866) 388-2288.
Commercial

Securities Litigation—Trends and Strategies

Challenging economic times for a business can shed light on prior corporate misconduct. In 2020, there were multiple examples of corporate fraud exposed. As litigation related to insolvencies and fraud grows, institutional investors should be seeking out new strategies to ensure maximum possible recoveries. Burford Capital explains that the Wirecard litigation, which took place in Germany, is an excellent example of how experienced funders can improve case outcomes. Burford worked closely with law firm Quinn Emanuel. Together, the team built the largest shareholder group action against the financial tech firm, and will continue to maximize recovery for their clients. The Economist suggests that as much as a decade’s worth of fraud will soon be exposed.  Securities litigation is about to happen on a scale we haven’t seen since the 2008 financial unrest. This is sure to include jurisdictions that are new to large-scale securities activity. This means institutional investors may find themselves seeking guidance from experienced industry partners that offer insight, as well as funding. The impact of COVID may be changing over time. It remains uncertain when a new normalcy will emerge, and what it will look like when it does. With that in mind, developing a strategic litigation plan should be at the forefront of every GC’s mind over the coming year and beyond. What should that plan entail? Burford Capital recommends portfolio financing to preserve assets and mitigate risk. A portfolio funding arrangement allows fund managers to pursue multiple claims by streamlining processes and lowering costs overall. Monetizing claims is another way legal funding can be employed to free up working capital that may be needed for day-to-day operations. A sizable part of weathering financial uncertainty is to plan and adapt for the future.
Commercial

Case Study: Liquidation Using Portfolio Funding

How is portfolio funding valuable during liquidation? One case study may help explain. LCM details that the case in question involves the liquidation of a trading entity that was part of a group of construction and development businesses. The complexities of the liquidation combined with accusations of misconduct led to the liquidator spending a disproportionate amount of time assisting with the ASIC investigation, and being largely unfunded. By entering a portfolio funding arrangement with a legal funder, non-recourse funds are provided. The claims themselves are cross-collateralized, lowering the funder’s risk. This type of funding supports the pursuit of all meritorious claims—not just the most lucrative few. Ultimately, portfolio funding can increase the size of recoveries in a liquidation case while ensuring that funding is priced fairly and all claims are followed to completion.
Commercial

East to West—Patent Cases Find a New Favorite Jurisdiction

Why are patent cases suddenly more plentiful in the Western District of Texas, when for years, the Eastern District of Texas was the reigning king? It could be the recent $2.18 billion verdict in a case against Intel Corp. The jury’s willingness to hand down such a high award is likely to attract interest in trying patent cases in the jurisdiction. Omni Bridgeway explains that the West District of Texas may be positioning itself to become a destination for patent cases. This would be good news for companies hoping to pursue infringement litigation. Over the last two years, patent cases filed in the Western District surged from 2.5% of cases to nearly 20%. Most of these cases eventually land in the lap of Judge Alan Albright. Albright is reluctant to transfer cases outside the district and has expressed enthusiasm for patent cases in general. Patent infringement claims often are not pursued for financial reasons—leaving money on the table. But litigation funders can take the risk out of patent litigation in many situations. Which means funders should have their eyes on the Western District of Texas, and the IP claims that are adjudicated there. 
Announcements Commercial

Burford Capital announces closing of private offering of senior notes

Burford Capital Limited (“Burford” or “Burford Capital”), the leading global finance and asset management firm focused on law, today announces the closing on April 5, 2021 of the private offering of $400 million aggregate principal amount of 6.25% senior notes due 2028 (the “Notes”) by its indirect, wholly owned subsidiary, Burford Capital Global Finance LLC. The Notes are guaranteed on a senior unsecured basis by Burford Capital as well as Burford Capital Finance LLC and Burford Capital PLC, both indirect, wholly owned subsidiaries of Burford Capital (such guarantees, together with the Notes, the “Securities”).
Burford Capital intends to use the net proceeds from the offering for general corporate purposes, including the potential repayment or retirement of existing indebtedness. The Securities have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or the laws of any other jurisdiction, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from registration under the Securities Act or any applicable state securities laws. The Securities will be offered only to persons reasonably believed to be “Qualified Institutional Buyers” within the meaning of Rule 144A under the Securities Act or non-U.S. persons outside the United States pursuant to Regulation S under the Securities Act, in each case, who are “Qualified Purchasers” as defined in Section (2)(a)(51)(A) under the U.S. Investment Company Act of 1940.
For further information, please contact:
Burford Capital Limited 
Jim Kilman, Chief Financial Officer+1 917 985 9840
Robert Bailhache, Head of Investor Relations, EMEA and Asia+44 (0)20 3530 2023
Jim Ballan, Head of Investor Relations, Americas+1 (646) 793 9176
  
