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Burford German Funding Sued Over Hausfeld Ownership Stake

By Harry Moran |

Burford German Funding Sued Over Hausfeld Ownership Stake

The ownership or funding of law firms by litigation funders continues to be a hot topic in the world of legal funding, with models such as alternative business structures (ABS) gaining momentum in places like Arizona. However, a complaint filed by a client in Delaware reveals a falling out due to the reverse funding model, where a law firm maintained an ownership stake in the funder.

Reporting by Bloomberg Law covers a new lawsuit brought against Burford German Funding (BGF), an affiliate of Burford Capital, by a client who claims that the funder failed to disclose the fact that BGF was partly owned by the same law firm it nominated to lead the client’s antitrust cases. Financialright Claims GMBH (FRC) alleges that when it negotiated the funding agreement with BGF for its antitrust litigation against the trucks cartel, it had no knowledge “that Hausfeld  was  also  a  part  owner  of  BGF  through  an  entity  called German Litigation Solutions LLC (“GLS”) or that one of the lead German partners at Hausfeld responsible for the firm’s representation of FRC had a personal stake.”

The complaint, filed by FRC in the Delaware Superior Court, explains that as Hausfeld is part-owner of BGF, and the funding agreement “provides for a share of FRC’s recoveries in the Trucks Litigations to flow to FRC’s lawyers”, this constitutes a contingency fee arrangement which are illegal under German law.  FRC had filed a lawsuit against Hausfeld in a German court and then applied for discovery from BGF, Burford and GLS in the Delaware District Court, which was followed by an assertion by these parties that the application for discovery “is subject to mandatory arbitration” under the terms of the funding agreement.

FRC argues that “as  a  direct  result  of  BGF’s  fraud  on  FRC,  FRC  did  agree  to  the Arbitration Agreement that—according to BGF—subsumes disputes between FRC and GLS.” However, FRC claims that it “would  never  have  agreed  to  an  arbitration  clause  requiring  it  to arbitrate claims against Hausfeld”, were it not for the concealment of Hausfeld’s ownership stake in BGF. FRC is therefore asking the Superior Court to declare that “BGF fraudulently induced  FRC  into  agreeing  to  the  Arbitration  Agreement”, and that the agreement should be declared both invalid and unenforceable.

Lisa Sharrow, spokesperson at Hausfeld LLP, provided the following statement:  “The US-based Hausfeld LLP and the UK-based Hausfeld & Co LLP hold indirect economic minority interests in Burford German Funding. These are separate legal entities from Hausfeld Rechtsanwälte LLP that do not practice law in Germany. Burford German Funding was of course developed and set up in a way that was fully compliant with all relevant regulations.”

David Helfenbein, spokesperson at Burford, also provided a response to Bloomberg via email: “There is a dispute in Germany between a client Burford has funded and its lawyers. Burford is not a party to that dispute and its outcome has no impact on us. This Delaware proceeding is a third-party discovery request to Burford for material for the German litigation, which Burford believes should be adjudicated in arbitration and not in the Delaware courts.”

The full complaint filed by FRC can be read here.

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Harry Moran

Harry Moran

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BHP Presses Gramercy–Pogust on Control of £36bn Claim

By John Freund |

A high-stakes governance fight is spilling into the UK’s largest group action. BHP has demanded clarity over hedge fund Gramercy Funds Management’s role at Pogust Goodhead, the claimant firm fronting a £36 billion suit tied to Brazil’s 2015 Mariana dam disaster. The miner’s counsel at Slaughter and May points to recent leadership turmoil at the firm and questions whether a non-lawyer financier can exert de facto control over litigation strategy—an issue that cuts to the heart of legal ethics and England & Wales’ restrictions on who can direct claims.

