The following article is part of an ongoing column titled ‘Investor Insights.’
Brought to you by Ed Truant, founder and content manager of Slingshot Capital, ‘Investor Insights’ will provide thoughtful and engaging perspectives on all aspects of investing in litigation finance.
The following article was contributed by Mikolaj Burzec, a litigation finance advisor and broker. He is also a content writer for Sentry Funding.
The Competition Appeal Tribunal, London’s specialist competition court, has confirmed that a special purpose company led by Mark McLaren, formerly of The Consumers’ Association, will act as the Class Representation. McLaren represents millions of motorists and businesses who bought or leased a new car between October 2006 and September 2015 against five shipping companies that imported cars into Europe.
The European Commission has already found that the car carriers fixed prices, manipulated bids, and divided the market for roll-on roll-off transport by sea. According to the Commission, the carriers had agreed to maintain the status quo in the market and to respect each other’s ongoing business on certain routes, or with certain customers by offering artificially high prices or not bidding at all in tenders for vehicle manufacturers.
The class action follows the EC decision. It is one of the first actions of its kind in the UK and damages for car buyers are estimated at around £150 million.
The class representative
Mark McLaren has set up a non-for-profit company – Mark McLaren Class Representative Limited – specifically to bring this claim. Mark is the sole director and only member of the company and therefore has full control over it.
In a collective action, the class representative is responsible for conducting the action on behalf of the class. His duties include:
An independent advisory committee will be appointed to assist in the decision-making process.
The claim
From 2006 to 2012, five major shipping companies were involved in a cartel that affected prices for the sea transport of new motor vehicles, including cars and vans. During the period of the cartel, the shipping companies exchanged confidential information, manipulated tenders and prices, and reduced overall capacity in the market for the carriage of cars and vans.
The cartel resulted in car manufacturers paying too much to transport new vehicles from their factories around the world to the UK and Europe. Customers who bought a new car or van between 18 October 2006 and 6 September 2015 probably also paid too much for the delivery.
This is because when a manufacturer sets the price of its new cars or vans, it takes into account the total cost of delivery, including shipping costs. For simplicity, car manufacturers usually divide their total delivery costs equally among all the cars and/or vans they sell. When a customer buys a new car or van, he pays for “delivery”, either separately or as part of the on-road price.
Although the car manufacturers themselves have done nothing wrong, customers who bought a new car or van between 18 October 2006 and 6 September 2015 are likely to have paid an increased delivery charge.
The European Commission has already decided to impose fines of several hundred million euros on the shipping companies. The lawsuit seeks to recover these extra costs from the shipping companies who were involved in the cartel.
The Competition Appeal Tribunal’s decision
The Tribunal has authorised the claims to proceed as a class action. This means that millions of motorists and businesses could be entitled to compensation and these individuals and companies will now automatically be represented in court unless they choose to leave (opt-out) the claim.
McLaren is the first Collective Proceeding Order judgment in which the Tribunal has explicitly considered the position of larger corporates within an opt-out class with the defendants having argued that big businesses should be removed and treated on an opt-in basis. The Tribunal’s refusal to treat larger businesses in the class differently to smaller corporates and consumers is noteworthy, and these aspects of the judgment will no doubt be of interest for the future proposed collective actions which feature businesses.
McLaren further explored the appropriate legal test applied to the methodology in order to establish a class-wide loss at the certification stage.
The Tribunal denied the defendants’ strike out request, which was based on purported inadequacies in the claimant’s methodology. The Tribunal concluded that its job at the certification stage is not to analyse the expert methodology’s merits and robustness; rather, the Tribunal will determine whether the methodology provides a “realistic chance of evaluating loss on a class-wide basis.” It further stressed that this does not imply that the Tribunal must be convinced that the approach will work, or that the methodology must be proven to work.
The Tribunal emphasized the critical role of third-party funding in collective actions, as well as confirmed that the potential take-up rate by the class is not the only measure of benefit derived from the proceedings, with another benefit being the role of collective claims in deterring wrongful conduct. Despite the fact that the sums involved per class member may be little, the Tribunal focused on the fact that the total claim value is significant and that the majority of class members would be able to retrieve information about vehicle purchases.
In the end, the Tribunal managed two issues that have been discussed in earlier decisions: inclusion of deceased consumers in the class and compound interest. Corresponding to the previous, McLaren was not allowed to change his case to incorporate potential class individuals who had died before procedures being given, because of the expiry of the limitation period. Regarding the latter, in contrast to the judgment in Merricks last year, the Tribunal was ready to certify compound interest as a standard issue even though it is common just to a part of the class who had bought vehicles using finance agreements.
The Tribunal’s decision is conditional upon McLaren making adjustments to his methodology to account for the ruling on these points, and any determination as to the need for sub-classes.
Case name and number: 1339/7/7/20 Mark McLaren Class Representative Limited v MOL (Europe Africa) Ltd and Others
The whole judgment is available here: https://www.catribunal.org.uk/judgments/13397720-mark-mclaren-class-representative-limited-v-mol-europe-africa-ltd-and-others
The following article was contributed by Mikolaj Burzec, a litigation finance advisor and broker. He is also a content writer for Sentry Funding.
The Competition Appeal Tribunal, London’s specialist competition court, has confirmed that a special purpose company led by Mark McLaren, formerly of The Consumers’ Association, will act as the Class Representation. McLaren represents millions of motorists and businesses who bought or leased a new car between October 2006 and September 2015 against five shipping companies that imported cars into Europe.