Numis Securities Limited - NOMAD and Joint Broker+44 (0)20 7260 1000
Kevin Cruickshank (NOMAD) 
Charlie Farquhar / Jonathan Abbott (Joint Broker) 
  
Jefferies International Limited - Joint Broker+44 (0)20 7029 8000
Graham Davidson 
Tony White 
About Burford Capital Burford Capital is the leading global finance and asset management firm focused on law. Its businesses include litigation finance and risk management, asset recovery and a wide range of legal finance and advisory activities. Burford is publicly traded on the New York Stock Exchange (NYSE: BUR) and the London Stock Exchange (LSE: BUR), and it works with companies and law firms around the world from its principal offices in New York, London, Chicago, Washington, Singapore and Sydney. This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities of Burford. This release does not constitute an offer of any Burford fund. Burford Capital Investment Management LLC ("BCIM"), which acts as the fund manager of all Burford funds, is registered as an investment adviser with the U.S. Securities and Exchange Commission. The information provided herein is for informational purposes only. Past performance is not indicative of future results. The information contained herein is not, and should not be construed as, an offer to sell or the solicitation of an offer to buy any securities (including, without limitation, interests or shares in the funds). Any such offer or solicitation may be made only by means of a final confidential Private Placement Memorandum and other offering documents. PRIIPs Regulation / Prohibition of sales to EEA retail investors. The securities described in this announcement are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the European Economic Area ("EEA"). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, "MiFID II"); or (ii) a customer within the meaning of Directive 2016/97/ EU (the "Insurance Distribution Directive"), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II. Consequently no key information document required by Regulation (EU) No 1286/2014 (as amended, the "PRIIPs Regulation") for offering or selling the securities described in this announcement or otherwise making them available to retail investors in the EEA has been prepared and therefore offering or selling the securities described in this announcement or otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPs Regulation. Prohibition of sales to UK retail investors. The securities described in this announcement are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the United Kingdom ("UK"). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client, as defined in point (8) of Article 2 of Regulation (EU) No 2017/565 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 ("EUWA"); or (ii) a customer within the meaning of the provisions of the FSMA and any rules or regulations made under the FSMA to implement Directive (EU) 2016/97, where that customer would not qualify as a professional client, as defined in point (8) of Article 2(1) of Regulation (EU) No 600/2014 as it forms part of domestic law by virtue of the EUWA. Consequently no key information document required by Regulation (EU) No 1286/2014 as it forms part of domestic law by virtue of the EUWA (the "UK PRIIPs Regulation") for offering or selling the securities described in this announcement or otherwise making them available to retail investors in the UK has been prepared and therefore offering or selling the securities described in this announcement or otherwise making them available to any retail investor in the UK may be unlawful under the UK PRIIPs Regulation. IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA, THIS ANNOUNCEMENT IS DIRECTED ONLY AT PERSONS WHO ARE "QUALIFIED INVESTORS" WITHIN THE MEANING OF PROSPECTUS REGULATION (EU) 2017/1129 IN SUCH MEMBER STATE, AND SUCH OTHER PERSONS AS THIS DOCUMENT MAY BE ADDRESSED ON LEGAL GROUNDS, AND NO PERSON THAT IS NOT A RELEVANT PERSON OR QUALIFIED INVESTOR MAY ACT OR RELY ON THIS DOCUMENT OR ANY OF ITS CONTENTS. IN THE UK, THIS ANNOUNCEMENT IS DIRECTED ONLY AT PERSONS WHO ARE "QUALIFIED INVESTORS" WITHIN THE MEANING OF PROSPECTUS REGULATION (EU) 2017/1129 AS IT FORMS PART OF DOMESTIC LAW BY VIRTUE OF THE EUWA IN THE UK, AND SUCH OTHER PERSONS AS THIS DOCUMENT MAY BE ADDRESSED ON LEGAL GROUNDS, AND NO PERSON THAT IS NOT A RELEVANT PERSON OR QUALIFIED INVESTOR MAY ACT OR RELY ON THIS DOCUMENT OR ANY OF ITS CONTENTS. Forward-looking statements This announcement contains “forward-looking statements” within the meaning of Section 21E of the US Securities Exchange Act of 1934 regarding assumptions, expectations, projections, intentions and beliefs about future events. These statements are intended as “forward-looking statements”. In some cases, predictive, future-tense or forward-looking words such as “aim”, “anticipate”, “believe”, “continue”, “could”, “estimate”, “expect”, “forecast”, “guidance”, “intend”, “may”, “plan”, “potential”, “predict”, “projected”, “should” or “will” or the negative of such terms or other comparable terminology are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. In addition, we and our representatives may from time to time make other oral or written statements which are forward-looking statements, including in our periodic reports that we file with the US Securities and Exchange Commission, other information sent to our security holders, and other written materials. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors because they relate to events and depend on circumstances that may or may not occur in the future. We caution you that forward-looking statements are not guarantees of future performance and are based on  numerous assumptions and that our actual results of operations, including our financial condition and liquidity and the development of the industry in which we operate, may differ materially from (and be more negative than) those made in, or suggested by, the forward-looking statements contained in this announcement. Significant factors that may cause actual results to differ from those we expect include those discussed under “Risk Factors” in our Annual Report on Form 20-F filed with the US Securities and Exchange Commission on March 24, 2021. In addition, even if our results of operations, including our financial condition and liquidity and the development of the industry in which we operate, are consistent with the forward-looking statements contained in this announcement, those results or developments may not be indicative of results or developments in subsequent periods. Except as required by law, we undertake no obligation to update or revise the forward-looking statements contained in this announcement, whether as a result of new information, future events, a change in our views or expectations or otherwise.
Announcements Consumer