Financial Times reports that Gramercy, which finances Pogust, has just extended $65 million more to the firm after the removal of CEO-cofounder Tom Goodhead. BHP wants answers on independence and management oversight as the case nears a pivotal High Court ruling. For its part, Pogust says it remains independent and committed to its clients, while Gramercy rejects any suggestion it owns or manages the firm. The backdrop is familiar to funders: courts’ increasing scrutiny of who calls the shots when capital underwrites complex, bet-the-company litigation. Prior settlement overtures from BHP and Vale—reported at $1.4 billion—were rebuffed as insufficient relative to the claim’s scale and alleged harm.

Beyond this case, the episode underscores a larger question: how far can financing arrangements go before they collide with the long-standing principle that lawyers—and only lawyers—control litigation? The answer matters well beyond Mariana. If courts or legislators tighten the definition of control, expect deal terms, governance covenants, and disclosure norms in UK funding to evolve quickly. For cross-border mass-harm claims, the line between support and steer is narrowing—and being tested in real time.

ALF-Member Backs Amazon UK Pricing Class Action

By John Freund |

A new opt-out competition claim aims squarely at Amazon, alleging price-parity tactics inflated costs for more than 45 million UK consumers. The Association of Consumer Support Organisations has filed for certification in the Competition Appeal Tribunal, instructing Stephenson Harwood with counsel from Monckton Chambers. The claim asserts Amazon’s marketplace policies restricted third-party sellers from offering better prices elsewhere—costs that, ACSO says, consumers ultimately bore.

The Global Legal Post notes a third-party litigation funder—confirmed as a member of the Association of Litigation Funders—is bankrolling the action, with identity to be revealed at certification. That disclosure posture aligns with the CAT’s funder-transparency expectations post-PACCAR while preserving competitive sensitivity during the early phase. On the defense side, Amazon labeled the case “without merit,” and emphasized consumer benefits and seller support on its platform. For claimant-side practitioners, the case illustrates how funders continue to underwrite large opt-out competition claims notwithstanding shifting case law on damages-based LFAs; structures are adjusting, not retreating.

If certified, the case will test funder appetite for big-ticket consumer competition matters amid the UK government’s newly announced review of the collective actions regime. It could also influence how funders structure returns (percentage vs. multiple, hybrids) to thread the needle between tribunal oversight and commercial viability. Watch for whether the CAT’s scrutiny of fees and “just and reasonable” outcomes further standardizes funding terms across UK opt-out claims.

Singapore Court Expands Scope for Legal Finance in Civil Cases

By John Freund |

In a pivotal decision likely to reshape Singapore’s litigation finance landscape, the country’s High Court has affirmed that third-party funding is permissible beyond its historically narrow confines. The judgment, delivered in DNQ v DNR (2025), broadens legal finance's potential use in civil cases unrelated to insolvency or arbitration, marking a significant milestone in the jurisdiction’s approach to access-to-justice tools.

An article on Burford Capital's blog notes that the case involved a claimant pursuing enforcement in Singapore of a £31 million UK family court award. Facing financial hardship, the claimant secured funding from a professional litigation financier. The defendant moved to strike out the case, arguing the arrangement violated public policy by being champertous. But the court disagreed.

Presiding Senior Judge Tan Siong Thye upheld the funding agreement, finding it did not offend the principles of justice or procedural fairness under the Vanguard test. Crucially, the judge ruled that statutory reforms to Singapore’s Civil Law Act did not negate common law exceptions that allow for such funding arrangements.

The court outlined three factors favoring the agreement: the claimant’s lack of resources absent funding, the reasonableness of the funder’s return (potentially up to 56%), and the claimant’s continued control over litigation strategy. The judgment also clarifies that litigation funding is not confined to the specific scenarios listed under section 5B of the Civil Law Act, such as insolvency or arbitration, thus opening the door to broader use in commercial disputes.

This decision signals increasing judicial acceptance of litigation finance in Singapore’s courts and is likely to embolden funders exploring opportunities in the region. As jurisdictions around the world re-evaluate the role of third-party funding, Singapore’s High Court appears poised to join a growing chorus endorsing its value in supporting equitable legal outcomes.