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Commercial Deals

CIO Roundtable: Art of the Deal from Terms to Returns

September 28, 2022

CIO Roundtable: Art of the Deal from Terms to Returns

A panel consisting of Sarah Johnson, Senior VP and Co-Head of Litigation Finance at D.E. Shaw, Aaron Katz, Co-Founder and CIO of Parabellum Capital, David Kerstein, Managing Director and Senior Investment Officer at Validity Finance, and Joe Siprut, CEO and CIO of Kerberos Capital Management, discussed the various investment aspects of litigation funding as an asset class. The panel was moderated by Steven Molo, Founding Partner of MoloLamken. The conversation began with new trends in the industry. Price compression came up early. Joe Siprut of Kerberos Capital Management noted he has witnessed price comparison over the past couple of years, including having seen multiple term sheets that were mis-priced. Litigation finance has always been about attractive risk-adjusted opportunities, yet if the risk remains the same and price compression remains, that reduces the attraction of the asset class. Moderator Steven Molo was surprised there hasn’t been more fallout in this regard. Aaron Katz of Parabellum pointed out how things are opening up after COVID, and that helps a lot, given that a pipeline of cases awaiting trial quickly burns through ROI. Katz countered the price compression argument, stating that he hasn’t witnessed real price compression and hasn’t found his firm to be competing on raw price. Of course this depends on which segment of the market you are looking at. The conversation then steered toward ESG, and David Kerstein of Validity noted how there are green shoots of funders getting involved in impact litigation. Yet for most commercial funders, ESG would maintain the same type of analysis as any other case–that said, funders like to have a ‘good story’ for the case, and ESG can bring that to the table. Aaron Katz mentioned Parabellum is very cautious about ESG in particular. “We think people need to be careful about labelling things incorrectly,” said Katz. There are real impact players out there, and litigation funders should be careful about loosely claiming the mantle. The next question was pretty blunt: Is there a secondary market right now? Aaron Katz thinks not “I pray for it daily.” There is a network of well-resourced institutional players who like to look at claims, but the transactions are laborious (DD challenges, information asymmetry). The secondary participant is not going to be in a direct conversation with the counter-party, and that could cause complications. One final point: Joe Siprut noted that the evolution of a secondary market is one of the main things that can really unlock a lot of investment for the industry. One of the main barriers to investment is the long lockup period investors are staring at, and if a secondary market were to materialize, that would make fundraising a much easier sell.

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Samil PwC and Lithic Equity Partners Sign MOU on Third-Party Funding in Korea

Samil PwC has signed a memorandum of understanding with dispute funding advisory Lithic Equity Partners to build out joint capability in international disputes and third-party litigation funding for Korean companies.

As reported by Herald Business, Lithic Equity Partners announced the agreement on 2 November, with Samil PwC publicising it the following day. Lithic, an Asia-Pacific international dispute funding advisory, is led by chief executive Moon Jin-seung. Samil PwC is led by chief executive Yoon Hoon-soo.

The two firms have divided the work along their respective specialisms. Samil PwC will handle quantum and damages assessment, expert witness testimony, eDiscovery, accounting and financial analysis, valuation, forensics and tax. Lithic will assess the economic viability and funding suitability of claims, prepare dispute budgets, structure third-party funding arrangements, supply intelligence on the global funder market, and compare and negotiate funding terms.

The parties also plan joint seminars, webinars, forums and conferences, along with knowledge exchange and published research. The stated aim is to help Korean companies respond strategically as cross-border disputes grow in volume and complexity.

Hong Jun-ki, who heads Samil's audit division, said damages assessment and accounting and financial analysis are becoming more important as disputes grow more complex. Moon described third-party funding as a non-recourse financial instrument rather than merely a means of covering costs.

The tie-up is a notable signal for funding in Korea, where third-party funding remains at an early stage of adoption. Pairing a Big Four accounting practice's quantum and forensic capability with a dedicated funding advisory gives Korean claimants a domestic route to structuring funded international claims.

Commercial

New Zealand High Court Refuses Opt-Out Class Action Over Northland Outage

The High Court of New Zealand has declined to allow an Omni Bridgeway-funded claim against Transpower and contractor Omexom to proceed on an opt-out basis, finding the proposed class of up to 24,000 businesses lacked sufficient common issues.

As reported by NZ Lawyer, the judgment in *Skibo Limited v Transpower New Zealand Limited* [2026] NZHC 3275 was released on 21 October. The claim arises from the June 2024 collapse of a transmission pylon at Glorit, near Wellsford, after an unsupervised Omexom contractor removed all the nuts from three of the tower's four legs during routine maintenance. Roughly 180,000 people and 20,000 businesses lost power, some for days.

The court held that the duty of care question could only be answered with "it depends," following the Court of Appeal's approach in the cladding class action, and warned of an evidentiary vacuum beyond the two named plaintiffs. Large electricity users had bespoke supply arrangements and had taken differing protective steps, including insurance and backup generators. An adverse finding on duty would bind class members who had not opted out and who might have stronger claims, and the two named businesses were not sufficiently representative. The risk that the case would not proceed at all without an opt-out order could not overcome the absence of common issues. The court invited the plaintiffs to recast the claim or run it on an opt-in basis.

The claim is run by Lee Salmon Long and Piper Alderman on a no-win-no-fee basis with Omni Bridgeway funding. Losses have been estimated at NZ$60m by Infometrics and NZ$80m by the Northland Chamber of Commerce. LeeSalmonLong partner David Bullock has said the defendants' NZ$1m regional resilience fund was unlikely to cover actual losses.

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Omni Bridgeway Appeals Robodebt Commission Cut to Full Federal Court

Omni Bridgeway has taken its Robodebt class action commission to the Full Federal Court of Australia after the trial judge cut the funder's entitlement to roughly half of what it sought from the A$475m settlement.

As reported by Lawyerly, the funding entity Omni Bridgeway (Fund 5) Lion Pty Ltd has filed an appeal challenging the reduction, which took its commission down from approximately A$71m. The appeal was lodged in late August 2026.

The underlying proceeding, *Knox v Commonwealth*, was an appeal from the original *Prygodicz* settlement, brought to set that settlement aside so claimants could pursue a misfeasance in public office case built on evidence from the Robodebt Royal Commission. The Albanese Government announced a settlement in September 2025, and Justice Beach approved it on 23 June 2026, with the Commonwealth ordered to pay A$475,000,000. Total value of the settlement is around A$550m.

Gordon Legal, which acted for the class, has described the settlement as the A$475m sum less a 15% funding commission. In his approval judgment, [2026] FCA 1029, Justice Beach recorded submissions that the costs claimed "are excessive as is the 20% commission sought," and considered fixing the commission by reference to a multiple of five on pre-mediation costs. The judgment cited comparative authority in which the largest reduction took a commission from 30% to 18.66%, and emphasised the need for proportionality in the aggregate commission paid out of a settlement fund.

The appeal puts a significant question before the Full Court: how far a first-instance judge may go in recalibrating a contractual funding commission at the approval stage of a very large settlement.