LFJ Hosts a Special Digital Conference on “Investor Insights into Consumer Legal Funding” 

Litigation Finance Journal has announced an upcoming roundtable discussion on third-party legal funding. A panel of institutional investors will discuss their thoughts on Consumer Legal Funding as an asset class. This special event will be held April 13 from 11:30 am-12:30 pm EST. Tickets can be found here.  This digital conference will be moderated by Dan Avnir, Managing Director of Bryant Park Capital. Featured panelists include Ben Kaplan, Co-founder of C9 Partners, Don Plotsky, Co-Founder of Uinta Investment Partners, and Michael Morris, Managing Director of Northleaf Capital Partners.  Topics to be covered will include:
  • The unique challenges of investing in litigation
  • How do institutional investors vet fund managers?
  • Expected returns, risk/reward profiles, and manager best practices
  • Predictions for the future of the industry
There will also be a Q&A with attendees after the panel discussion. Tickets are available now.  Please note: The event will be recorded, and all who purchase a ticket will receive a link to the recording. 
Commercial

COVID as a Factor in Securities for Costs

An order for securities for costs is meant to ensure that defendants can receive remuneration from an unsuccessful plaintiff. Monies are verified or set aside until the case is completed. If a securities for costs order is not met, a case may be dismissed. For the courts, deciding whether this is necessary can be a balancing act that weighs the hardship of a defendant who cannot recover costs, versus the financial burden to the plaintiff. LCM details one case that illustrates the precarious nature of this balancing exercise. The case is Grocon Group Holdings Pty Limited v Infrastructure NSW (2020) NSWSC 1194, which involves accusations of deceptive and misleading conduct during the bidding for the Central Barangaroo Development. INSW requested that Grocon be ordered to put up security for costs. The law says that to ask for securities for costs, the defendant is responsible for demonstrating that the plaintiffs may not be able to pay the costs if necessary. INSW used Grocon’s own financial reports that demonstrated more liabilities than assets. Grocon declined to provide evidence to the contrary. Interestingly, the judge did say that the impact of COVID might have influenced his order for securities for costs if Grocon had submitted evidence to that effect. Another recent case referenced by the judge held that if a business is significantly disrupted due to COVID, a securities for costs order could hurt the business even further—and is therefore not in the interests of justice. Security for costs orders are largely left to the judge’s discretion. A judge does have the discretion to decline to order securities for costs if there is a legitimate financial reason. But in this instance, the judge wanted evidence that Grocon was in financial peril—and not merely unwilling to put up securities for costs. Ultimately, the judge ordered Grocon to pay security for costs.
Commercial

Burford CEO Purchases Company Stock

It’s always a good idea to keep an eye on which CEOs are buying shares of their own stock. Christopher Bogart, CEO of Burford Capital just made a sizable stock purchase—GBP 46,000. Simply Wall St explains that this marks the second time Burford insiders bought company stock this year, after a stock purchase of GBP 242,000 occurred earlier this year. Yet these stock purchases may not be as telling as they seem. While it’s a good sign to see company insiders purchasing shares, many analysts find the circumstance a less meaningful indicator of a company’s wellbeing when the stock price is historically low, as is the case with Burford shares currently. It is noteworthy, however, that no Burford insiders sold any shares. Strong insider ownership is generally a good sign for any company. It’s also indicative of a company’s dedication to shareholders.
Commercial

