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

Last week, Dealmakers hosted a virtual event titled ‘Law Firm-Funder Partnerships in a Time of Economic Uncertainty.’ The event was sponsored by Validity Finance, and featured a panel of speakers including Alanna Clair (AC), Partner at Dentons, Jordan Goldstein (JG), Partner and GC at Selendy & Gay, Joshua Libling (JL), Portfolio Counsel at Validity, and Reed Oslan (RO), Partner at Kirkland & Ellis. The panel was hosted by Bob Robertson (BR), Strategic Advisor at Dealmakers.

Given that the stock market has fallen almost 20% in the last 30 days, securities claims are expected to surge. The need for increased operational funds and asset liquidity makes Litigation Finance an attractive option for companies facing such claims.

It’s clear that insurers and policyholders are keeping a close eye on the law as it pertains to pandemics. Clauses in contracts specifically related to viral or biological agents will take center stage in new lawsuits that are sure to spring up after COVID-19 precautions have taken a heavy toll on businesses.

Convicted of fraud in 2007, Alexander Tugushev is now suing a former business partner. The case is being funded by 17 Arm, a firm advised by a former prosecutor and former foreign secretary, and is raising questions due to the high-profile nature of those involved, and because of the use of Litigation Finance.

It’s no secret that Litigation Finance is a profitable and growing industry around the world. With Australia, Asia, Europe and North America all enjoying the fruits of lit fin’s labor, is it time for Africa to get in on the act?

In a typical scenario, contingency cases involve Davids v. Goliaths. That is to say, usually smaller law firms are the ones who take cases on contingency. Established firms are less likely to take cases on a contingency basis, but that may be changing—thanks in part to litigation funding.

Third-party litigation funding is becoming a natural response to the economic turmoil caused by COVID-19. Firms beset by financial anxiety are looking to keep balance sheets balanced, and funding is an excellent route.

The growing influence of litigation finance in the global legal environment has led to increased regulation and certain ethical concerns. That said, funders, clients, and legal professionals are all feeling optimistic about the impact of lit fin in the future.  In addition, new markets are opening up in Asia-Pacific and elsewhere. 

Staggering data has emerged in the class action suit against Southern Response, showing that the liability of the New Zealand federal government could surpass $400MM. This estimate is based on the nearly 3,000 plaintiffs subjected to unlawful behavior by Southern Response—who had assumed responsibility for claims sold by private insurer AMI, which was liquidated in 2012. 

A new report from Wolverhampton University Professor Peter Walton shows a 50% increase in the UK insolvency litigation market over the last four years. Given the financial stress caused by COVID-19, we can only assume that the increase in insolvency litigation will continue apace. 

Burford Capital, a worldwide leader in legal finance, has announced the development of a global association for commercial legal finance. Expectations are that it will be finalized before summer is out.

It’s rare to see rulings that specifically address the finer points of litigation funding and remuneration therein. In February of this year, however, a pair of separate rulings have garnered mass attention.