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Commercial

Australian Arbitration Week 2020

How exactly is international arbitration changing? The International Arbitration Conference set out to answer that very question. This year’s conference shined a light on how Australia became a favored destination for funded arbitrations around the globe. Omni Bridgeway participated in the event, which was held virtually. One hot topic was how third-party funding is changing international arbitration. In Australia, for example, the government has enacted legislation viewed as too restrictive by some funders. But in Singapore or Hong Kong, rules governing third-party funding have been welcoming to the practice. This lack of uniformity around the world has led to confusion, sometimes leaving meritorious cases unfunded. Other issues discussed included conflicts of interest and disclosure. Increasingly, new legislation requires disclosure of at least some aspects of litigation funding agreements. Some say that increased disclosure will reduce the appearance of conflicts of interest. ACICA Rule 53 is of particular interest because it includes the costs of obtaining legal funding as a recoverable expense. This rule would be especially impactful in Australia, where large class actions against big businesses are common. Cost was another hot topic. Specifically, how legal funding impacts security-for-cost orders. Also discussed was the changing relationships between contingency, conditional fee arrangements, and funding. This included portfolio arrangements and different ways to share risk. This led to a discussion of the newly-formed ILFA, and its push for greater transparency in the industry. Other topics included diversity in the industry, specifically the Arbitral Women diversity initiative. This Brisbane-based group publishes news, facts, and statistics, while engaging in various online diversity initiatives. The ‘Equal Representation in Arbitration’ pledge is a call-to-action and rallying cry. Soon, it will also be a set of guidelines to help corporates and firms pursue diversity in a productive way.
Commercial

Burford Launches on the NYSE

Burford Capital is turning heads with its newly-minted listing on the New York Stock Exchange. This NYSE listing is the first of its kind for a Litigation Funding firm. Business Insider explains that the NYSE listing is a clear sign that this type of legal funding has entered mainstream consciousness. It cements the industry as one that’s here to stay, rather than a temporary fix for trying economic times. Burford specializes in funding legal action against large corporations in exchange for a share of any reward. This type of third-party funding is offered on a non-recourse basis, allowing for different rules than are applied to traditional loans.
Commercial

Work Product Ruling Stymies Google’s Request to See Funding Contract

A California judge ruled this week that a litigation funding agreement between Impact Engine Inc and an unnamed funder is work product and therefore protected by privilege.  Law.com explains that concerns over the relevance of the agreement to a patent infringement suit against Google have been raised by lawyers at Quinn Emanuel. Judge Cathy Ann Bencivengo agreed that the funding agreement may have some impact on the case. This stands true even though Impact Engine’s lawyers did share information with the funders, work-product privilege was never waived. Bencivengo explained that the documents show an expectation from both parties that the information contained would not be released. This case could have far-reaching implications for litigation funders. Rules regarding disclosure remain vague.
Commercial

Africa’s Largest Class Action Targets Anglo American

A case representing roughly 100,000 women and children targets African mining company Anglo American. With litigation funding provided by Augusta Ventures, the case will pursue claims that those living near the Kabwe lead mines were poisoned. Law.com details that South African firm Mbuyisa Moleele and international firm Leigh Day brought the suit against the Anglo American subsidiary, Anglo American South Africa. Those impacted are seeking that the toxic land be cleaned up, that medical screening of children and pregnant women is funded, and financial remuneration. One lawyer involved with the case referred to the situation as an ‘ongoing public health disaster’ brought about by ‘flagrant disregard’ for the community. 
Commercial

Therium Access Named Finalist for ‘Best Pro Bono Initiative’ by The Lawyer Magazine

Therium Access has been named a finalist for ‘best pro bono initiative’ by The Lawyer. The program was launched to provide increased access to justice through investment—providing needed capital to the most vulnerable. Founded in 2009, Therium began as a funder who worked with clients pursuing cases against commercial businesses. It soon became obvious, however, that there were many clients in need of help even though their cases were not against businesses with deep pockets. Co-founder Neil Purslow explains succinctly, “Justice should be available to everyone, but the reality is that it isn’t. This can lead to devastating consequences for families and for the most vulnerable in our society.” He goes on to explain that while lawyers often donate their time, monetary support is also needed to pursue cases—especially those that are large and time-consuming. 
Commercial

Aussie Billionaire Funding Anti-COVID Lockdown Claim

A source has revealed that controversial billionaire Jonathan Munz is funding a challenge to the Victorian government’s recent COVID lockdowns. While not the sole financier, Munz is reportedly sinking at least $1 million into the case. That shouldn’t break the bank, as Munz’s reported assets top $1.5 billion. Sydney Morning Herald reports that two Brisbane court dates have been set to hear the case via video link. The case was filed by Julian Gerner, who owns a popular restaurant and bar. The claim revolves around parts of the Public Health and Wellbeing Act, and the emergency powers it provides. Plaintiffs have suggested that lockdowns are unconstitutional because the constitution implies freedom of movement. A planned defense from Solicitor-General Christine Walker has been postponed. A demurrer is expected to be filed instead. This means that while the constitution may affirm a right to freedom of movement, that is immaterial to the lockdown provisions and the government’s right to impose them. The resolution of this case may determine whether the Public Health and Wellbeing Act is rendered invalid. If that were to happen, a government’s ability to protect citizens during emergencies will be effectively crippled. A separate claim has been filed by Michelle Loielo as of September. She is a restauranteur and is reportedly an aspiring liberal politician. Further submissions are expected to be made to the High Court later this week.
Commercial