Pioneering Litigation Funder Now in Legal Battle in TARS Scandal

Timothy Scrantom was once considered a pioneer in the litigation funding community. These days, the chatter is less flattering. Scrantom, as well as Kenneth Elder and others, are ensconced in a legal battle to prevent them from seizing control of Total Asset Recovery Service. Legal Newsline reports that Ferraro Law Firm believes Scrantom and Elder are in league with Huddleston Capital VIII, a firm that recently pursued action to gain control over the existing TARS cases. The case itself suggests that life insurance companies failed to hand over unclaimed policies to the state—as dictated by abandoned property laws. What followed was a convoluted series of events involving failed qui tam litigation led by Elder and litigated by Ferraro Law, and the formation of TARS in 2009 for the purpose of pursuing escheat and insurance litigation. TARS ultimately hired Scrantom as a consultant at the behest of Elder, but not before relationships soured between both men and Ferraro Law. Now, Ferraro Law suspects that Elder and Scrantom are in league with Huddleston Capital—and states as much in their lawsuit. Though these are mere allegations at this point, Huddleston reps have sent default notices and collection letters to TARS.  Elder and Scrantom have thus far not responded to the lawsuit. And it remains unclear what evidence Ferraro has at its disposal, though given the complex nature of events, this case is likely to drag on for some time.
Commercial

Therium Funds Kazakhstan Oil Claim

A recent shareholder update from Victoria Oil & Gas PLC brought new details about the claim, which included steps taken after a small COVID outbreak, and a vetting process for the West Medvezhye license. Victoria Oil & Gas PLC also offered updates on its decade-long legal skirmish with the Republic of Kazakhstan. The dispute itself stems from alleged actions and omitted facts that were withheld by the Kazakhstan government. Ultimately, this led to the loss of the investment in an Atyrau Oblast oil field—Kemerkol Field. Near the end of last year, VOG informed the Kazakhstan government of its intention to move forward with a legal claim. This, after good-faith attempts were made by VOG to reach what they term a fair and amicable settlement. VOG now intends to pursue investment arbitration under the terms of the Energy Charter Treaty. Noted third-party funder Therium is fully funding VOG in this action. That could make for a sizable payday, given that VOG is seeking damages for monies invested, assets seized on-site, as well as the revenue VOG expected from the project.
Commercial

Podcast Episode Covers Dispute Funding for Companies in Financial Distress

David Prager of Duff & Phelps, Howard Brod Brownstein of The Brownstein Corporation, Tatiana Markel of BakerHostetler, and Ken Epstein of Omni Bridgeway engaged in a virtual discussion on dispute funding for financially distressed companies. This two-part podcast was produced by Turnaround Times.  Below are some key highlights from part 1 of the Turnaround Time podcast, which can be found here.   DP: What makes litigation funding such a breakthrough opportunity? HB: I’m a turnaround pro, so I get called in when a company has some degree of distress—the company may not even know how much distress until we start to dig. If there’s distress, there is neither the appetite nor the resources available to prosecute claims. It’s a potential asset for the company—but they may not have the wherewithal to realize. In the context of bankruptcy, there’s an inability to pay obligations. Litigation funding provides an opportunity to create a level playing field. Companies can recover assets, pursue cases, etc. DP: As you counsel your clients, when do you bring funding into the mix? What’s exciting to you about this structure? TM: I work at a big law firm. Litigation funding and contingency were not really something Big Law firms did—and traditionally don’t do. Five to ten years ago we talked about litigation funding, but only recently have we begun doing these deals in earnest. Our firm is a risk-averse midwestern firm. Litigation funding allows us to bridge the gap between large cases with huge potential recoveries, and the firm’s reluctance to accept that much risk. The sweet spot is a large-damages case, but it will take a long time and be costly. All in all, I’m a fan of litigation funding—we’re grateful for the industry. DP: We talk about plaintiff work—a small guy with a claim as a wronged party. Is that the limit of litigation funding, or are you looking at other things? KE: There is single case funding, and then portfolio case funding where you can fund a law firm, or several contingency cases. There’s also client-side funding, you can provide funding to a trust—which provides a lower risk profile.  DP: There’s been discussion about ethical issues with fee sharing, or confidentiality issues. What are your main ethical concerns? TM: From the perspective of what a funder needs to consider when assessing a deal—from an attorney perspective—attorney-client privilege. When assessing a case, a funder needs to review the underlying documents. While privilege doesn’t attach to discussions with a funder, but funders don’t need to see privileged documents. The laws in that are a bit unsettled. DP: So what safeguards do we take? Sign an NDA. Funders have their own form, which is similar and ironclad, to provide for the common interest. This confirms the intent for documents to be confidential.
Commercial

