Litigation Finance is a growing asset class, spurred on by the financial fallout caused by COVID. Increasingly, investors are seeking uncorrelated investments. As Gary Sweidan, founder of Taurus Capital explains, litigation funding is about as uncorrelated as it gets.
The COVID pandemic has wreaked havoc on many industries, energy included. Energy usage fell, production disruption was rampant, regulations changed all over the world, and at least 19 energy companies filed for bankruptcy last year. Burford’s newly commissioned 2021 Asset Report explores the ways in which energy companies can use their legal assets to create revenue.
This week, James Hardie Industries announced a settlement in a weather tightness class action heard in Auckland High Court—in the middle of a trial expected to last 17 weeks. James Hardie, a global producer of fiber cement and fiber gypsum, will receive NZ $1.25 million as part of the settlement.
Leading litigation funder Omni Bridgeway is currently observing multiple significant milestones, including the 35th anniversary of its founding. In addition, 2021 represents 20 years since it was first listed on the Australian Stock Exchange, and the opening of its German arm.
Anyone hoping to be a success in the world of legal finance should expect to amass knowledge from multiple industries. Banking, litigation, corporate finance, IP and patent laws, and more. This is why many of the most successful funding entities employ staffers from multiple business disciplines, and why they seek out those with cross-disciplinary skill sets.
Burford Capital is the largest Litigation Finance company on Earth. Returns on litigation investments are consistently high, yet investment pros can’t seem to agree whether Burford stock is a big risk or a sure thing. The truth, as always, may be somewhere in between.
Funders and risk specialist Erso Capital has released its Q1 statement, and it seems largely positive. The funders report high demand for single-case funding. It also boasts a strong portfolio of completed transactions in several jurisdictions.
RBG Holdings has recently published its pre-close trading update. This comes ahead of its six-month financial report—expected in September of this year. RBG Group includes several profitable divisions, including those providing commercial and dispute-related legal services, and litigation funding.
The story of Lionheart Capital begins with John Ruiz and Ophir Sternberg (real estate developer and founder of Lionheart). Sternberg joined forces with hedge fund Elliott Management, turning Heart Hospital into a spate of luxury villas. This past May, Ruiz and Sternberg bought Cigarette Racing Team together.
The financial uncertainties brought about by COVID are one driver for the increased use of third-party legal finance. Businesses are becoming insolvent in record numbers. Even those with strong cash reserves are burning through them at unprecedented rates. How does legal funding help?
AxiaFunder is a new and innovative investment platform that focuses on litigation funding as an asset class. Founded by Cormac Leech, the UK startup caters to sophisticated investors.
Complaints against third-party litigation funding tend to focus on a few oft-repeated points. Increased litigation, class actions in particular, ostensibly cause insurance rates to rise. Funders aren’t always required to disclose their funding agreements, ostensibly hiding a potential conflict of interest. Finally, funders are blamed for a supposed increase in frivolous actions—even though no funder wants to take on a case without merit.
Prominent third-party litigation funder LCM (Litigation Capital Management) has secured a trio of major legal funding agreements in the last seven weeks. These include cases against rail services giant Govia, French electrical retailer Darty, and former Carillion auditor KPMG. As expected, investors have noticed LCM’s success; share prices rose 25%. Many analysts, including Simon Thompson, are lauding the stock and calling it a ‘buy.’
A new government proposal has been met with strenuous objections from litigation funders, lawyers and company directors alike. The proposal would mandate that at least 70% of any payout in a class action must go to the members of that action. Some find it telling that the Law Council of Australia stated that such a limit would make claims financially untenable for litigation funders.
Litigation Finance has experienced tremendous growth in recent months—owing to the pandemic among other factors. It’s increasingly popular among investors seeking an uncorrelated asset class. However, few mechanisms exist to allow investors to select the cases they fund directly—one of those, is AxiaFunder.
It’s been fascinating to watch the progression of litigation funding happening around the world. Territories each develop their own regulations based on specific goals, when welcoming the practice. Some are positioning themselves as litigation destinations, while others seek ways for the practice to benefit citizens with the greatest need.
Two recent court rulings are being touted as a death knell for a controversial litigation funding model involving whistleblowers. The Justice Department has never downplayed its opposition to investors profiting from government lawsuits. Whether the practice is an innovation in identifying wrongdoing while profiting financially, or heretical to the idea of whistleblower protections—it does seem that the involvement of litigation funders in whistleblower cases may be on its way out.
The legal services industry in the UK is one of the largest on Earth. One side effect is that commercial courts are often used in cases involving no British citizens. The super-rich are largely coming from the Soviet Union. Some may be avoiding taxes or political persecution, while others have kept their ties to the Kremlin.
When we think of a class action, we think of ordinary citizens seeking compensation for wrongdoing by a large, often commercial or governmental entity—usually with the support of third-party funders. So what led to a group of insurers filing suit against the owners of a cargo vessel?