Roundtable Discusses Litigation Finance in Offshore Jurisdictions

The use of legal finance is increasing in several important offshore jurisdictions. But how well is that going? Burford Capital’s recent roundtable discusses the effectiveness of legal finance in maximizing recovery in insolvency cases around the globe. Burford’s panel includes Matthew Richardson, director at Grant Thornton (BVI), Ulrich Payne, lawyer at Kobre & Kim, and Ian Lambert, head of litigation, restructuring, and insolvency at HSM. Lambert explains that as always, the purpose of Litigation Finance is to increase access to justice. Legal funding allows for the pursuit of meritorious cases that might otherwise not be possible. This is of particular importance in the wake of COVID-19. Ulrich Payne further notes that liquidators now have a set precedent allowing them to enter into litigation finance agreements—thanks to two recent cases in the Grand Court of the Cayman Islands. What about the overall dearth of case law regarding litigation funding and insolvency? Richardson details that the British Virgin Islands has not heavily relied upon legal funding in insolvency cases. He explains that in his firm, most creditors and shareholders have the funds needed to pursue their case without additional funding. A proposed ‘Private Funding of Legal Services Bill’ is underway, and is expected to clarify specific issues relating to legal funding--such as appropriate rates of return or whether or not funders should have a say in decisions impacting the case. Without additional clarification from BVI courts, British law is the prevailing standard. Ian Lambert details his concern that the bill’s progress is slow, and that overzealous restrictions could make it more difficult for those with legitimate need. Payne sums up the situation, saying that the bill, if passed, would lead to sweeping changes in how litigation funding is addressed and managed in the Cayman Islands. The hope is that the changes will improve access to justice, rather than restrict it.
Announcements Commercial

ANGLO AMERICAN SUED ON BEHALF OF CHILDREN AND WOMEN POISONED BY THE WORLD’S BIGGEST TOXIC LEAD MINE

Lawyers from Mbuyisa Moleele and Leigh Day today announced that a class action lawsuit has been filed against Anglo American South Africa Limited (“AASA”), a subsidiary of London-headquartered multinational mining company Anglo American Plc (LSE: AAL, JSE: AGL), in the Gauteng Division of the High Court of South Africa. The action has been filed on behalf of a class estimated to comprise more than100,000 individuals in the Kabwe District of Zambia who are believed to have been poisoned by lead. The application is brought by 13 representative plaintiffs on behalf of children under 18, and girlsand women who have been or may become pregnant in the future. The claimants – principally young children – are suffering from alarming levels of lead poisoning which, depending on various factors including the blood lead level (“BLL”), causes a range of significant conditions, from psychological, intellectual and behavioural damage to serious and permanent physical damage to their bodily organs, neurological systems and fertility. In extreme cases, serious brain damage and deaths occur. In pregnant women, lead they ingested as children is absorbed into their bones and released during pregnancy. Women are also exposed to lead during pregnancy from the surrounding environment. Lead is known to cross the placenta, resulting in the unborn child being subjected to the same concentration of lead as the mother. Notonly can the baby’s health be damaged, lead causes pregnant women to have a higher risk of pre-eclampsia; gestational hypertension and miscarriage. Generations of children have been poisoned by the operations of the Kabwe mine, originally known as Broken Hill, which caused widespread contamination of the soil, dust, water, and vegetation. The main sources of this poisonous lead were from the smelter, ore processing and tailings dumps. The BLLs of the vast majority of children in Kabwe exceed the BLL limit of 5 micrograms per decilitre set by the U.S. Center forDisease Control. A substantial proportion of the children have BLLs in excess of 45 ug/dl, the limit at which medical treatment is required. There are numerous cases of young children (including among the representative plaintiffs) with BLLs in excess of 100 ug/dl, at which serious brain damage and death may occur. The Kabwe mine was part of AASA group from 1925 until 1974 and was one of the world’s most productive lead mines during this time. It is alleged in the class action that AASA is liable, including for the following, because of AASA’s role in controlling, managing, supervising and advising on the technical, medical and safety aspects of the mine’s operations:
  1. a) Substantial emissions of lead into the local environment were due to deficiencies in the design and systems of operation and control of lead, which AASA failed to ensure were rectified;
  2. b) AASA failed to ensure the clean-up of the communities’ contaminated land; and
  3. c) Accordingtoexperts1, aroundtwothirds of the leadcurrently inthe local environment is likely to have been deposited there between 1925 and 1974 when the mining operation was transferred to ZCCM, a Zambian state-owned company, in 1974.
The class action seeks to pursue remedies in the form of compensation for these children, as well as girls and women with lead poisoning who have or may become pregnant in the future. Also sought is (a) blood lead screening for children and pregnant women in Kabwe, and (b) clean up and remediation of the area to ensure the health of future generations of children and pregnant women is not jeopardised. Richard Meeran, Partner & Head of the International Department at Leigh Day, said: “From the 1950s, Anglo American publicly committed to making a lasting contribution to communities in which it operated. Its current human rights policy is to contribute to remediation when its business has contributed to adverse human rights impacts. This ongoing public health disaster is the result of a flagrant disregard for the health of the local community, which is totally at odds with those grand public pronouncements.” Zanele Mbuyisa, Partner at Mbuyisa Moleele, added: “AASA is considered amining giant that has been instrumental inbuilding theeconomies ofvarious countries, but it also has to be acknowledged that their operations have caused the decimation of communities and long-lasting damage to the health of those communities.” Mbuyisa Moleele is a Johannesburg-based law firm led by Zanele Mbuyisa, and Leigh Day is a leading international law firm specialising in human rights and mass environmental tort claims. Both firms have a proven track record of litigating complex international class actions on behalf of victims from disadvantaged backgrounds. The case is being funded by Augusta Ventures, the UK’s largest litigation fund by volume of claims. More information about this matter can be found at www.childrenofkabwe.com.
Commercial

