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Among the chief concerns over the rise of litigation funding are the potential growth of frivolous lawsuits, and funder control over case decisions. While those worries haven’t exactly panned out as many industry skeptics had imagined, they remain nagging concerns as the funding industry continues to expand with new entrants and capital sources. One unifying solution to both of these ethical problems is to mandate that lawyers who partner with litigation funders operate on success-based fee arrangements. 

A bevy of funded class actions are making their way through New Zealand courts in 2020, sparking debate on issues such as opt-in/opt-out, and other procedural components of how the nascent class action regime should operate. 

Jonathan Mitchell of Mitchell Law PLLC has filed 21 class actions against public sector unions over the past two years. According to a recent court filing in which Mitchell disclosed the source of his funding, Chicago-based Juris Capital has been financing his class action claims. 

With over 600 class actions filed in Australia since the regime was first allowed 27 years ago, litigation funders are finding the class action sector to be a wellspring of potential investment. Yet the rise and subsequent fall of common fund orders underscores the backlash that is growing against the sector.  

In a bid to reduce the number of class actions in Australia, the Aussie Supreme Court has struck down common fund orders, which allow courts to order that all members of a class pay a portion of their settlement or payout to the litigation funder, regardless of whether they signed an agreement with that funder. The ruling changes the game for class action funding in Australia. 

LawCoin, a company that bills itself as the first platform for investing in litigation finance on the blockchain, has announced plans to tokenize its litigation finance portfolio investment vehicle, LawCoin Investments.

Arowana, the New Zealand company that established Intueri Education Group in 2010, took it public in 2014, then liquidated it in 2017, is facing a potential class action lawsuit by Adina Thorn Lawyers and funded by LPF Group. However Arowana has clearly stated that the company is confident any class action against it stands no chance of success.

Litigation funders have long been vying to get a piece of Obamacare insurance claims, which allege the federal government failed to make good on a host of payments to health insurers. Now that the Supreme Court has decided to hear several of those claims, funders have begun reaching out to insurers with more attractive terms and pricing. 

Litigation funder LPF Group is funding a shareholder class action against the now-defunct insurance company CBL Corp., as well as its former directors. LPF has complained to ASIC, an Australian regulator, about rival funder IMF Bentham’s proposed action, which may end up targeting only CBL and not the former directors. 

Burford Capital’s Equity Project turned one year old last month. The initiative – launched by senior managing director Aviva Will – is aimed at incentivizing female lawyers to take greater risks. The mechanism for accomplishing this is a $50MM fund that can only be used for claims where a female attorney is first-chair, plaintiffs’ lead counsel or on a plaintiffs’ steering committee, or if the claimant is represented by a female-owned law firm. 

National Australia Bank (NAB) is facing a myriad of regulatory actions and lawsuits which is leaving company executives in a lurch. After voluntarily self-reporting potential compliance issues to regulators, the bank announced to shareholders in its annual report that it is facing mounting legal and financial pressure in the wake of revelations from the Hayne Royal Commission. 

A new survey by Konexo, the alternative legal services department of Aussie law firm Eversheds Sutherland, has found that nearly 2/3 of in-house counsel surveyed report increased pressure to reduce costs, while resources continue to dwindle. Yet despite this, GCs are loathe to outsource work to external counsel, instead looking for alternatives to the traditional law firm model.

The global construction industry is one that is utilizing litigation finance to greater and greater degrees. With heavy CapEx, a high rate of legal disputes and low margins, construction firms and contractors are finding solace in third party litigation finance. 

After the state of West Virginia amended article 6N of its Consumer Credit and Protection Act this past summer, the litigation funding industry has essentially been prevented from operating in the state. And that’s exactly what industry opponents were hoping for. 

As we turn the corner into 2020, Bloomberg Law analyzes the results of its own Litigation Finance Survey to account for the challenges and opportunities facing the industry at this pivotal moment. 