Burford Capital—the leading global finance and asset management firm focused on law—today announces that it has crossed a significant milestone in its groundbreaking initiative designed to increase diversity in the business of law, with more than $100 million in cumulative Equity Project commitments made to back commercial litigation and arbitration led by female and racially diverse lawyers.
The following article is part of an ongoing column titled ‘Investor Insights.’
Brought to you by Ed Truant, founder and content manager of Slingshot Capital, ‘Investor Insights’ will provide thoughtful and engaging perspectives on all aspects of investing in litigation finance.
Oasis Financial announced today the change of its parent company name to Libra Solutions. The change was filed on January 10, 2022, and the company formally launched the new name February 23, 2022.
The UK Competition Appeal Tribunal (CAT) has certified a collective action against multiple maritime car carriers who operated an illegal cartel to manipulate car shipping prices. Certification clears the way for the class action filed by consumer rights champion Mark McLaren, who has instructed has instructed Scott+Scott UK LLP as solicitors on behalf of consumers and businesses who purchased or leased new cars or vans, to proceed to trial.
The leading trade association for the consumer legal funding industry, Alliance for Responsible Consumer Legal Funding (ARC), a nonprofit organization, announces the relaunch ARCFinanciallyFit.com (Financially Fit), a website providing consumers with tools to achieve financial wellness, bolster emergency savings, and better prepare for a rainy day.
London’s specialist competition court, the Competition Appeal Tribunal, has today given the green light to a class action on behalf of millions of motorists and businesses, who bought or leased a new car between October 2006 and September 2015, to claim against 5 shipping companies that imported cars into Europe.
This past Tuesday, Litigation Finance Journal hosted a panel discussion and Q&A with a global swathe of litigation funding experts. The subject was key trends facing the industry in 2022, and the panel did not disappoint by delivering in-depth responses across a broad array of subjects.
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Social inflation—the impact of rising litigation on insurers’ costs—increased claim payouts for commercial auto insurance liability alone by over $20 billion between 2010 and 2019, according to a new paper by Insurance Information Institute (Triple-I), in partnership with the Casualty Actuarial Society (CAS).
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Victims of wrongful termination often suffer a one-two punch. Explains Rory Donadio, founder of Tribeca Lawsuit Loans, “Not only do they face a confusing maze of government claim procedures and lengthy court cases, but their financial security is also compromised.” Anecdotal evidence suggests that many unlawfully fired employees fail to pursue claims because they have to invest their energy into simply providing for themselves and their families.
Burford Capital, the leading global finance and asset management firm focused on law, today announces that arbitration expert and legal finance industry veteran Mick Smith has joined as Principal in its London office. He will join over 40 colleagues in London, and more than 140 globally. Smith will focus predominantly on the continued expansion of Burford’s business in Europe and especially its industry-leading role in global arbitration matters.
Kerberos Capital Management was named as a finalist in the private credit category of the 2021 Industry Innovation Awards by Chief Investment Officer (CIO) magazine. The Innovation Awards celebrate the “very best of institutional investing” and recognize management firms that have “truly and reliably enhanced the portfolios of their clients” using innovative approaches to asset management, according to CIO. Finalists and winners are chosen by the CIO editorial team in conjunction with an advisory board of chief investment officers.
Forbes Ventures provides a further update on its first Litigation Funding Securitisation and an update on the suspension of trading in its shares.
Litigation funder Validity Finance has announced that Joyce D. Slocum, currently President and CEO of Texas Public Radio, has joined its board of directors.
On Wednesday, December 15th, Litigation Finance Journal hosted a special digital event featuring insights from new entrants into litigation funding. A panel featuring Charles Schmerler (CS), Senior Managing Director of Pretium Partners, Zachary Krug (ZK), Director of Signal Capital Partners, and Mark Wells (MW), Co-Founder of Almatura, discussed deal sourcing fundraising and hiring from a new entrant’s perspective.
On the latest episode of the LFJ Podcast, Steven Shinn, founder of FinLegal, described the solutions his platform provides for both funders and lawyers, and explains his company’s points of differentiation with other third party platform providers.
Legal-Bay, the premier Pre Settlement Funding Company, announced today that over 150 lawsuits have been filed in the Astroworld tragedy that took place at Houston’s NRG Stadium last month. The event was sponsored by Live Nation and intended to be a showcase for rapper Travis Scott. Unfortunately, however, the day took a darker turn when attendees rushed the stage causing numerous injuries, and in the case of ten people, death.
In September, Bloomberg Law surveyed 38 litigation finance providers, 37 lawyers, and 75 legal professionals in the UK, US, and Australia on their interest in and use of Litigation Finance. This survey provides a stirring look at developments and attitudes within the industry.
Delta Capital Partners Management LLC, a global private equity firm specializing in litigation and legal finance, has announced the hiring of new senior executive Michael Callahan.
The following post was contributed by Guido Demarco, Director & Head of Legal Assets of Stonward.
In March 2021, the European Parliamentary Research Service published a study on Responsible Private Funding of Litigation. This study was later supplemented by a draft report prepared by the European Parliament’s Committee on Legal Affairs in June 2021. Both documents, the study, and the draft report, contain certain recommendations to regulate litigation funding and criticize the economic costs that these funds impose on their clients by referring to them as “excessive”, “unfair” and “abusive”.
Zachary Krug has joined Signal Capital Partners, a London based special situations fund with over $2.5B AUM, where he will be leading a new strategy for litigation finance and legal assets. Funding will be through SLF Capital Limited, a joint venture focused on legal assets.
Leading US mass tort and personal injury firm Pogust Millrood is to merge into the rapidly expanding international operation of global firm PGMBM.