Law Firms and In-House Counsel Predict Spike in Litigation Funding

A recent study of in-house counsel and private attorneys affirms that the use of litigation funding is up more than 100% since 2017. Burford Capital released the study of roughly 500 legal professionals, which confirms the explosive popularity of the practice. Law.com explains that in-house counsel respondents are reporting tens of millions in unenforced judgments. Using legal finance to turn dormant value into liquid assets makes sense, especially when economic conditions necessitate savvy bookkeeping. Strikingly, over half of lawyers surveyed stated that their companies have abandoned solid claims because of potential litigation costs. This means that a need for third-party funding is widespread and ongoing, especially as pricing options dwindle in the wake of COVID. In the coming months, it’s clear that risk-sharing will be the order of the day.
Commercial

Burford Capital Makes NYSE Debut

Law firms and businesses alike are making even greater use of Litigation Finance in the wake of COVID. That’s good news for Burford Capital, whose listing on the New York Stock Exchange went live this week. Recent reporting on the popularity of the practice, combined with this new NYSE listing and the formation of the ILFA, makes it clear that litigation funding is on the rise. Westlaw explains that the NYSE listing represents an important milestone for Burford, indicating a company that has grown by leaps and bounds in the last decade. The industry is growing and adapting as well. The International Legal Finance Association is a newly formed coalition of funders that now has over a dozen members. David Perla, co-COO at Burford, explains that the term ‘legal finance’ might be more accurate than ‘litigation finance,’ as the practice has become more versatile in recent years. When asked about the Muddy Waters short-selling attack, Perla affirmed that a listing on the NYSE was the best answer to that question.
Commercial

Stolen Wages Lawsuit Filed by Indigenous Workers in Western Australia

As many as 8,000 people are believed to have been directly impacted by Western Australia’s practice of kidnapping and enslaving children in the 1940s and beyond. A class action has been filed to collect wages that were never paid to the workers. So far, at least 1,000 of those affected have registered their intent to seek remuneration. News.com AU explains that the stolen children were forced to work the mines in unbearable conditions, without proper equipment, wages, or proper food. Workers are represented in the case by Shine Lawyers, who received litigation funding from Litigation Lending Services. Litigation Lending funded a similar case in 2019 that settled for $190 million. Jan Sadler, head of class actions at Shine, explains that while the harm done cannot be erased with money, workers deserve compensation for the inhumane treatment they endured. The case is expected to go through mediation. The WA government appears to appreciate and acknowledge the effect that government policies have had on Aboriginal people.
Commercial

Maximizing Liquidity Through Litigation Portfolios

The COVID pandemic has led to the need for creativity, quick thinking, and adaptability for many legal firms. Roughly half of all firms and in-house counsel alike are expecting drops in revenues (and consequently, budgets) within the next year. But this doesn’t have to be dire news. Burford Capital explains that while things may look bleak, many firms and companies have legal assets that they aren’t looking at. Savvy GCs know to identify assets and find ways to maximize their value. Legal finance is one way to heighten liquidity while reducing the risk associated with taking on new cases in uncertain times. A recent legal finance report shows that more than half of in-house counsel affirms that their companies have ignored meritorious claims for financial reasons. Some GCs even support this. But offloading both costs and risks onto a third-party funder can transform a struggling legal department into a profit generator. Monetizing pending claims to generate liquidity is a smart move for businesses and law firms alike. As many as ¾ of in-house counsel cite liquidity as one of the main benefits of using legal funding. Other benefits include: --Non-recourse nature of the funds. This eliminates risk and adds certainty to budgets. --Accelerate incoming cashflow. Rather than waiting years for a case to be resolved, legal funding brings cash in without delay. --Experienced legal funders can help assess risk and pinpoint the most profitable cases and highest potential returns. --Maintaining control of cases can be a worry to those who are new to Litigation Finance. But third-party funders do not supersede the client or attorneys when it comes to making decisions about the case at hand. --Options. Funding allows clients to choose from a wider pool of attorneys without worrying about who is willing to work on contingency—or about cost in general.
Announcements Consumer

CONSUMER LITIGATION FUNDING: THE BASICS, CURRENT REGULATORY, ETHICAL, AND CONFIDENTIALITY ISSUES.