Ross Asset Management (RAM) investors are suing Australia and New Zealand Banking Group (ANZ), alleging that the bank breached its fiduciary duties to investors. The first legal hurdle has emerged, with ANZ filing a ‘strike-out’ application, asking the court to dismiss the motion entirely. 

A UK Court of Appeal has approved the enormous U.S.-style class action against Google in the now infamous ‘Safari workaround’ claim. 4 million claimants will be represented in an opt-out action brought by Mishcon de Reya and backed by Therium Capital Management. 

IMF Bentham is funding a shareholder class action against New Zealand-based CBL Corp., claiming the company failed to disclose that the Reserve Bank of New Zealand had been investigating its solvency for several years. CBL has since entered liquidation, leaving many shareholders out in the cold.

The judge in a product liability MDL in the U.S. District Court for the District of New Jersey has rejected the defense’s motion to discover whether the plaintiff is using litigation funding. 

45 general counsel and chief legal officers have signed a letter which requests that the Committee on Rules of Practice and Procedure amend the Federal Rules of Civil Procedure as pertains to three specific areas of MDL litigation: census of claims, interlocutory appellate review, and litigation funding. 

Couples save for weddings, not divorces. As a result, many are cash-strapped and taken aback by the high costs of divorce. This places undue burden on attorneys, who must often choose between working on contingency or turning away clients. Fortunately, divorce attorneys can leverage divorce funding options, which allow receivables to be covered as they emerge. 

The recent LF Dealmakers conference in NYC highlighted several key issues facing the funding industry. And there exists a clear overlap between litigation funding and IP, given that IP is the most-funded legal sector at the moment (additionally, the organizer of LF Dealmakers, Wendy Chou, hosts an annual IP Dealmakers event). So naturally, one of the topics discussed at LF Dealmakers is how IP lawyers should interact with the funding market. 

Burford Capital has commissioned a study by Joshua Mitts of Columbia Law School which found that there is indeed evidence to back the funder’s claim that it was the victim of market manipulation in the wake of the Muddy Waters attack which shed 50% of the stock’s valuation in a single day. Burford is presenting the study in court to compel the London Stock Exchange to release the names of the short-seller sho it says manipulated the trading. 

Third party funding is taking off in India, thanks in part to a robust construction and infrastructure sector that is asset and debt-heavy, yet encumbered with the prospect of litigation. 

New Zealand government insurer Southern Response wants to eschew a Court of Appeals order that  a portion of its settlement go to litigation funder Claims Funding Australia. Maurice Blackburn and Claims Funding took over representation for 3,000 claimants after a New Zealand court allowed an opt-out class action for only the second time in history. Southern Response is weighing an appeal to the decision, preferring to deal with the claimant pool directly. 

Defunct New Zealand firm Felted Carpets – which collapsed just two years after its IPO – is being sued on behalf of over 3,000 investors. Harbour Litigation Funding had funded the claim up through 2015, with ‘Stage 2 Funding’ coming from a group of investors including Joint Action Funding. Now, the Supreme Court has ordered a $1.65MM security for costs order, which the plaintiffs are contesting. 

The latest issue of Harvard Law School’s Center on the Legal Profession’s ‘The Practice’ magazine features a robust examination of the litigation finance industry, including how the industry operates, who the major players are, how deals get done, and what law students should do to secure a career in legal finance. 

Well, how often does this happen? A government agency officially declares itself unconstitutional. That’s what the Consumer Financial Protection Bureau (CFPB) just did, as director Kraninger sent letters to House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell, stating in no uncertain terms that the agency is unconstitutional given the single-director-removable-only-by-POTUS structure. 

LCM has been funding a class action against the Gladstone Ports Corporation (GPC) on behalf of local fisheries and fishermen, who claim that GPCs port expansion project led to the collapse of the fishing market there. GPC had been arguing that LCMs funding agreement is unenforceable on the basis of champerty and maintenance, but the court just upheld the agreement as not champertous. 

Legalist, the San Francisco-based AI-driven litigation funding platform, has landed a $100MM funding round. The firm will deploy the capital into 100-200 cases of at most $1MM each.