The Problem with Origination Credit—and How In-House Clients Can Address it

The gender gap in the legal industry is easy to recognize, thanks to Burford’s 2020 Equity Project study. But recognizing the problem is only half the battle. Origination credit continues to be a sticking point—as women consistently receive less than their fair share. This fuels a cycle of inequity that can reverberate through a law firm and beyond. Burford Capital reveals its 2020 Equity Project study surveyed General Counsel and senior in-house lawyers. Of the respondent pool, a staggering 52% had no idea how origination credit was awarded at the firms they utilized. Why does that matter? Because money flows in via those GCs, which gives them considerable power to influence the firms they hire. The problem began when male lawyers inherited clients from their predecessors. Senior male partners mentor male lawyers more often than female lawyers. This leads to female lawyers receiving lower-then-average compensation almost 80% of the time. And 67% of senior female lawyers state that they’ve experienced gender bias that has impacted their business development. The simple act of asking about origination credit can bring needed attention to the issue. More than 150 GCs wrote to their law firms in January of 2019, demanding that they close the gender gap. These included Microsoft and Coca-Cola, among other heavy hitters. That’s a positive step forward—but the progress must be more widespread in order to inspire lasting change. It’s been speculated that more GCs don’t ask about the gender gap or origination credit simply because it doesn’t occur to them. It’s also likely that many law firms don’t share what they consider insider information. If this issue is to be adequately addressed, habitual changes must be implemented.
Commercial

Could Avalanche Overtake DeFi in Crypto Market?

You don’t have to know everything about cryptocurrency to know that it’s changing the  investment landscape in major ways. Avalanche, a competitor to crypto giant Ethereum, enjoyed a robust opening followed by steady gains. Now speculation abounds about how big Avalanche can grow, and who might be edged out in the process. News BTC details that Ethereum’s climbing fees have caused an exodus to Avalanche for blockchain access. Meanwhile, Avalanche is expanding its reach to include Initial Litigation Offerings. Third-party legal finance is a new entry into the cryptocurrency space—one with deep pockets. Litigation Finance, industry-wide, controls roughly $10 billion in assets, most flowing from high-end investors into a more accessible and transparent market. There’s a synchronicity to this development, given that the essence of litigation funding is to level the playing fields in a variety of industries. Avalanche continues to innovate and expand as the company positions itself to overtake industry leaders.
Announcements Commercial

Mill City Ventures completes nearly $8M in first quarter financings

Mill City Ventures III, Ltd. ("Mill City")(OTCQB:MCVT) announced today the total financings for the quarter were nearly $8M. The amount includes a previously announced loans of approximately $2M. Mill City Chief Executive Officer Douglas M. Polinsky stated, "We have continued to be opportunistic in various financings presented to the Company. We have expanded the scope of our loan profiles and have continued to position the Company to achieve higher returns through our ability to perform due diligence quickly and fund in short order.  Presently, we expect our current loan portfolio to drive results unmatched in any other quarter in the Company's 13-year history." The Company completed a litigation funding loan for $1.8M for an adjudicated settlement relating to people harmed by the California wildfires originating from Pacific Gas and Electric power lines that were downed by trees. The opportunity was introduced to the Company by Witnex, Inc., a litigation finance consulting firm that has assisted in the financing of approximately $1B in plaintiff claims. The loan is secured by the future fees anticipated to be collected. In addition, the Company completed a $3M bridge loan to a real estate investment company that owns and manages nearly $500M in apartment buildings in and around college campuses throughout the United States. The Company also made a $510,000 loan secured by an interest in the previously announced $1.3M in settled claims. Finally, the Company completed an additional $200,000 loan to a current borrower, a financial technology company, which designs and develops products and services for the transaction processing industry. We continue to work diligently with NASDAQ to meet applicable listing requirements. Forward-Looking Statements
Forward-looking statements in this release are made pursuant to the "safe harbor'' provisions of the Private Securities Litigation Reform Act of 1995.  These forward-looking statements reflect current beliefs and underlying assumptions, and are subject to risks, uncertainties and other factors that could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements, including without limitation continued demand for short-term specialty non-bank loans, increased levels of competition, new products or offerings introduced by competitors, changes in the market rates of loans, and other risks. About Mill City Ventures III, Ltd.
Founded in 2007, Mill City Ventures III, Ltd., is a specialty finance company providing short-term non-bank lending. Additional information can be found at www.sec.gov. SOURCE Mill City Ventures III, Ltd.
Commercial

Commercial Disputes in Mining

Omni Bridgeway’s most recent podcast features commentary by Junior Surivar of McCarthy Tetrault, and Jon Drummer of Paul Hastings. The episode is part two in a series detailing litigation relating to mining disputes. Geoff Moysa hosts.

Below are some highlights from the podcast:

JS: There’s been a noteworthy spike in disputes addressing the finer points of royalties, where before, most disputes related to shareholders and joint ventures.

GM: Why?