On November 16, 2020 at 1 PM Eastern, the American Bar Association’s Center for Professional Responsibility will present a 60-minute CLE webinar on consumer litigation funding. The presenters are Anthony Sebok, Professor of Law, Benjamin N. Cardozo School of Law; Ronnie Mabra, the Mabra Firm; and Eric Schuller, President, Alliance For Responsible Consumer Legal Funding (ARC). They will discuss the history and structure of the market and the ethical rules at issue with moderator Lucian T. Pera, a partner in Adams and Reese LLP. The conversation will also explore ABA Resolution 111A addressing best practices for third-party litigation funding.  ARC has separately adopted their own best practices some of which mirror the ABA’s Resolution 111A. To find out more and how to register click here
Commercial Covid-19

COVID Litigation in Europe

Even before the pandemic gained a foothold, European courts felt the impact of COVID. Litigation over insurance, safety precautions, employment, and business interruption was rampant. Such litigation is only expected to grow—even after COVID is under control. Law.com International explains that disputes in France, Netherlands, and Germany all bear close examination. In France, for example, businesses were besieged by lawsuits almost immediately. Amazon, Airbus, and multiple companies that stayed open during lockdown were accused of not properly protecting employees’ safety. In France, employers are under more pressure to treat employees fairly. Parisian employment partner Emmanuelle Rivez-Domont explains that at the end of the day, it’s simply not feasible to keep everyone happy. But employers should still be held to the highest standards. Shockingly, many parties in France decided to remove COVID-related effects from the legal definition of force majeure. This is a heavy blow to those impacted, who were counting on their insurers to make good. In the Netherlands, everyone from insurers to event organizers are taking steps to test the waters. One hospitality industry group sought to vacate or relax social distancing in restaurants and bars. A judge denied the request, affirming that the government is allowed to make even drastic choices in the public’s best interests. Insurance had been a straight-forward matter in the Netherlands until COVID. Now cases are plentiful, leading to four insurers losing a claim over cancellation payouts due to COVID. As in the rest of the world, insurers may need to brace for impact as claimants use legal means to seek what they’re owed. In Germany, a “klagewelle” or ‘litigation wave’ is on the horizon. Germany’s lockdowns included bars and restaurants, hotels, clubs, and theaters—all of which led to industry-wide losses in the tens of billions. It’s only now that these businesses are learning that their insurance doesn’t cover loss of business due to a pandemic.
Commercial

Eni Attacks Third Party Funders in Nigerian Oil Claim

Italian energy giant Eni has requested documents relating to a $1 billion case involving the government of Nigeria and investment firm Drumcliffe—the principles of which are still involved in a corruption trial. Bloomberg News details that this is just the latest facet of an ongoing dispute which puts two prominent energy companies against Africa’s largest producer of crude oil. In this most recent claim, Eni holds that the Nigerian government is influenced by interests that they have not publicly disclosed. To support this claim, Eni is seeking documents from Drumcliffe Partners LLC. Eni now claims that the Nigerian government is in league with third parties who are attempting to reap “illicit” profits. This is a common complaint against third-party litigation funders and is often brought up by parties who have much to lose if the opposition is well-funded. Jim Little of Drumcliffe was unimpressed by the accusations, saying that Drumcliffe looks forward to discrediting the accusations, which he called ‘wild innuendo.’ Nigerian media published the funding agreement with Drumcliffe, which revealed Drumcliffe taking a potential share of 35%. Not uncommon in non-recourse funding agreements. Nigeria has joined the case as a civil party. They are also asserting that both Eni and Shell owe a penalty of $1.1 billion. Still, both companies have denied the charges, affirming that their agreements with the government of Nigeria are legitimate. Also denying wrongdoing are Eni CEOs Claudio Descalzi and Paolo Scaroni. The court is expected to rule later this year.
Commercial

Third-Party Funding Disclosures in Court—What’s at Stake?

As Litigation Finance permeates the mainstream and regulation catches up, the issue of disclosure remains contentious. At the time that a funding deal is created, there’s no real way to know whether or not courts will require disclosure of the agreement. Bloomberg Law explains that typically, this type of disclosure is not required by the courts. Funding, most judges rule, is not materially relevant. That said, determinations regarding disclosure are decided on a case-by-case basis. A recent survey on Litigation Finance shows that while legal professionals are feeling unsure—there’s nothing to suggest that disclosure will not be compelled in most instances. Recently, there have been several cases requiring disclosure of funding terms, but so far they’re few and far between.
Commercial

The Rush to Secure Funding by Year’s End

As 2020 nears its end, firms are straining to reduce the impact of Coronavirus on earnings—which for some means cutting staff even as they ensure that their best players won’t be recruited by other firms. Given that, it makes sense that firms holding strong litigation portfolios would want to consider dispute financing. Omni Bridgeway details that those who want to monetize their portfolio should not wait to get started. Portfolio funding arrangements are often large, detailed, and complex. Doing them well takes time. Waiting until December is risky, and can result in deals not being finalized by year’s end. However, beginning the process a few weeks earlier allows time to conduct due diligence, allowing funders to examine the cases in the portfolio while assessing risks against potential rewards. For many firms, portfolio funding carries less risk than funding individual cases. Overall, it allows firms to take more risks in terms of contingency casework—because the firm shares risk with funders. Non-recourse capital is provided and used to cover costs and fees, and can even be used to cover operational expenses in some circumstances. Awards are shared among plaintiffs, firms, and funders. The non-recourse nature of funding means that even if the entire portfolio is resolved unsuccessfully, the firm is not obligated to repay the funding. Dispute funding has many benefits to firms and partners—such as providing firms the ability to pay partner draws despite COVID-related losses. Funding can offer immediate cash flow when it’s needed most. Funding also gives firms more leeway in client selection and agreements. Contingency cases in particular become more viable with the inclusion of litigation funding. This means a larger pool of potential clients and cases. The advantages brought by funding provide an edge that could be used to expand staff and even recruit a rainmaker or two.
Commercial

