Australia’s Litigation Finance community is in a state of flux, as new regulations are implemented, and industry players scramble to remain in compliance. Understanding litigation funding for companies in liquidation is essential in order to reap maximum benefits.
The launch of the International Legal Finance Association (ILFA) is a first-of-its-kind event. Burford Capital is the force behind this global organization, fueled by the exciting industry growth that has taken place in recent years. What can we expect from this newly formed entity?
At least six of the world’s most successful litigation finance entities are forming a global coalition called the International Legal Finance Association, or ILFA. Founding members include Burford Capital, Omni Bridgeway, Therium Capital Management, Harbour Litigation Funding, and Woodsford Litigation Funding. Also joining the association are Parabellum Capital, DE Shaw & Co, Nivalon AG, Fortress Investment Group, and Validity Finance.
Does a litigation funder have a vendetta against Queenstown mayor Jim Boult? That’s the contention after a reveal that Chris Meehan is connected to the funding of a case against Boult. The case alleges that Boult’s companies, Stonewood Homes and Holmfirth Group, traded while insolvent. Millions of dollars were lost, and investors want their money back. Meehan himself is involved in a few nearby developments, one of which is in Queenstown.
As new regulations for funders in Australia take effect, the Litigation Finance landscape enters a new era. In addition to the requirement that litigation funders hold a license and the new classification of funds as ‘managed funding schemes’, ASIC has issued some relief for funders.
Much has been made about the interest charged by consumer legal funders in mass tort cases. One study suggests that interest rates are as high as 60%. Some are using such figures as the basis for clamping down on the practice of Litigation Finance, even if that comes to the detriment of those who rely on such funding in the pursuit of justice.
It’s no secret that not everyone is a proponent of Litigation Finance. In Australia, new regulations threaten to permanently alter how class action suits are managed, and how litigation funding can be used to assist them. Andrew Saker of Omni Bridgeway, a major funder, is speaking out.
IP law is a vital part of the Litigation Finance landscape. Patent and intellectual property litigation are industry mainstays, and represent the most-funded legal sector. As such, changes in the IP ecosystem impact the Litigation Finance world as well.
Since the impact of COVID, clinics and hospitals are besieged by new patients they can scarcely accommodate. Beds are full, basic supplies like PPE have run short, and even the best minds in medicine cannot agree on how to stop the spread of the virus. The only thing worse than being sick or injured may be to have that illness or injury exacerbated by an error by a medical professional.
The Judgement Fund is used by the Bureau of Fiscal Services to provide remuneration to plaintiffs who successfully sue the federal government of the US. This arm of the US Treasury Department has been given leave by the Supreme Court to use the fund to pay insurers.
Litigation Finance is deepening its presence in the shareholder class action scene—challenging businesses when those who invest in them lose money. HESTA, a health-industry-specific fund, is now funding 21 class-action suits representing shareholders.
Multinational companies are choosing international arbitration to settle disputes in greater numbers than ever. For those who make this choice, Litigation Finance can take the financial stress out of the ordeal. Third-party legal funding can be used commercially and internationally.
Current economic conditions are making it more challenging to run a business regardless of industry. In the legal world, budgets are shrinking and GCs, already stretched to the brink, are taking on even more costs. An ability to adapt to circumstances while finding ways to save money is of the essence.
The FCA or ‘False Claims Act’ has secured more than $3 billion in settlements or judgments in civil cases in the 2019 fiscal year alone. Much of that relates to healthcare claims, and nearly two-thirds involve relators—which is another term for whistleblowers. This is not surprising, given the widespread application of Qui Tam provisions that offer a portion of an award to whistleblowers who assist the prosecution with cases under the FCA.
At what point might a David become a Goliath? Some would say that Litigation Finance is the catalyst for such a transformation. Take the case of Akiane Kramarik and the famed portrait of Jesus she painted at age nine. Over the years, she’s been the subject of television appearances, media events, and even a big-budget film. But as she grew up, missing royalty payments and other shady dealings began to emerge.