JS: New partners can impact how royalties are seen by everyone. The precise interpretation of royalty agreements can be subject to multiple readings. Any time partners shuffle, there’s a chance that royalty agreements will be reread and reinterpreted.

Royalty agreements are generally entered early in a partnership. As situations change over time, the intention of the original agreement may be lost or changed dramatically. When a new party enters the arrangement, everything changes.

JD: Agreed. Intent versus the written document can lead to multiple interpretations.

GM: How likely is it that these disputes can be solved with negotiation?

JS: When there are differences of opinion or interpretation advanced in good faith, negotiation can go a long way.

JD: Yes, and expedited negotiations fast-tracked for results are common.

GM: What about multiple royalties or layers of objections? Have there been increases in disputes from specialized mining royalties?

JD: Not really. But there are many reasons partners might revisit royalty agreements for reinterpretation. There is a rise in mining royalty companies, which leads to all involved parties looking at the value of their royalties more seriously.

GM: Are disputes arising from M&As?

JD: That’s been a trend, yes. There’s been a rise in cases on environmental issues, as well as health and safety concerns, and others on securities disclosure laws. We expect that to continue.

JS: In Canada, we are seeing that on the environmental issues, but in Ontario, changes to the Class Proceedings Act make it more challenging to certify a class. This leads to funders or plaintiffs being less willing to invest in a class action.

Commercial

Litigation Funding as a Stock Market Alternative

As investors remain wary of the stock market, they’re left wondering how to invest effectively. Litigation Funding may prove an attractive alternative for investors depending on their risk tolerance. Litigation funding is uncorrelated to stock trading, and largely insulated from economic conditions. Business Day explains that litigation funding is a strong choice for investors owing to its high-alpha/low-beta risk-return. As an asset class, litigation funding maintains a global presence. More than half of all international investments in litigation funding comes from the US, UK, and Australia. The global market value of the legal funding industry is believed to be around $100 billion.  One of the most attractive aspects of third-party legal funding as an investment is the asymmetrical return profiles. Essentially, the possible payout is far greater than the possible losses—even if the entire investment is lost in an unfavorable verdict or judgment. Funding agreements between third-party funders and clients are generally non-recourse. So claimants aren’t required to pay funders back if their case is unsuccessful. If the case succeeds, however, funders receive an agreed-upon percentage, an award, or a multiple of the monies provided. Success is not guaranteed, and wait times between investments and payouts can take years. Three to five years is common for a commercial dispute to reach completion. But every suit will eventually conclude with either a judgment or a settlement, thus it is ultimately a binary outcome. Profitability via investments in litigation funding rest largely on vetting cases. Considering the merits is merely the beginning—whether or not a defendant can make good on a judgment should also be heavily considered. What we do know is that demand for litigation funding from clients shows no sign of slowing.
Commercial

Are Plaintiffs at the Mercy of Litigation Funders?

The core benefit of Litigation Finance is clear—to provide increased access to justice to those who could not otherwise afford it. It’s a noble, necessary, and attainable goal. So why the rush to over-legislate the industry? The Australian suggests that lawyers and funders alike are focused solely on profit as plaintiffs fall by the wayside. Foreign investment in Australian litigation finance firms is massive. Some say that currently, legal funding is the most profitable asset class in Australia. Given what COVID is doing to the economy at large—that makes sense. One case, in particular is held as an example of plaintiffs losing out while funders and lawyers rake in profits. Employees of Appco Group Australia were offered a settlement that a judge openly mocked. The 1,172 claimants asked for an estimated $65 million and were instead given $1.9 million—half of which would go to litigation funders. This left less than $1 million to be divided among nearly 1,200 plaintiffs. Courts then had to determine whether to approve the settlement or allow funding to be withdrawn. Justice Michael Lee instructed lawyers to do better by their clients, accusing them of trying to rid themselves of a case that was neither as speedy or profitable as funders and the legal team had hoped. A case against ISG Management claiming that they cheated workers out of sick time and other employee entitlements left claimants in similar straits. A class action morphed into cross-claims against thousands of workers who could now be held liable for overpayments made over many years. Every court case carries risks for defendants and plaintiffs. That’s the nature of litigation. At the end of the day, Litigation Finance needs to be profitable in order to continue helping clients. While there may be some merit in the push for increased legislation, feigning outrage that a business seeks to be profitable doesn’t help anyone.
Consumer

USClaims Becomes a Skyline Partner of the New York State Trial Lawyers Association (NYSTLA)