Nanoco Shows Major Losses, Extends Cash Runway

A recent announcement from Nanoco reveals a sharp tumble in revenue. The Manchester-based tech business reported that revenue fell from GBP 7.132 million to GBP 3.856 million in the period ending July of this year. The Business Desk reports that despite these setbacks, Nanoco has managed to extend its cash runway to December of 2022. It’s hoped that this extension will allow the company to rebuild value. In July of this year, GBP 3.4 million was raised in a patent lawsuit against tech giant Samsung—thanks to support from a third-party litigation funder. A company-wide restructure is underway, which ultimately reduced monthly outlays by roughly 50%. Nanoco’s chairman, Dr. Christopher Richards, affirms that this year has been one of substantial change.
Commercial

Litigation Finance Pro Gian Kull Hired by SYZ Capital

Gian Kull has been appointed head of special situations at SYZ Capital. His investment experience spans more than a decade, making him an excellent choice to manage portfolios and handle private marketing investments. Wealth Adviser details that Kull’s past experience includes structured litigation investments at Multiplicity Partners AG, director of sourcing at Valtegra LLP, as well as opening a European office in Zurich for Brigade Capital Management. He began his career at Merrill Lynch as a research analyst. CEO of SYZ Capital, Marc Syz, explains that Kull’s contribution to the team will center on his expertise in private market investments, sourcing niche investments, and in portfolio construction. His experience with structuring litigation investments will be a boon to the team. As an investment, litigation funding is uncorrelated to the rest of the market. Kull’s expertise will be used to identify opportunities to find ways to generate capital within structural imbalances, specific niche access, or utilizing obscure information effectively.
Commercial Covid-19

Litigation Finance Evolves Through COVID and Beyond

It could be argued that Burford Capital is handling the pandemic better than most. The company transitioned to a remote working platform early on, and have adapted to what’s being called “the new normal” with aplomb. In the months that followed, courts, businesses, and even schools shifted to remote operations—meaning court cases could finally continue. Burford Capital explains that the importance of legal finance has only grown in the era of COVID. Litigation funding can make it possible for class actions, or any meritorious action, to proceed with help from investors. As the legal world forges ahead, there are three specific developments in the industry that all lawyers should be aware of. Solutions in legal finance. The idea of solutions, as opposed to mere transactions, is essential to understanding Litigation Finance. The process offers choices—far more than a simple loan/repayment structure. Litigation funding offers opportunity, peace of mind, and expertise to all parties involved. What’s more, experienced funders will provide an array of options that address specific client needs and concerns. The best funders offer more than funds, they offer years of industry knowledge and tech-fueled insights. The International Legal Finance Association. This organization recently launched as a way to protect the industry from overzealous regulation. It also informs the public about the benefits of litigation funding and does so with transparency and clarity. Welcoming the ILFA as a valuable resource is the right move for businesses, financial institutions, and legal professionals. Corporate partnerships. These are a vital part of what Burford does, especially now that interest in Litigation Finance has exploded. Because Burford is a publicly-traded company (currently on AIM, soon NYSE) functioning with obvious transparency, they’re a strong choice for in-house legal teams or finance departments that demand predictable capital and unparalleled compliance. Now that settlement activity is on the rise, and courts are slowly getting back up to speed—a relationship with an experienced funder is more vital than ever.
Commercial Covid-19

Litigation Funders Find Fewer Sure Bets Due to COVID

One of the most attractive aspects of Litigation Finance as an investment is that it’s uncorrelated with the rest of the market. Even as the Coronavirus pandemic became increasingly impactful, funders assured investors that returns would remain high. Bloomberg Law explains that while investment opportunities in Litigation Finance are plentiful, it hasn’t become the big money generator that legal professionals anticipated. Insurance disputes make up a large percentage of new litigation since the pandemic began. While these cases are plentiful, they don’t offer investors the kind of certainty they’re looking for. Rather than seeing nuclear verdicts in favor of plaintiffs, a number of significant rulings have come down in favor of insurers. This has led to even more caution among investors. Burford Capital, one of the largest funders, endured a sharp decline in business in the first part of this year. At the same time, Burford had a smaller cash outlay this year due to fewer new cases and ongoing court delays. Burford’s Christopher Bogart has stated that it’s impossible to know with certainty what’s coming. Speculation changes every week. In contrast, Ralph Sutton of Validity Finance, is encouraged by the 40% increase in investment opportunity his firm has shown this year.
Commercial

Claim Dismissed Against Russian Oligarch Over Superyacht

A claim of over $115 million in damages, filed by Russian oligarch Farkhad Akhmedov (along with owner Straight Establishment) has been dismissed by the high court of Dubai. The claim revolved around a 115-meter superyacht, the MV Luna, which had been held as part of a divorce settlement. The National details that Mr. Akhmedov sought to recover lost earnings he would have made had he been able to charter the superyacht. However, this contradicted Akhmedov’s earlier assertion that the boat was not a commercial vessel and was not being used as a means to profit. The dismissal is considered a final decision by the courts and is not subject to appeal. The former Mrs. Akhmedova’s case was funded by Burford Capital. Akhmedov’s claim for damages was brought specifically to prevent Akhmedova and Burford representatives from taking possession of the MV Luna. However, the court prevented Akhmedova from taking the yacht—which means that this recent dismissal is a hollow victory. The ongoing injunctions mean that the superyacht is still in Port Rashid while proceedings continue to determine its rightful owner. To date, it has been in dry dock for two years—since London’s high court ruled that Akhmedov must pay 40% of his fortune to his ex-wife.
Commercial

