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.
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.
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 the United States, Australia leads the world in climate-related litigation. Some companies, like Rio Tinto, are making climate resolutions of their own. Many other ASX-listed companies are doing likewise—knowing that disclosures relating to climate impact may be coming sooner rather than later.
As the use of litigation funding grows more mainstream, accusations that the industry is opportunistic, greedy, and suspiciously secretive abound. Some have suggested that litigation funding will lead to a glut of frivolous cases and clogged court dockets, and therefore increased regulation is necessary.
Can failure to provide security for costs derail an otherwise meritorious case? It appears that’s what happened in a New Zealand-based collective action against Feltex Carpets. The case was funded, but stopped abruptly when funders failed to provide security for costs. Why did that happen?
Contingency arrangements are often used by federal equity receivers when financial constraints keep them from pursuing litigation against fraudsters. These arrangements can shave off a sizable portion of the expected recovery—up to 50% in some cases.
At present, the United States has about 40 litigation funding entities actively funding cases. Assets under management are estimated to be close to $10 billion. In the bankruptcy arena, some say legal funding isn’t growing. But there are two recent appeals court decisions that may change that.
It was big news last year when Ava Labs debuted an ILO or Initial Litigation Offering. The ILO was released through the open-source platform Avalanche. Without going into minute details, Avalanche provides the ability to connect existing blockchain platforms into a single ecosystem in which digitized assets can be bought, sold, or traded.
On Tuesday, June 15th, 6pm EST, Litigation Finance Journal is hosting a roundtable discussion on the evolution of Litigation Finance in Australia. Topics will include the increasing threat of industry regulation, the Joint Parliamentary Committee’s perspective on litigation funding and class actions, how Australia may serve as a blueprint of sorts for global jurisdictions including the US, UK and EU, and the structural and cultural differences inherent to running a litigation funding firm in Australia.
London International Disputes Week 21 includes numerous discussions on dispute resolution. This year’s theme, Looking forward: Change, Challenge, and Opportunity, encapsulates how the legal and financial worlds have had to adapt to a rapidly changing landscape.
