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

As more countries allow the use of third-party funding, more courts are tasked with clarifying how the practice should work with existing law. In Austria, questions regarding ‘pacta de quo-ta litis’ arose with regard to Austrian Civil Code section 879, and section 16 of the Austrian Attorney’s Code.

It’s no secret that the Australian government is concerned about class actions—especially those with potentially high awards. In recent months, a law requiring third-party litigation funders to hold specific licenses came into effect. Disclosure obligations were formalized and may become permanent. Now there is talk of imposing a 30% cap on how much claimants can be charged by funders in collective actions.

As the world economy inches toward some sense of post-COVID normalcy, asset-backed securities are demonstrating their resilience. Unlike traditional ABS classes like leases, car loans, student loans, or credit card debt, the term ‘esoteric ABS’ can be applied to assets that can be traded for non-recourse funding.

Since 2018, Prairie Mining has maintained that actions committed by the Polish government deprived the company of the value of its investment in the Jan Karski and Debiensko mines.

The acceptance and mainstreaming of litigation funding are happening at different times and speeds in different parts of the world. Much of Europe has made use of the practice for nearly two decades. Other locales, like Singapore and Hong Kong, have only welcomed legal funding in recent years.

The collapse of the Woodford Equity Income Fund is still yet to be resolved. Leigh Day sent a letter-before-action to Link Fund Solutions in March, accusing the ACD of failing to maintain proper liquid asset levels, as well as general mismanagement of the fund.

Around the world, antiquated champerty laws are being struck down in favor of allowing third-party litigation funding. In the late-1990s, litigation funding gained popularity in Australia, England, Wales, and the United States. Since then, it has grown in acceptance and familiarity—and is now a multi-billion dollar industry.

Litigation Finance is a rapidly growing and evolving industry, and has been since its emergence during the last financial crisis. The practice helps law firms accept more contingency cases, allows businesses to monetize illiquid assets, and can turn existing IP into a profit center.

In Hong Kong, attorneys are not allowed to charge fees based on the potential award for a case. Increasingly, however, some types of flexible fee arrangements are allowed. In Hong Kong’s quest to become a destination for multi-jurisdictional litigation, the Law Reform Commission of Hong Kong has developed a subcommittee that will make recommendations regarding ‘Outcome Related Fee Structures.’

As Litigation Finance grows in popularity, questions arise as to proper use cases. For example, courts are tasked with determining how laws should apply to litigation funding transactions and the agreements that outline them.

Risk solutions specialist Maxima is joining forces with ATE insurance provider DAS UK to take on matters relating to personal injury and clinical negligence.

Hausfeld, a law firm that includes connections to the DC Attorney General’s office, has been chosen to file an antitrust lawsuit against retail giant Amazon. The case is said to be so potentially lucrative that the contingency fee agreement states that the firm may not accept more than $55 million in fees. Paul Gallagher will lead the litigation. Gallagher has a long history in antitrust cases, and once worked for the Department of Justice and the DC Attorney General.

An investigation of claims is underway as Bannister Law Class Actions determines whether a class action against Tyro Payments Limited is warranted. Tyro is a powerhouse provider of payment acceptance logistics, currently serving more than 32,000 businesses in Australia.

Is an existential threat to the legal world looming? A survey of over 1,000 GC’s suggests that many of them fear the future promises smaller budgets, heavier workloads, and more pronounced risk for in-house legal teams. For many businesses, litigation funding can be a vital part of the solution.

Auto giant Ford is back under scrutiny for its powershift clutch system. After one couple received compensation from Ford to replace their transmission—nearly three dozen other car owners reported similar problems to Fair Go.

The aftermath of Wirecard’s insolvency has grown even more complicated since the payment company liquidated with nearly $2 billion in the red. Over 20,000 people impacted by the Wirecard collapse plan to sue the company. The plaintiffs are backed by litigation funder, Litfin.

Third-party litigation funding has grown significantly in recent years. This relatively new industry got its start during the last financial crisis, and has expanded and adapted to meet the needs of lawyers, plaintiffs, and businesses during COVID. The practice has its share of detractors, but overall it’s viewed by courts as a net gain for the community, as it increases access to justice for those who could not otherwise afford it.

The High Court case surrounding James Hardie and its “cladding systems” appears to hinge on whether the products themselves were defective, or if the installers simply erred in their duties. 

Patent monetization is a rapidly growing alternative asset class. Fund managers, private equity firms, and hedge funds are all looking toward patents and patent portfolios as key non-correlated investments. The largest patent-focused fund currently active in the industry belongs to Fortress—with $900 million under management and a further $400 million in IP Fund 2.

Is crowdfunding a good way to finance a case against the FSCS? That’s what LCF bondholders are asking themselves as they look for ways to fund an appeal. Four LCF bondholders are representing the rest of the investors in the class. After the High Court ruled against them, they received permission to take their case to the Court of Appeal.

For investors, duration is both extremely important and commonly underestimated. Assessing how long it may take for a case to go from filing to conclusion to payout is essential when considering funding any litigation. It can take two or more years for a case to reach completion—and even then, there is no guarantee of a speedy payout.

After a recent article lambasting the industry, Tets Ishikawa of LionFish Litigation Finance penned an impassioned response.