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

When the economy takes a downturn, a spike in litigation can follow. Desperate financial times can turn even the most non-confrontational towards dispute—as assets dwindle and every penny counts.  But in an economy beset by losses, slow growth, layoffs, and shutdowns, how are people supposed to fund cases?

Enter: Litigation Finance. 

In less than two months, America has changed dramatically as we all pitch in to flatten the curve of COVID-19 infections. This has caused businesses to close or dramatically reduce hours, staff, and output. It has led to supply chain stoppage and the total disruption of life and business as usual.

Court closures and the absence of many basic services have brought about a major slowdown in the way cases are settled or litigated. As we don’t know how long COVID-19 isolation and quarantine will last, it’s growing more and more difficult to assess the true cost of the increased time-to-settlement.  

Boeing is one of the cornerstones of the global aerospace industry, yet the company is experiencing tumultuous times. The grounding of its 737 Max airplane in the wake of the Coronavirus outbreak caused the company to book over $20Bn in charges, and some are worried about liquidity issues, and even bankruptcy. 

On Thursday, LFJ hosted a panel discussion with a pair of experts on the Aerospace industry regarding the fate of Boeing, and the future of the industry. 

It’s no secret that insiders will buy up shares of companies they anticipate will outperform. It’s also no secret that the economic havoc being wreaked on the global economy by COVID-19 is bound to have legal (and litigation funding) repercussions. Could Burford’s insider share purchases foretell positive times ahead for the world’s largest litigation funder? 

The Coronavirus is having an impact on lawyers around the world. Right now, employers need advice on the best ways to react to employees who have contracted the virus, or those desperately trying to avoid it. From remote assignments to office closures, lawyers are needed to help companies navigate the uncharted waters of a modern pandemic. 

Legal minds Paul Haskel and Jim Walker have kept a close eye on how litigation funding is impacting legal ethics. Like many lawyers and judges, they have grave concerns and feel that some tweaks in the Code of Ethics should be considered. But how to get everyone on the same page about what needs to change? 

While not legally binding, the recent NYC Bar Association opinion on litigation funding is a powerful statement on the ethics of funding and what regulations are needed. In response to this, a 25-person working group on litigation funding was assembled. 

As litigation funding increases in popularity, funders find that they can take their pick of lawyers and cases to back. While on the other hand, securing the funding needed to successfully litigate a case can be a challenge. Aside from the usual considerations—potential recovery amount and time, overall merits of the case, etc.—funders look closely at the lawyer(s) involved.  

A UK case involving the post office, buggy accounting software, and widespread accusations of theft was big news across the pond. After numerous sub-postmasters were accused of theft, many endured firing, public shaming, loss of property, and even jail time. The real culprit was bad accounting software made by a company called Horizon.  Now, the plaintiffs are alleging that the bulk of their payout will go to the firm that financed the legal case—and not to the people who were actually hurt. 

International Women’s Day has come and gone.  But the issues women face in the workplace—and in law firms in particular—are still present.  With that in mind, Buford Capital has set aside a roughly $50 million funding pool to help balance the gender gap in litigation funding.  

In 2018, the NYC Bar surprised a lot of folks by issuing a formal opinion declaring litigation funding in conflict with the Bar’s rules on fee-sharing with non-lawyers, as outlined in Rule 5.4 of the professional conduct code. The reaction within the funding community was swift, however no formal response has been delivered… until now. 

The Arkin Cap is officially sunk. A UK Court of Appeal has sided with the trial court in the case of Davey v. Money, which found that the Arkin Cap is merely a suggestions, and courts are not bound by its limitations. 

No one will ever accuse Aussie law firm Maurice Blackburn of not being proactive. The class action king (Maurice has filed the most in Australia) is pursuing a class action claim against banking giant NAB, and plans to use a contingency-fee model. There’s just one wrinkle here: contingency-fee arrangements aren’t legal in Australia. The state of Victoria is mulling legislation that would legalize such arrangements, but hasn’t passed the final bill yet. 

“Lawyer-Directed” litigation finance, whereby a funder forms a partnership with contingency counsel, provides an opportunity to work around some of the issues that exist in client-directed funding – most notably issues that arise when creditors or lienholders are awaiting recoupment from the client, pending successful litigation. Many funders are averse to partnering with a client that is encumbered by senior lienholders, hence many such claims go unfunded, despite the merits of the underlying case. Lawyer-directed funding provides an attractive solution.