Commercial trucking insurance rates have climbed steadily over the last decade. Despite price hikes, the industry has underperformed for the last nine straight years. The problem? According to some, Litigation Finance coupled with ‘nuclear verdicts’ is helping losses far outpace profits.
A recently released California State Bar opinion on ethics is likely to hold sway in the legal world despite differing markedly from the NYC Bar and ABA recommendations. The opinion covered legal finance and the ethics in utilizing it, and involved multiple rounds of public commentary—including funders like Burford Capital.
As the COVID pandemic continues to impact every area of business, legal professionals are finding ways to transition, diversify, and combat the challenges that face them. Legal tech in particular has had to adapt to the pandemic with lighting speed—with firms forced to discover new means of remote working, virtual meetings, and paperless filing.
How exactly is international arbitration changing? The International Arbitration Conference set out to answer that very question. This year’s conference shined a light on how Australia became a favored destination for funded arbitrations around the globe.
A case representing roughly 100,000 women and children targets African mining company Anglo American. With litigation funding provided by Augusta Ventures, the case will pursue claims that those living near the Kabwe lead mines were poisoned.
A source has revealed that controversial billionaire Jonathan Munz is funding a challenge to the Victorian government’s recent COVID lockdowns. While not the sole financier, Munz is reportedly sinking at least $1 million into the case. That shouldn’t break the bank, as Munz’s reported assets top $1.5 billion.
The use of legal finance is increasing in several important offshore jurisdictions. But how well is that going? Burford Capital’s recent roundtable discusses the effectiveness of legal finance in maximizing recovery in insolvency cases around the globe.
A recent study of in-house counsel and private attorneys affirms that the use of litigation funding is up more than 100% since 2017. Burford Capital released the study of roughly 500 legal professionals, which confirms the explosive popularity of the practice.
Law firms and businesses alike are making even greater use of Litigation Finance in the wake of COVID. That’s good news for Burford Capital, whose listing on the New York Stock Exchange went live this week. Recent reporting on the popularity of the practice, combined with this new NYSE listing and the formation of the ILFA, makes it clear that litigation funding is on the rise.
As many as 8,000 people are believed to have been directly impacted by Western Australia’s practice of kidnapping and enslaving children in the 1940s and beyond. A class action has been filed to collect wages that were never paid to the workers. So far, at least 1,000 of those affected have registered their intent to seek remuneration.
The COVID pandemic has led to the need for creativity, quick thinking, and adaptability for many legal firms. Roughly half of all firms and in-house counsel alike are expecting drops in revenues (and consequently, budgets) within the next year. But this doesn’t have to be dire news.
Even before the pandemic gained a foothold, European courts felt the impact of COVID. Litigation over insurance, safety precautions, employment, and business interruption was rampant. Such litigation is only expected to grow—even after COVID is under control.
As Litigation Finance permeates the mainstream and regulation catches up, the issue of disclosure remains contentious. At the time that a funding deal is created, there’s no real way to know whether or not courts will require disclosure of the agreement.
As 2020 nears its end, firms are straining to reduce the impact of Coronavirus on earnings—which for some means cutting staff even as they ensure that their best players won’t be recruited by other firms. Given that, it makes sense that firms holding strong litigation portfolios would want to consider dispute financing.
It could be argued that Burford Capital is handling the pandemic better than most. The company transitioned to a remote working platform early on, and have adapted to what’s being called “the new normal” with aplomb. In the months that followed, courts, businesses, and even schools shifted to remote operations—meaning court cases could finally continue.
One of the most attractive aspects of Litigation Finance as an investment is that it’s uncorrelated with the rest of the market. Even as the Coronavirus pandemic became increasingly impactful, funders assured investors that returns would remain high.
A claim of over $115 million in damages, filed by Russian oligarch Farkhad Akhmedov (along with owner Straight Establishment) has been dismissed by the high court of Dubai. The claim revolved around a 115-meter superyacht, the MV Luna, which had been held as part of a divorce settlement.
When Litigation Finance was still making a name for itself, the American Bar Association was among the first organizations to write researched commentary on it. The white paper published by the ACA Commission on Ethics remains influential today.
On Wednesday October 7th, Litigation Finance Journal hosted a quarterly roundup on the major issues impacting the commercial litigation funding industry. The 45-minute panel discussion was moderated by Ed Truant, founder of Slingshot Capital. Panelists included Jim Batson, Senior Investment Manager of Omni Bridgeway, Nick Pontt, Managing Director of Affiniti Finance, Mick Smith, founder of Almatura, and Paul Haskel, partner at Richards, Kibbe & Orbe, LLP.
The rise in bankruptcies and business insolvencies due to COVID cannot be denied. One side effect of this involves the exploration of how best to facilitate recovery and refinancing. Ultimately, legal funding may provide the best risk/reward ratio.
A settlement in the IAG class action is currently under review after preliminary hearings. The proposed $138 million settlement comes after the company was ordered by ASIC to refund customers for add-on products that were essentially without value.
It’s no secret that when the economy is tough, litigation increases. As the CEO of LexShares, Jay Greenberg, explains–even those who don’t normally use litigation funding are reaching out. Businesses are more anxious than ever to collateralize existing lawsuits and take steps to ensure that any impending claims can be litigated effectively.
Litigation Finance has been slowly growing since it first gained acceptance during the last financial crisis. In addition to a funding model that pairs funders with a single case, litigation funding can also come in the form of claims monetization.
