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Commercial Deals

Bespoke Capital Consulting Announces First Investment

Bespoke Capital Consulting has announced the deployment of its first investment. Bespoke provides equity investments to contingent fee law firms looking to grow their business, partnering investment funds with ongoing consultative guidance from its highly qualified and experienced management team.

Bespoke’s mission, as explained by CEO Crystal Utley, “is to increase access to the justice system for underserved injured parties, and we are thrilled to invest in a law firm that embodies the spirit of Bespoke. To be able to provide capital and guidance as this firm continues its mission of representing the underrepresented is quite fulfilling.”

Bespoke is the first of its kind to take a consultative approach to deploying capital in the legal field. With more than 60 years of collective industry knowledge, Bespoke’s management team leverages their expertise to provide a wide spectrum of consulting services including operational best practices, financial core competencies, and business development. Utley reports, “Contingent fee plaintiff law firms often lack access to strategic resources. As a result, these businesses face challenges, and present opportunities distinct from other industries and asset classes. Our goal is to apply quality competencies that not only drive value creation, but ultimately improve outcomes for those who are injured.”

For more information about Bespoke’s services, visit www.bespokecapitalconsulting.com, or e-mail Bespoke’s team of experts at info@bespokecapitalconsulting.com

Contact Information: info@bespokecapitalconsulting.com

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Case Developments Commercial

Federal Court of Australia Rules Against Claimants in Shareholder Class Action Funded by LCM

By Harry Moran and 4 others |

Whilst Australia remains a top jurisdiction for litigation funders looking to support impactful class actions, there is no amount of due diligence or analysis that can guarantee the end result will be a positive one for the claimants or funder.

An announcement from Litigation Capital Management (LCM) revealed that the Federal Court of Australia has provided an unfavourable ruling in a shareholder class action that LCM had funded. The class action was brought against Quintis Limited and its auditors, Ernst & Young, over allegations that they had engaged in false or misleading conduct which resulted in shareholders suffering financial losses.

LCM noted that whilst the Federal Court ruled that both the above parties had “engaged in misleading and deceptive conduct”, the claimants had not been able to prove  that this conduct had directly resulted in loss and damage. In the ruling, Justice Sharrif concluded that he was “not satisfied that the Davis Applicants have established their case as to causation, such that they have not established their case as to recovery of causally-connected loss.”

LCM disclosed that it has invested A$13.2 million in the case, which is supported by an insurance policy to cover any adverse costs exposure. Furthermore, LCM stated that there is a 28-day window for any appeal against the judgment to be filed, with the funder and its legal team currently considering “the merits of any appeal.” 

Patrick Moloney, CEO of LCM, provided the following statement on the Federal Court’s ruling: "In this shareholder class action, our funded claim established misleading and deceptive conduct by the director and the auditors on the facts before the court. The case did not succeed in determining loss caused by this conduct and we are considering carefully with our legal team why this is the case. It is an unusual outcome that the court found that the financial statements in question were misleading, but that this did not result in loss for the shareholders in Quintis. Our focus now is on assessing the Judgment and determining the best course of action alongside our legal team. We remain committed to our disciplined approach in managing risk and capital across our portfolio."

The full judgment from the Federal Court can be read here.

Case Developments Commercial

Competition Appeal Tribunal Approves £200m Settlement in Mastercard Case

By Harry Moran and 4 others |

As LFJ reported last week, the Competition Appeal Tribunal (CAT) was the venue for one of the most interesting settlement approval hearings in recent memory, as the class representative and litigation funder found themselves at odds over a proposed settlement.

An article in The Law Society Gazette covers the news that the CAT has approved the £200 million settlement in the collective action brought by Walter Merricks CBE against Mastercard. The approval came following the end of a three-day hearing where the Tribunal heard arguments from counsel for Merricks, Mastercard, and for the litigation funder who had backed the legal action, Innsworth Capital. Hodge Malek KC, Chairman of the CAT, praised Merricks dedication to the case and noted that “the fact the outcome has been disappointing in the light of how the evidence and rulings have developed does not detract from that.”

Merricks welcomed the Tribunal’s approval of the settlement, explaining that while he had “clearly hoped to have recovered more”, given the way the case had played out over the last few years, the settlement represented “the best amount possible”. Merricks’ legal team similarly highlighted the positive result after the prolonged duration of the collective action, with Boris Bronfentrinker, partner at Willkie Farr & Gallagher, describing the settlement as the “culmination of more than eight years of hard work”. 

Bronfentrinker appeared to take aim at the litigation funder’s intervention to try and block the settlement, saying that it was “most unfortunate that Innsworth chose to fight the settlement and to also threaten Mr Merricks personally by starting litigation against him.” 

Mr Justice Roth, Acting President of the CAT, said that the final judgment on the collective action would be delivered within “the next three weeks.”

Case Developments Commercial

CAT Hearing for £200m Mastercard Settlement Highlights Divide Between Funder and Class Representative

By Harry Moran and 4 others |

Whilst the successes of collective proceedings supported by litigation funders are regularly highlighted by the legal funding industry, an ongoing dispute at the Competition Appeal Tribunal (CAT) between a class representative and funder over a proposed settlement shows that it is not always a relationship in which both parties see eye to eye.

An article in The Law Society Gazette provides a summary of the ongoing hearing at the CAT, as the tribunal hears arguments as to whether the £200 million settlement in the Mastercard hearing should be approved or not. The hearing, which is scheduled to last until the end of the week, saw counsel for the claimant, defendant and funder each offer their arguments on whether the judges should proceed with the collective settlement approval order (CSAO).

Mark Brealey KC, counsel for class representative Walter Merricks CBE, stated that it was the position of both Merricks and Mastercard that the value of the settlement was “in a range that was fair and reasonable.” Responding to the intervention of Innsworth Capital, the litigation funder opposing the settlement, Brealey argued that “the funder should be respectful of the way that Mr Merricks has conducted the proceedings”.

Charles Bear KC, representing Innsworth as the intervener, highlighted the cost of the funder’s support for the case and argued that approval would mean that “the class does not get a fair return on this settlement on any view of distribution.” Bear went further and emphatically stated that Innsworth’s view is that “it is completely clear the settlement prescribes zero value to the case, not little value, but nothing.”

Sonia Tolaney KC, counsel for Mastercard, suggested that it was the views of the class representative and defendant that should hold the most weight, arguing that “There is no doubt that in this case the parties themselves are best placed to assess the merits [of the settlement].” Tolaney also targeted Innsworth’s questioning of whether the £200 million settlement was the best possible outcome for the class representative, declaring that in Mastercard’s view, “that is the wrong question.”