2020 was a pivotal year for commercial litigation funding, and the industry approaches 2021 on the cusp of massive growth. Litigation Finance Journal is hosting a special digital conference which will cover the most impactful stories of the past year, and offer insights into what next year will bring.
Two insurers have been accused of wrongdoing by Blackmore Bonds after refusing to pay out to bondholders. Bondholders are guaranteed by law to receive shortfalls if the company becomes insolvent. They have stated the likelihood of legal proceedings in order to force payment.
Winshear Gold Corp. (TSX-V: WINS) (“Winshear” or the “Company”) provides the following update on arbitration activities related to the expropriation of the SMP Gold Project (the “Project”) by the Government of Tanzania.
Recommendations from the New Zealand Law Commission include strong support for litigation funding as well as advocating for a strong class action regime. Meanwhile, insurance companies are among those are expected to balk at any new policies making class action suits more common.
In an already difficult year for companies around the world, a new report from global firm Dechert tells us to expect even more hardship. A new report predicts that both the number of settlements and the final settlement sizes are expected to rise significantly.
Adam Gerchen, whose 2016 sale of his litigation finance company to Burford Capital made waves, is at it again. This time with partner Jeffrey Hammes (formerly of Kirkland & Ellis) and their special purpose acquisition company. The pair are looking for a new acquisition thanks to an IPO over-allotment of $175 million.
The following is a contributed piece from Nick Rowles-Davies, Executive Vice Chairman of Litigation Capital Management. Along with Andrew Saker, CEO of Omni Bridgeway, and Neil Purslow, Co-Founder of Therium, Nick will be a panelist on LFJ’s upcoming special digital conference — an industry roundup of the major events impacting commercial litigation funding in 2020, and what to expect in 2021.
Noted class action firm Quinn Emanual Urquhart & Sullivan is reportedly investigating a recent ASX trading outage. Could this mean a class action is forthcoming on behalf of those impacted by the glitch? ASX has accepted responsibility for the occurrence, though it’s not clear what that acceptance means in a legal context.
Opt-out class actions will soon be the standard in New Zealand just as they are in Australia, thanks to a new Supreme Court ruling. A case involving Southern Response Earthquake Service Limited and a New Zealand couple has led to the ruling. The general legal thinking is that an opt-out standard improves access to justice.
More than ¾ of firm lawyers surveyed expressed concern about 4th quarter collections. More than half of firms have also stated a willingness to provide discounts in order to receive payments faster or to gain new clients. Meanwhile, realization rates are falling.
Treasurer Josh Frydenberg is known for his zeal in regulating the litigation funding industry in Australia. He was instrumental in instituting new restrictions and mandates for those who engage in the practice, and for funders themselves—including a requirement that funders register as Managed Investment Schemes while holding AFSL’s.
Complaining that she has only received $7 million and an ill-kept helicopter, divorcee Tatiana Akhmedova was due to face her son Temur in court in an effort to gain the rest of her $600 million divorce settlement. This time, the asset in question is a $40 million London apartment.
Kroll Bond Rating Agency (KBRA) assigns a preliminary rating to one class of notes from PEAR 2020-1, LLC, an $80 million litigation finance ABS transaction serviced by Golden Pear Funding OpCo, LLC (“Golden Pear”).
Shareholders of Vocation Limited, a now-defunct training company, have settled a class action for a reported $50 million. Vocation had been listed on the ASX as of November 2013, and enjoyed a reputation as Australia’s premier provider of education and vocational training services. Slater and Gordon facilitated the settlement, funded by Omni Bridgeway.
Mining company Rio Tinto finds itself under threat of legal action from a US hedge fund. Pentwater Capital Management is threatening an oppression order to gain an extension of debt in order to expand the Oyu Tolgoi mine project into the Gobi desert. The expansion is controversial, in that it requires the destruction of a sacred Aboriginal site.
When looking for help via legal finance, it makes sense to want the best deal possible. With that in mind, portfolio funding might be worth a look. Single-case funding represents the highest risk for funders—because the non-recourse nature of litigation funding means there’s no remuneration for funders unless the case is successful.
Litigation Capital Management, a prominent face in litigation funding, makes a profit on nearly 90% of the cases in which it invests. This gives the funder an IRR of 78%. LCM largely operates in the UK and Australia, funding cases in exchange for a share of awards. Over the last decade, LCM boasts an ROIC of 134%.
The phrase “new normal” can be unsettling, especially when it foretells an unwelcome change. Will rampant class actions lead to a glut of insolvency cases levied by shareholders? Some are predicting that as many as 50 new claims each year could be the new normal.
Security for costs is frequently asked for in international arbitration cases, but almost never granted. In fact, the common thinking is that security for costs should only be granted in certain rare and specific instances. Notably, one of the main things spurring requests for security for costs is litigation funding. Many defendants are more likely to ask for this when plaintiffs utilize third-party-funding.
Economic uncertainty is plaguing industries around the globe. Between the COVID pandemic, bizarre political circumstances, and ongoing international market turbulence—unpredictability is everywhere. Investors are seeking new investment types that are uncorrelated with the rest of the marketplace. For some, third-party legal funding meets all the requirements.
In its most recent general meeting, Bronwyn Brown’s chairman’s address laid out the most noteworthy actions and accomplishments of the year. The talk was attended by non-executive directors, the company secretary, several auditors, and of course, the Executive Chair.
A record-setting divorce settlement is still in contention as Google is ordered to turn over the emails of a private citizen. Temur Akhmedov, son of a late oligarch Farkhad Akhmedov, has been fighting the release of funds from his step-mother’s divorce settlement of about $600 million. Her case is being funded by Burford Capital.
Geraldine Clark, former president of the Law Society in Ireland, has a lot to say about navigating the professional ethics of litigation funding. Referring to the resurgence and growth of the practice as “the wild west,” Clark focuses on the obligations of those attorneys who would encourage or facilitate utilizing the practice.
The recent Bluberi decision regarding litigation funding arrangements is still making news. The decision, which approved the use of litigation finance in a Canadian insolvency case, was appealed after a reversal by the Quebec Court of Appeal. In May of this year, the reversal was rescinded and the lower court ruling was upheld.
Phi Finney McDonald, a specialist collective action law firm, are launching an office in London. With offices currently in Melbourne and Sydney, Australia, Phi Finney McDonald has an unparalleled reputation for driving competition and innovation in the Australian class action and litigation funding markets. Its repeat clients include some of the largest and most influential pension schemes, private investors, sovereign wealth funds, and investment platforms across the Asia Pacific, North America and Europe.
The following article is part of an ongoing column titled ‘Investor Insights.’
Brought to you by Ed Truant, founder and content manager of Slingshot Capital, ‘Investor Insights’ will provide thoughtful and engaging perspectives on all aspects of investing in litigation finance.
