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Tax disputes are common, yet notoriously difficult to complete. They’re also expensive, complex, can take years to fully resolve and even longer to complete structured payments. When large businesses and corporations are involved, existing rules make the situation even more complicated. Litigation Finance is commonly sought in class actions and other large litigation. But now some suggest that there’s a place for litigation funding in the world of tax disputes.

Generally speaking, a corporate liquidation shouldn’t take longer than a year. Yet it often does. There are myriad reasons for this, but one of the most common is the existence of NRRAs, or Not Readily Realizable Assets.

A trade group comprised of Litigation Finance entities was a long time coming. Over the last decade, the industry has evolved from a niche service used in very specific circumstances to a multi-billion-dollar industry spanning the globe. The formation of the International Legal Finance Association (ILFA) is a welcome addition to the litigation funding landscape. 

As the Litigation Finance industry has grown, some parts of the world have met the practice with suspicion. Some countries have suggested or enacted legislation designed to encumber and restrict the process of third-party funding in litigation. In the wake of COVID-19, however, the need for the practice has been affirmed.

Unless you are new to the world at large, you know that corporate misconduct happens. And sadly, it’s not always appropriately consequenced. In Australia alone, over a billion dollars has been paid or offered to customers as part of awards or settlements for misconduct.  

Understanding how to assess the value of claims is an essential part of Litigation Finance. Any reputable funder will have their own in-house team of analysts and experts in a variety of disciplines. One way to better understand the process, is with case studies.

As Litigation Finance has grown, so has industry suspicion over the practice. Some groups are obsessed with the idea that lit fin requires greater oversight and even reform. In August of this year, the ABA distributed its Best Practices for Third-Party Litigation guidelines. This document is the first time the ABA has formally addressed Litigation Finance since 2012.

A contentious legal battle between artist Akiane Kramarik and Carole Corneliuson of Art & SoulWorks is well underway. The artist earned worldwide acclaim after an appearance on the Oprah Winfrey show when she was only nine. Since then, her art has been reproduced and sold around the globe. As financial discrepancies emerged and poor reproductions of Kramarik’s work came to light, legal action was taken to dissolve the business relationship and prevent Art & Soulworks from selling more of Kramarik’s work.

Rebecca Berrebi is a litigation consultant whose firm, Avenue 33 LLC, provides insight and advice to a variety of clients. Her expertise spans many industries and she has clients across the globe—including Europe, Asia, Africa, Latin America, and North America.

Should energy companies be able to sue governments when climate change impacts their business? A potential overhaul to the UK private court system might have prevented that altogether. However, negotiators have ruled out any new rules that would prevent fossil fuel and other energy-producing companies from suing governments.

Nikola, a company that calls itself a pioneer in electric vehicles, has been accused of deception by a Hindenburg Research report. The report refers specifically to videos created to make prototype vehicles appear fully functional, and other alleged deceptions about the status and efficacy of its newest tech. Could a shareholder class action be forthcoming?

Nigeria’s Ministry of Justice has been asked to weigh in on a secret deal between two Lagos-based solicitors (Johnson and Johnson) and an offshoot of Drumcliffe Partners—an American litigation funding firm. The deal focuses on monies recovered from the OPL 245 oil scandal, after rampant misuse by Dan Etete. If the secret deal stands, as much as 35% of all recovered awards might then find their way to the US funder rather than the Nigerian people.

The Securities and Exchange Commission process continues as Burford Capital moves ahead with its plan for a listing on the New York Stock Exchange. The company has been listed on the AIM exchange in London since 2009. Burford announced that they have received approval for the new listing, however, official approval is still pending as customary listing conditions dictate.

The litigiousness of modern society cannot be denied. Now that so-called “nuclear” verdicts are more commonplace, insurance companies are raising premium prices to keep up. Dubbed “social inflation,” the ever-rising insurance costs are particularly impactful to property owners and real estate developers.

Some would say that the quickest way to be successful in business is to identify a need in the market—then find a way to fill that need. One person who took that advice to heart is Rebecca Berrebi, founder of a litigation funding consultancy firm that just opened.

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.