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Burford Capital CEO Christopher Bogart and co-founder Jonathan Molot have shot back at US-based hedge fund Muddy Waters’ claims that Burford misreports its earnings, and is ‘arguably insolvent.’ In a call to investors earlier today, Bogart characterized the allegations as ‘false and misleading,’ and sought to assure investors by stating that both he and Molot had personally invested $4MM into Burford’s stock after the Muddy Waters announcement was made. 

There’s been much talk about litigation funding and legal fees, and whether the existence of funding generates an inherent conflict of interest. While there are some legitimate concerns here, the anxiety is mostly overblown. In an increasingly-commoditized industry, litigation funders aren’t likely to risk repetitional harm by directing or even influencing case management and strategy. 

All of that said, legal fees are only one side of the coin. Funders also cover case expenses, and here is an area where conflict of interest may actually arise. 

Tom Girardi, of the eponymous law firm Girardi Keese, has been ordered to deliver to his financials to the court after he failed to pay $6MM of a $16MM settlement with Law Finance Group. Law Finance sued Girardi for failure to repay a $15MM loan, and eventually settled on the $16MM figure, only to claim that Girardi skipped out on the final $6MM payment.

US-based hedge fund Muddy Waters has caused some serious ripples with its allegations against Burford Capital. In a recently released video, Muddy Waters CEO contends that Burford’s largest shareholder – Invesco – essentially bailed out Napo Pharmaceuticals, a company whose legal claim Burford was financing. 

A new survey by Validity Finance and ALM has yielded some impressive results for litigation funders to harp onto. A full 98% of attorneys surveyed who had used litigation finance at least once in the past said they would do so again, and 93% found their experience to be positive. 

London, 5th August 2019, Augusta, the UK’s largest litigation and dispute funding institution by case volume – today announces the appointment ofAnna Malek as Head of HR, based in London. Anna joins from software and services group Editec where, as Global Head of HR, she managed the full range of people related functions.

As litigation funding gains mainstream acceptance, there have been more and more headline-making allegations which are casting a shadow over the industry. Despite the funding community’s best efforts to assuage such ethical concerns, they persist and continue to plague the nascent market. 

Legal Tech is slowly-but-surely permeating all aspects of the Legal Services industry. And one fast-moving sector of Legal Tech is billing software, which seeks to scrape data on legal costs to better predict how much lawyers will end up charging on a given claim. 

With no automatic enforcement mechanism in place and only 60% of awards under £10,000 being fully enforced, the UK is experiencing a crisis of enforcement. Given that litigation funders must take collection risk into account when proposing an investment thesis, it’s worth examining the current enforcement climate in the UK in greater detail.

Last year, the New York City Bar Association issued an advisory opinion suggesting that funding agreements between lawyers and third party funders violates ABA Model Rule 5.4(a), which prohibits fee sharing with non-lawyers. The opinion has sparked furious debate (and much consternation) in the litigation funding community ever since. But practically speaking, how has the NYC Bar’s opinion impacted law firm funding? 

Recently, law firm Kirkland & Ellis announced a ten-fold increase in investment dollars towards contingency-fee plaintiff-side claims. Alternative fee arrangements have been the most profitable component of the law firm thus far, so management figures ‘why not roll the dice’ on what’s already been working? The question now is: is Kirkland’s approach a harbinger of things to come? And if so, how will this impact litigation funders down the road? 

Dividex, the international securities class action broker and case manager, wanted in on a Novo Nordisk class action after the stock shed over $50B in the wake of fraud allegations. The only problem? No litigation funders would bite, given that the Danish Pharma company would have to face the scales of justice on its home turf (international securities actions can no longer be tried in the U.S., pursuant to a 2010 Supreme Court decision). And since funding is needed to get an international securities action off the ground, the deal was dead in the water. Until, that is, Dividex packaged the deal into its own version of a portfolio funding arrangement. 