Polish Government Sought for Arbitration in Coal Mine Action

Australian coal giant Prairie Mining has begun international arbitration proceedings that assert a breach of bilateral treaties. The action centers around Poland’s decision to block investment in the Jan Karski and Debiensko mines. The Economic Times reports that Prairie Mining secured roughly $12 million from a litigation funder in July of this year. Still, the company stated it is willing to engage in good faith discussions to resolve the dispute. As yet, the Polish government has opted not to engage. Exact amounts sought in the action have not been released. It’s unclear whether purported losses will include lost profits, damages, costs spent developing the mines, and costs associated with arbitration.
Commercial

ABA Best Practices for Litigation Finance Have Mixed Reception

When Litigation Finance was still making a name for itself, the American Bar Association was among the first organizations to write researched commentary on it. The white paper published by the ACA Commission on Ethics remains influential today. Above the Law details that simply publishing a best practices guide legitimizes Litigation Finance and affirms its widespread importance and acceptance. According to the introduction, the best practices guide is just that—guidance. It details what it considers to be the most pressing issues to consider before utilizing litigation funding for any of its most common purposes. Much of what can be found in ABA’s best practices guide is already standard operating procedure in many firms. For example, funders staying out of material decisions regarding the cases they fund is typical. Being aware of responsibilities regarding privilege, safe document handling, and the construction of litigation funding agreements are all commonplace. Some have suggested that the recommendations in the guide are too conservative and do not factor in current trends or commercial realities. For example, the guide cautions against lawyers and funders discussing the viability of a case. It’s outlandish to think such a thing wouldn’t be discussed, or that it would be in any way inappropriate to do so. Investors require information in order to make sound investment decisions, and the merits of a case are certainly relevant to that. One thing the ABA guide does well is differentiate the different types of Litigation Finance currently in use—client funding versus lawyer funding, for example. As the industry adapts to changing circumstances, these distinctions will grow in relevance. It also advises that lawyers presume that litigation funding agreements will be made public. This is not always true, but specific types of arbitration require it. Overall, the guideline recommendations are expected to lend legitimacy to an already entrenched part of the legal world.
Commercial

Key Takeaways from LFJ’s Q3 Roundup on the State of the Commercial Litigation Funding Industry

On Wednesday October 7th, Litigation Finance Journal hosted a quarterly roundup on the major issues impacting the commercial litigation funding industry. The 45-minute panel discussion was moderated by Ed Truant, founder of Slingshot Capital. Panelists included Jim Batson, Senior Investment Manager of Omni Bridgeway, Nick Pontt, Managing Director of Affiniti Finance, Mick Smith, founder of Almatura, and Paul Haskel, partner at Richards, Kibbe & Orbe, LLP. Below are some key takeaways from the event: Ed Truant: On the issue of Burford's dual listing, is this about providing the US market with an option to invest in litigation finance, with the benefit of improving Burford’s stock price, post-Muddy Waters? And given the Muddy Waters issue, is a dual listing in the more litigious US market a good move? Paul Haskel: I should say first that I don’t represent Burford and I have not spoken to anyone at Burford about this. I think my view is that in some sense this is a response to the Muddy Waters short selling incident that occurred to them. I guess in the fall or the spring, that as a retort to Muddy Waters, they’re saying we’re going to be transparent, we’re going to be much more transparent than we’ve been historically. No more sort of black boxes which is what Muddy Waters has complained about. And we’re going to be very open, we’re going to have quarterly SEC filings, far beyond what was required by them for their AIM listing. Part of it may also be a marketing ploy, so it may be that customers looking for funding, many of which, may feel more comfortable coming from a public company that’s subject to public disclosure. Obviously, it provides liquidity to their investors, but I do point out that it also provides liquidity to short sellers as well, which is interesting. Mick Smith: Like Paul, I haven’t had the inside scoop from anyone at Burford about what was driving the listing, but in my experience you’ve got to go to the US market because it’s probably the deepest capital market around. So you have to assume that Chris is seeking a US listing because it gives them access to more capital and they’ve always been interested in raising money from different pools of capital, so this seems like a logical extension to the biggest capital market of all.  Ed Truant: IMF Bentham at the time, made a big acquisition of Omni Bridgeway, and so probably no one better suited to this question than Jim. Jim, maybe you can give us some insights in terms of the strategic compulsion to do the acquisition. How has the acquisition benefitted formerly IMF, now Omni more broadly, and have there been benefits both ways to this merger?  Jim Batson: We really do view it as a merger whether or not it’s technically considered an acquisition. Yes, the first obvious benefit was the geographic scope that the company now has, so with the merger we have 18 offices in 10 different countries. And if you think about how litigation has gotten so global, and the litigation finance industry really needs to adapt to that. We want to be able to serve corporations that are international in scope and also law firms in the same respect, but also when we’re working with corporations that have offices in multiple jurisdictions, the lay of the land in each particular region is different. And being sensitive to that, we’re doing more than just providing a single product and providing it globally, but rather we're able to provide litigation finance solutions in all these different regions that have very unique attributes. The class action regime in Australia is very different from that in the US, and yet we support it very heavily in Australia and through law firm portfolios here in the US. By the same token, we’ve got offices now in Singapore and Hong Kong, where international arbitration is becoming more and more popular and readily accepted, and litigation finance is becoming readily accepted in the international arbitration sphere.  The second sort of big picture benefit that it provided was giving us a comprehensive beginning-to-end support for litigants and lawyers and corporations in the litigation finance sphere. Ed Truant: What about the surging demand for portfolio funding? Paul, is that something you’ve noticed in the marketplace as COVID struck? Paul Haskel: Will there be litigation specifically related to COVID? I’m not sure we’ve seen a flood of business interruption insurance or business interruption litigation yet. But I do think that law firms have become increasingly accepting of litigation finance as being a source of not just financing but actually their ability to get more work, because it’s just generally becoming more accepted. And I think the fear of COVID and the slowdown has driven many firms to seek that type of financing, and where previously they had contingency work, were comfortable just simply waiting to get paid, they’re seeing an advantage of accelerating that capitalization from that work. So I do think there’s been increased demand from law firms that we’re seeing. I also am seeing a trend where some of the big New York corporate firms, which traditionally might have stayed away from this type of arrangement, have started doing a little more contingency work to boost profits, so that does lend itself to litigation financing. So yes, it’s definitely a trend we’re seeing in the market. Ed Truant: From the panelists perspective, what do you think should be the first course of action for the ILFA? Jim Baston: It’s really not so much that litigation funders have been objecting to regulation as a concept. The problem has been more, ‘Who’s supporting it?’ and ‘What type of regulation are we talking about?’ and so forth. I’ve always thought it was ironic that the Chamber of Commerce purports to want to increase regulation and to minimize the use of litigation finance, when at the end of the day, some of their members are the biggest users of litigation finance—and it really is to the detriment of the smaller companies. Paul: I think it’s a great idea, the ILFA. It is an industry that is unregulated, trying to prevent regulation. It has a “bad reputation” among some, and I think the need to have an organization that can lobby for the asset class, be an advocate for the asset class, perhaps come up with best practices and codes of conduct to prevent outside regulation and to work with regulators which I think is a great step.
Announcements Commercial

