News and analysis dedicated to the commercial litigation funding sector including regulatory issues, case developments, funding activities, and more.

Connor Murphy is currently a Director at Burford Capital. His focus is on new business origination with corporates and firms in the US. Before this, he was General Counsel for Capstone Advisory Group.

Litigation funding has taken off in the last decade, largely due to its utility and benefits—but also spurred by the financial unrest caused by COVID. In the ten years since its inception, the Litigation Finance industry has grown, adapted, and flourished as an investment and a product.

The Legal-Tech Act has recently been passed in Germany and will take effect in October of this year. Essentially, it allows attorneys more flexibility with regard to contingency agreements. This act is the opening move in a series of planned reforms to Germany’s legal service market.

A new court rule in Scotland takes effect on June 30th of this year. The rule allows for QOCS, or qualified one-way cost shifting in personal injury cases.

Is a positive verdict enough once a defendant declares bankruptcy? It may not seem like it, but in fact, plaintiffs may find bankruptcy court a more expedient option in some situations.

Is post-pandemic global inflation a certainty? Probably not. But it’s worth noting that pandemic alleviation spending, quantitative easing by the Fed, and a sizable budget deficit are creating similar conditions to the last large inflation peak—way back in 1947. There are other factors to consider, some of which are difficult to predict. Consumers are excited to spend, travel, and do all of the things the pandemic prevented them from doing. What does that mean for litigation funding?

A sizable class action against Carter Holt Harvey ended abruptly when offshore third-party funders voided the funding arrangement for unspecified reasons.

Having closed its $25 million LexShares Marketplace Fund in January of 2018, LexShares’ second fund—targeted at $100 million, is well underway.

Do both sides of a case need to know when third parties have an interest in the outcome of their case? David Levitt of Hinshaw & Culbertson says yes. He has proposed changing the rules in the District of New Jersey to require plaintiffs and defendants alike to disclose information about TPLF agreements.

Targeting the oft-maligned Real-Time Bidding (RTB), the Irish Council for Civil Liberties is taking IAB Tech Labs to court. The focus is on consumer privacy. This is a potentially far-reaching case as it addresses tactics used by Twitter, Amazon, Google, and Facebook among others.

As Litigation Finance grows in popularity, more new players are entering the playing field. Some fields, like IP litigation, are considered especially lucrative and are a popular focus for upstart funders. However, success in this landscape is far from a sure thing.

More people than ever now understand the broad strokes of what Litigation Finance is and what it can offer. Investors fund cases through funding entities that are then owed a share of any recovery or award in the case. Litigation funding is non-recourse, so funders can take a higher percentage in exchange for the enhanced risk.

A recent order in a case between Laser Trust and CFL Financing is turning heads. The English High Court has made three cost orders against CFL. The court determined that the funder exerted an excessive amount of control over the case it had funded.

As the number of jurisdictions embracing litigation funding grows, bar associations are following suit. Lawyers utilizing third-party funding as an option for clients would do well to note guidance offered by the state bar association on funding agreements and professional ethics obligations. While more state bars are expected to lend their opinions on the practice, New York and California have their own approaches to litigation funding.

Litigation funding has a new landscape to conquer—cryptocurrency. Liti Capital is the first legal funding company to tokenize shares. This creates an equity token that is asset-backed—which is unusual in blockchain. Using tokens allows a wider swath of investors to participate, as the entry threshold is lowered.

Are insolvency claims about to become more expensive and time-consuming to pursue? Some have suggested yes, after a ruling in Manolete Partners Plc v Hayward and Barrett Holdings Ltd 2021. It’s said that the recent ruling impacts those who assign insolvency claims, as well as insolvency practitioners themselves, by increasing the cost of claims, and may require two separate sets of proceedings regarding the same set of facts. Why?

As parts of the world seek out post-COVID normalcy, a predicted spike of legal claims is en route. Insolvencies are increasing, as are claims of fraud, breach of contract, and breach of fiduciary duty. With that in mind, a group of practitioners who deal in fraud, insolvency, and enforcement held the Asset Recovery Americas Conference—focusing on enforcement law in Latin America and the United States.

Litigation Finance has long been increasing in popularity and sophistication in places like Australia, the UK, the US, and Germany among others. Yet despite this run-up, much of Asia seems slow to adopt the practice.

Last month, the Private Funding of Legal Service Act 2020 (AKA the Act) became law. The Act brings codification to the rules governing the practice of third-party litigation funding—which had been addressed on a case-by-case basis previously. Like many jurisdictions, champerty and maintenance laws had to be abolished before litigation funding could be supported by the law. This was a key element of the Act.

Investments made by Arkansas’s Teacher Retirement Systems increased by a staggering $783 million. This ranks the fund in the top 5% of public pension funds in America. This comes after last year’s investments fell to only $15.1 billion as of the beginning of COVID shutdowns.

When Alexander Tugushev went to London in 2018, he expected to sue Magnus Roth and his former business partners for a cut of Russian fishing group, Norebo. The claim revolved around a one-third share based on informal verbal agreements made long before the founding of Norebo.

A potential class action against Tyro Payments Limited is being investigated by Bannister Law Class Actions. Tyro is Australia’s largest non-bank provider of Point of Sale Electronic Fund Transfer services. Service outages in January of this year impacted hundreds of businesses—causing loss of sales revenue, service fees that provided poor or no service, customer dissatisfaction, and general damage to businesses as they sought to compensate for Tyro’s outages.

Liquidators of Nuoxi Capital and Kunzhi Ltd are presently engaged in negotiations with potential litigation funders. Multiple sources claim that it will be very expensive to recover various inter-company claims—not to mention the need for a Beijing court to accept a previous keepwell ruling originating in Hong Kong.

Law firm King & Spaulding, along with partners Craig Miles and Reginald Smith, are being sued by former client, Trinh Vinh Binh. The firm is accused of failing to follow client instructions, and of ‘erroneous allocation’ of funds. Claims include breach of fiduciary duty, fraud, and negligence, as Binh seeks fee forfeiture in addition to damages.

Shine Lawyers is seeking claimants for a newly launched class action on behalf of indigenous Australians whose wages were stolen. Wage control legislation led to wages being withheld in the period between the late 1800s and the early 1970s. This may include farmworkers, domestic staffers, laborers, stockmen, and others.