GoFundMe recently cancelled an Australian rugby player’s crowdfunded legal campaign, and the story made international headlines. Now some experts are scrutinizing the ethical and practical concerns of crowdfunding litigation; some of which will sound very familiar to litigation funders, yet others are unique to the crowdfunding niche. 

After being tossed out by the High Court, the $4 billion Therium-funded Google class action has reached the UK Court of Appeals. The lead applicant, Richard Lloyd – a former consumer rights organization director – is claiming Google owes 4.4 million Brits hundreds of pounds each for its nefarious ‘Safari Workaround’ software, which was allegedly used to spy on iPhone users.  

Law firm Phi Finney McDonald and litigation funder Therium Capital Management are filing a class action which alleges that Domino’s underpaid delivery drivers and in-store workers. Estimates put the total claim amount around AUD $100MM. 

Anyone involved in litigation would love to have a crystal ball to help predict how things will pan out. If one UK-based startup is to be believed, that crystal ball may already exist. 

Law firm Adina Thorn is bringing a class action – funded by Harbour Litigation Funding – on behalf of homeowners who experienced damage to their properties due to leaky cladding installed by the James Hardie multi-national conglomerate. The James Hardie parent company is based in Ireland, and attempting to exclude it and all international subsidiaries from liability, leaving the New Zealand subsidiary as the sole defendant. However, Thorn claims the New Zealand subsidiary is insolvent, and that the parent company should therefore be on the hook. 

Kirkland & Ellis – the nation’s largest law firm by gross revenue – has announced plans to expand its contingency-fee practice with the launch of a division that focuses on the high risk/reward fee arrangement. Kirkland has represented over 100 plaintiff-side cases on a pure contingency basis over the past decade, and now seeks to expand that number by as much as 10x.

With the U.S. Chamber of Commerce leading the effort to regulate – or even fully abolish – litigation funding, the nascent industry has already made some powerful enemies. The ‘War…

The Law Commission of New Zealand suspended its examination of litigation funding last year due to resource constraints, but in the wake of several high profile class actions funded by…

SYDNEY, AUSTRALIA 20 JUNE 2019: IMF Bentham (ASX:IMF) (operating in the US and Canada as Bentham IMF) announces the launch of a new US$500 million fund (‘Fund 5’) to underwrite non-US disputes around the…

Consumer legal funder RD Legal has filed its opening brief in the 2nd Circuit Court of Appeal. The funder is appealing Judge Loretta Preska’s June 2018 order to void its…

Recently, Conagra Brands and Kraft Heinz sued Tyson Foods and other chicken suppliers for allegedly conspiring to inflate prices. That comes on the back of a large antitrust claim agains…

Institutional investors continue to pour money into the litigation finance sector. The prospect of attractive returns, uncorrelated to broader equity/bond markets, which may actually increase post-recession given the influx of…

At last week’s 2nd Annual Financing, Structuring and Investing in Litigation Finance conference, hosted by IMN in New York City, the third panel of the day discussed the topic of…

UK law firm Rosenblatt went public last year, and in the process announced plans to open a litigation funding arm. The law firm now has five cases under consideration, and…

Lawdragon, a provider of free online guides for US-based legal news, has named IMF Bentham CEO Andrew Saker and Bentham IMF (the US subsidiary of IMF Bentham) CIO Allison Chock…

First there was Peter Thiel, who backed Hulk Hogan’s successful lawsuit against Gawker, and now there’s Ronald Perelman. Perelman, who runs the conglomerate MacAndrews & Forbes Group (MAFG), has been secretly…

The comment period for the NYC Bar’s recent opinion on third party funding has ended. The NYC Bar found that when funders collect a percentage of fees, the practice constitutes…

At yesterday’s 2nd annual IMN Conference on Litigation Finance, a crowd of industry participants, experts, and interested parties gathered at The Union League Club in Midtown Manhattan to discuss key…