Apex Litigation Finance brings Artificial Intelligence development in-house to drive funding activity and further promote access to justice

Apex Litigation Finance (Apex) has today announced that it has cemented its position in the legal technology space by bringing its Artificial Intelligence (AI) capacity inhouse, building on an already innovative approach to case outcome predictive analytics. The deployment of AI is enabling the company to speed up the delivery of litigation funding to its client base of solicitors, liquidators, individuals and corporates. Apex now have the means to fully control the development of AI technology to meet evolving requirements. The company believe this will greatly enhance the predictive analysis of risks and outcomes and increase its success in selecting which cases to fund. The move to in-house technology follows a successful relationship with legal AI specialist CourtQuant, which saw Apex fully test and scope the capacity of AI tools in the litigation funding space. The inhouse solution will build on this experience and expertise, whilst creating value for Apex by building a best in class database The AI development will be supervised by project manager Lukas Ruttkay, who brings extensive experience of tech project leadership and AI development to the company, having brought three successful online ventures to market. Commenting on the move, Maurice Power, Apex CEO, said: “We are excited to bring the AI inhouse. Our development of AI will further inform our decision making, offer greater value funding solutions to clients, and provide comfort for investors. I am confident this capability will ensure that Apex maintains its position as a market leader in the sector.” Apex specialises in providing funding for small to medium-sized matters where litigants may not have the means to pursue meritorious claims. Legal and other costs associated with a claim are funded, in return for an agreed share of any successful outcome. If there is no recovery, or if the claim is lost, there is nothing to repay as Apex offers non-recourse funding, taking on all the risk to protect claimants. About Apex Litigation Funding Apex Litigation Finance Limited brings together experts from the legal, technology and finance sectors to provide third party litigation funding to litigants (corporates, liquidators and individuals) who are unable to pursue a claim due to the prohibitive cost of litigation. As a professional litigation funder, Apex makes available funds to pay legal and other costs associated with a claim in return for an agreed share of any successful return. If the claim is lost, there is nothing to repay. The process is augmented by artificial intelligence systems to assess risk. Apex’s service addresses the issue of claims, that may have merits, not proceeding due to uncertainty over costs and the potential risk of being ordered to pay the defendant’s cost, should the claim be unsuccessful. Apex promotes its service as enabling access to justice for all, not just those with deep pockets.
Commercial

Legal Finance as a Path to Corporate Trust Recovery

The rise in bankruptcies and business insolvencies due to COVID cannot be denied. One side effect of this involves the exploration of how best to facilitate recovery and refinancing. Ultimately, legal funding may provide the best risk/reward ratio. Burford Capital’s recent roundtable discussion parses out how these developments are affecting the industry. With regard to bankruptcy litigation, it’s clear that all parties are growing more assertive in protecting their interests. This means assets are being locked down sooner, and assets that should go to creditors are being siphoned. The increase in bankruptcy litigation also means an increase in the use of Litigation Finance. In the context of bankruptcy, legal finance is straightforward. A funder pays the legal fees and expenses associated with the case. If the case ends favorably, the funder would be refunded along with an agreed-upon percentage of the recovery. If the case isn’t successful, the non-recourse nature of funding means they lose their investment. Can legal finance be used as a business development tool? Legal funding for bankruptcy offers a viable alternative to contingency arrangements. This gives trustees more freedom in selecting bankruptcy lawyers without having to dip into estate funds. Some would say that trustees now have an obligation to investigate legal finance options in their cases. Part of acting in the best interest of creditors is to make the savviest financial decisions. In many cases, legal finance is more cost-effective than hiring counsel on a contingency basis, and can offer a tactical advantage, as it displays to the opposition that the claimants are financially capable of seeing a case to completion.
Commercial