All eyes are on a fee request from Quinn, Emanuel, Urquhart, & Sullivan. The class action, which revolved around Obamacare and insurers left unpaid after Congress neglected to pay promised subsidies, was completed in April when the US Supreme Court ruled that insurers were owed roughly $12 billion in unpaid subsidies meant to cover Americans without insurance.
India appears to be the latest country to embrace the practice of Litigation Finance—at least in theory. The Indian Prime Minister, Narendra Modi, recently spoke about foreign investment opportunities in India. One of the many types of foreign investments being encouraged is third-party litigation funding. This leaves some asking whether or not the Indian judicial system is ready for the practice.
William Farrell, Jr., Managing Director and Co-Founder of Chicago-based Longford Capital, recently appeared on a podcast hosted by K&L Gates. Farrell shared his personal journey from working as a prosecutor in the Cook County prosecutor’s office to founding and managing litigation funding powerhouse Longford Capital.
The False Claims Act has long been a source of contention in modern courts. The law, which dates back to 1863, allows anyone aware of fraud against the federal government to make a claim. The act is often cited by litigation funders, however, a court decision from earlier this week rules that such cases can be easily dismissed.
A data breach impacting at least 500 million guests is the foundation of a class-action-style suit filed against Marriott International. The alleged breaches took place between July 2014 and September 2018, and involve guests around the world, including about 30 million EU residents.
As the federal government in Australia sets up new regulations governing the Litigation Finance industry, some fear that class actions will be much more difficult to pursue. One major change requires that all funders be licensed by ASIC—and meet its expectations of competence, honesty, fairness, and efficiency. That may not seem like a tall order, but it’s not yet certain what hurdles must be cleared to obtain the required licenses.
It may be the largest privacy-related class action in history, as The Privacy Collective gears up for a class action against Oracle and Salesforce. The action, which alleges the unlawful large-scale collection and storage of internet users’ data in Denmark. Allegedly, the data was shared with multiple commercial and AdTech companies.
What happens when a liquidator lacks the resources to pursue a debt? Often times, the debtor walks away from their responsibilities. That may be changing under Singapore’s new Insolvency Restructuring and Dissolution Act (IRDA)—which took effect just two weeks ago. The Act is part of a larger overhaul of Singapore’s insolvency legislation.
For Liverpool-based Anexo Group, 2020 got off to a slow start. From Jan-June of this year, the legal services provider showed sales of GBP 36.625 million, down from 36.717 million this time last year. Share dividends are .5p a share, down from 1p per share last year. Still, the group is poised for a big finish to 2020.
Martin Tripp, formerly with Tesla, is embroiled in a case with his former employer. The case, which began in 2018, accuses Tripp of stealing and disseminating multiple gigabytes of confidential trade secrets. In turn, Tripp denies all wrongdoing and describes himself as a whistleblower exposing evidence of vital safety concerns and company fraud. He is countersuing Tesla for defamation.
Fintech credit professional Rob Cottingham has been appointed to Chief Credit Officer at ME Group, a Cheadle-based firm. Cottingham takes on this new role that will report to executive chairman Bruce Walker—who is also new to the business. These appointments herald a new phase in a long-term growth strategy for the company, as it moves toward becoming a leader in consumer litigation funding.
Startups are often strapped for cash and rushing to meet deadlines, so what happens when your startup suddenly has to fund an unexpected legal battle? That’s what happened when video startups Eko and Quibi found themselves in a legal skirmish. Both companies are relatively new, and each has a huge corporate entity at its back (Disney/eBay and Walmart, respectively).
The concept of Litigation Finance is a simple one. A plaintiff with a valid claim can seek third-party financing to take that claim to court. If the claim is successful, the funder gets an agreed-upon percentage of the award, or a multiple of the investment, or some combination thereof. If the claim isn’t successful, the funder walks away with nothing. That simple model has grown by leaps and bounds in recent years, and is now even more powerful given the pandemic and subsequent lockdown.
Did social media giants like Twitter, Google, and Facebook conspire to kill cryptocurrency in 2018? JPB Liberty, led by Andrew Hamilton, is filing a class action against social media. In a recent statement, Hamilton claimed the assertions would be “pretty easy” to prove.