USClaims is proud to announce that it is now a top sponsor of the New York State Trial Lawyers Association (NYSTLA). With its $100,000 commitment at the Skyline Partner level, USClaims joins with 5-Star Legal Funding to support one of the strongest trial lawyer associations in the country. This momentous partnership furthers USClaims' mission of making Litigation Funding Simplified ™. Donna Lee Jones, President of USClaims, summed up the importance of this partnership:  "Now more than ever, we must support trial lawyers in their never-ending battle of protecting clients' rights.  USClaims recognizes that litigants continually face hurdles in the path to justice.  USClaims is here to help the 3000 trial attorney members of NYSTLA overcome those hurdles."   This strong support for NY trial lawyers was echoed by Robert Gentili, co-founder of 5-Star Legal funding:  "5-Star has always had the passion to help over the past 15 years.  Working together with USClaims, we now have unlimited resources and stand united with NY trial attorneys and their clients."  USClaims is the only litigation funding company committed to NY trial lawyers at the Skyline Partner Level. About USClaims:  USClaims (www.USClaims.com) provides pre-settlement litigation funding nationwide, and has been in continuous operation helping attorneys and their clients since 1996 – the longest of any pre-settlement litigation funding company in the United States.   Its flagship offering is non-recourse financial support to personal injury victims, many of whom have endured tremendous suffering from wrongful conviction, motor vehicle accidents, unsafe premises, medical malpractice, defective products and other wrongful harms.  This financial support provides injured plaintiffs the means to pay their personal bills, including for surgeries, and endure the often long and arduous litigation process.  USClaims also provides specialized lending to personal injury law firms to help them grow their practices.  Through its unparalleled service, USClaims aims to change the perspective of the pre-settlement funding industry and, most importantly, to become a major asset to trial attorneys.   USClaims accomplishes this goal by low rates with no hidden fees, non-compounding rates, a 2x cap on the funded amount, in-house attorney underwriters, and funding within 24 hours of approval.   USClaims has repeatedly been voted one of the best litigation funding companies in the country, and supports trial lawyer associations nationwide.
Commercial

New Zealand Pursues New Regulations for Litigation Finance

As litigation funding grows in popularity in New Zealand, so do calls for legislation. Currently, there are no existing laws in New Zealand that specifically apply to the practice, nor is there a statutory class actions regime. Omni Bridgeway explains that defendants and claimants alike would benefit from more clear and detailed regulations for the industry. New laws could provide guidance and policy directives on common issues impacting collective actions. It would make sense that New Zealand look to Australia for guidance when developing a legislative regime. Providing justices wide latitude during the proceedings and requiring court approval for settlements have worked out well. In Omni Bridgeway’s submission to the Commission, they suggest that New Zealand allow both opt-in and opt-out class actions. A closed class system is generally believed to have advantages to an open-class system. Specifically, it demonstrates that claimants are engaged and serious about the case. This is significant since a common complaint about litigation funding is the fear that funders will pursue nuisance cases that lack merit. Champerty laws exist in New Zealand, though they remain unenforced. Omni Bridgeway listed the idea of abolishing champerty laws, among other proposed changes. These include adding several provisions to the licensing requirements—including minimum capital requirements, standards for disclosure and reporting, and specific requirements regarding conflict management. Funder’s fees remain a contentious issue, with many funders deriding laws that ensure 50% of gross recoveries go directly to claimants as excessive. It’s been suggested that any cap on funder fees could dissuade funders from taking on collective actions. Still, legislators have suggested that this figure is too low and that funders should never get more than 30% of any award in the cases they fund. The position advanced by Omni Bridgeway is echoed by independent research on various regulatory models.
Commercial

A Liquidator’s Guide to Mitigating Risk

Liquidators are sometimes ordered to pay costs, which is not a situation any want to be in. Liquidators have a duty to examine what led up to the liquidation, and to bring and defend a legal case if applicable. But if they lose, costs can be awarded against them personally. LCM Finance details that normally, liquidators are indemnified from having to pay costs. But if the company is unable to do so, the liquidator can be held liable. This has happened in several noteworthy cases. In Lonnex Pty Lit, liquidators were required to pay costs after appeal. The court ruled that the costs incurred were unreasonable and that the liquidators should not be entitled to indemnity. In Australia’s Residential Builder Pty Ltd, a court found that the liquidator pursued an appeal for their own reasons, and not for the good of creditors. As such, the court determined that liquidators cannot hide behind an insolvent company. In Azmac Pty Lit, a court ruled that unreasonable and unnecessary conduct rife with self-interest should result in a liquidator personally paying the costs of proceedings it initiated. What should liquidators do to avoid a similar fate? LCM suggests starting by diligently investigating matters in a timely way. Next, seek out advice from counsel or another experienced professional, or the courts on the advisability of continuing a claim. In addition to full compliance with court rules—that will go a long way in helping liquidators avoid an order to pay costs. Of course, liquidators should estimate all costs and weigh them against the likelihood of recovery. Perhaps most importantly, liquidators should feel ready to settle the claim if it can be done in a reasonable way. Accepting reasonable offers, acknowledging valid disputes, and reasonably assessing assets can do the rest.
Commercial