IAG Class Action Settlement Tops $138 Million

A settlement in the IAG class action is currently under review after preliminary hearings. The proposed $138 million settlement comes after the company was ordered by ASIC to refund customers for add-on products that were essentially without value. Insurance News explains that the class action was brought regarding six add-on products impacting 673,000 unique transactions by hundreds of thousands of policyholders. Last year, IAG asserted that the case could involve sums of up to a billion dollars during a hearing on the litigation funding arrangements. Balance Legal Capital funded the action, which ultimately allowed litigants to recoup much of their financial losses.
Commercial

Litigation Funding Opportunities are Here to Stay

It’s no secret that when the economy is tough, litigation increases. As the CEO of LexShares, Jay Greenberg, explains--even those who don’t normally use litigation funding are reaching out. Businesses are more anxious than ever to collateralize existing lawsuits and take steps to ensure that any impending claims can be litigated effectively. Alpha Week details that both investor interest in litigation funding and inquiries by potential plaintiffs are on the rise. Earlier this year, the market saw drops in both bonds and equities, yet investments in litigation funding were unaffected, as they only correlate to cases. At the same time, the ROI of lit fin is dependent on making savvy choices backed up by solid underwriting and extensive legal expertise. Former litigators often make the most effective underwriters, as they have the most intricate understanding of the legal process and are best able to parse the risks inherent to a given case. Ideally, an investment in litigation finance requires vetting the merits of each individual case, and/or taking on a diverse array of cases that ultimately diversify risk. Jay Greenberg details that while litigation funding has gained traction during COVID, the opportunities it presents aren’t going anywhere any time soon. While public data isn’t made available on funding overall, the filing of new commercial cases was down from last year. This may mean that litigation funding has barely made a dent thus far—and that opportunities for funding are only expected to rise.
Announcements Consumer

Multi Funding Is Named Preferred Litigation Finance Provider for Total Trial Solutions

Woodstock, NY—October 6, 2020 —Multi Funding, a leading provider of pre-settlement funding serving law firms and attorneys, has been selected as the preferred litigation funding partner for Total Trial Solutions. A provider of comprehensive litigation support services, Total Trial Solutions will offer Multi Funding’s cloud-based litigation finance services to its extensive client base of law firms and attorneys across the United States. Headquartered in Woodstock, New York, and with an office in Lynbrook, New York, Multi Funding offers the legal community proven, fast, and reliable pre-settlement and other litigation financing solutions. Established in 2007, Multi Funding is recognized by its clients for maintaining a high standard of excellence, and is one of the few providers in the industry to earn coveted NMLS (Nationwide Mortgage Licensing System) certification. Through its advanced technology, attorneys can easily apply for litigation financing on Multi Funding’s secure website. Within minutes, attorneys can leverage the company’s full capabilities, such as automated workflows, instant notifications, document management, reporting, and funding updates. Multi Funding eliminates the manual tasks associated with funding, and provides litigants with much needed financial resources during the pre-settlement phase of their trials. In many instances, Multi Funding’s resources can change the trajectory of a case by giving plaintiffs the leverage to weather the longer negotiation periods that are often required to maximize results. “We are very pleased to partner with Total Trial Solutions and bring Multi Funding’s proven services to its network of law firms and practitioners. These attorneys recognize that access to pre-settlement funding can make the difference between accepting a quick, diminished settlement or pursuing a case to full value,” explained Michelle Fuoco, Multi Funding’s chief financial officer. “We are confident that the organizations that access our services through Total Trial Solutions will be very pleased with their results.” Based in Kingston, New York, Total Trial Solutions has provided resources for 8,000 cases, and has helped attorneys recover hundreds of millions of dollars for their clients. The company provides a wide range of litigation support services to attorneys pursuing judgements in civil cases. These services include focus groups, jury analysis, forensic animations, medical illustrations, video production, forensic biographies, and expert matching and vetting. “Giving our attorney partners access to fast litigation expense funding in a reliable and secure environment will be extremely well received. Savvy attorneys will realize that financial support during the often-lengthy pre-trial process can change the entire complexion of a case and allow them to significantly drive up the value for their clients while conserving their own out of pocket case flow,” said Michael Earner, Esq., president and chief  executive officer of Total Trial Solutions. “We’re proud to work with Multi Funding, which has a proven track record, as well as the resources and technology to fund a broad array of cases. Our partnership with Multi Funding will absolutely enable attorneys to produce better outcomes for their clients.” About Multi Funding Headquartered in Woodstock, New York, and with an office in Lynbrook, New York, Multi Funding is a major provider of specialized legal funding, attorney funding, and law firm funding services. With decades of lawsuit funding, business, and legal experience, the company’s founders have made it their focus to provide simple and fast services while maintaining a high standard of excellence. Multi Funding has provided millions of dollars of legal funding to plaintiffs and attorneys across the United States. www.multifundingusa.com