Claimant Expresses Disappointment over PFAS Settlement

A settlement in a case over PFAS contamination has claimants enraged. In 2015, residents were told by a local newspaper article that their water supply had been tainted by PFAS. The chemical had been used in foam used to combat fires. Not unexpectedly, property values plummeted and local businesses suffered. SBS.com details that people throughout the Williamtown community had been experiencing a spate of health problems believed to be connected to the poisoning. These include increased instances of ovarian, testicular, and breast cancer. The community determined that collective action was the best way forward. Omni Bridgeway (formerly IMF Bentham) funded the case. Shortly after the Williamtown case was announced, similar class actions in Oakey, QLD, and Katherine NT were announced. The Williamtown case took years to reach a settlement. In February 2020, all three lawsuits were settled for $212 million. That may seem like an impressive figure, but only $86 million went to the claimants in the Williamtown case. Of the $86 million, lawyers were paid $9 million for their work. Omni Bridgeway, the case’s funders, received about $21 million. The remaining $55 million was shared among claimants, leaving one defendant, whose house and property are now worthless—$100K. That left some claimants upset and clamoring for legal protection. Others took a more optimistic stance, saying that 36% of something is better than 100% of nothing. It’s easy to understand why some claimants felt disappointed in such a low payout figure, yet it's important to keep in mind that the case never would have made it to court had it not been for the funds provided by a litigation funder.
Commercial

Third-Party Funding and Construction Claims

Third-party legal funding has been in use in the United States, the UK, and Australia for over a decade. Now we see it moving into the Middle East and Asia. This may be illustrated most clearly in the construction field, where cross-jurisdictional cases are now making use of the practice. LCM explains that in recent years, construction disputes have seen a 300% rise in registered cases—even before COVID led to reduced profit margins, late payments, and missed deadlines. Legal funding is making a mark in the construction industry—not just as a means to fund cases, but to turn legal departments into a profitable arm of their respective businesses. Portfolio funding agreements are on the rise in construction, which lowers costs while reducing risk. This type of funding arrangement allows businesses to take the financial risk out of pursuing a valid case by removing those costs from balance sheets, thus generating income with no financial outlay. Several factors are driving the push to expand the reach of legal funding. Singapore and Hong Kong have recently passed legislation that essentially welcomes the practice, while the Dubai International Financial Centre represents the expansion of the arbitration infrastructure. In India and the Middle East, awareness of Litigation Finance is growing. Increasingly, CEOs are using funding as a means of creating liquidity from seemingly dormant legal assets. As the use of portfolio funding agreements grows, some may wonder if single-case funding is on its way out. That seems unlikely. In construction alone, the number of high-value construction cases in the Middle East demonstrates that there will always be a market for funding individual cases. In the Middle East, joint ventures, insolvency, and bankruptcies are already spiking, owing to the impact of COVID. Demand for litigation funding has increased across all claimant types—and that trend is likely to continue.
Commercial

Nanoco Group Optimistic in IP Action Against Samsung

Manchester tech company Nanoco Group has expressed confidence in its legal action against Samsung. The tech business is pursuing a case for IP infringement against the electronics leader. Nanoco has also revealed signing a litigation funding agreement with an as-yet-unnamed American litigation funder. The Business Desk explains that a Markman hearing, also called a claim construction hearing, was held on March 26th. In it, the court was tasked with determining legal definitions of five patents that Nanoco accuses Samsung of infringing. A written report on the hearing is expected to be released prior to June 1st. The Patent Trial and Appeal Board’s anticipated ruling on Samsung’s request for IPR’s is expected next month. This process, which runs parallel to the infringement case, will vet the validity of the patents in question and can take a year if initiated.   A trial date has been set for October of this year.
Commercial

Largest Ever Capital Pricing by Burford

Burford Capital, an AIM-traded litigation funder, priced its PPO of $400 million on Monday. The fundraise is planned for use in the general fund, and is to include repayment of existing debt. Sharecast details that the $400 million pricing was increased by $50 million from what was announced earlier, a change that enables more versatility for investors. CEO Christopher Bogart affirms that this is the largest capital raising in Burford Capital’s history. Notes are being guaranteed on an unsecured basis by subsidiaries Burford Capital plc and Burford Capital Finance LLC. The offering is expected to close on April 5th.
Commercial

Key Takeaways from LFJs Podcast with Elena Rey of Brown Rudnick

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

Mastercard Class Action Claims 46 Million Britons Overcharged

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

The Value of Financial Transparency for Funders

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