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Community Spotlight: David Kerstein, Founder & Managing Director, Arcadia Finance

March 19, 2025

Community Spotlight: David Kerstein, Founder & Managing Director, Arcadia Finance

An early adopter of litigation finance with ten years of experience as a funding professional, David Kerstein uses his depth of knowledge and experience to serve as a trusted and strategic partner and advisor to lawyers and clients seeking to manage litigation risk and spend.

Dave is a sought-after speaker and recognized leader in litigation finance who has been named among Lawdragon’s “Global 100 Leaders in Legal Finance” and selected by Who’s Who Legal as a “Thought Leader in Third Party Funding.” Prior to founding Arcadia Finance in June of 2024 with fellow Managing Directors Ronit Cohen and Joshua Libling, he served as Validity Finance’s Managing Director and Senior Investment Officer.

In addition to co-leading Validity’s origination and structuring teams, he helped to guide Validity’s strategic growth into new and expanded markets and avenues for investment. Prior to joining Validity, Dave was a senior investment manager at Bentham IMF, now Omni Bridgeway. Before entering the world of litigation finance, Dave spent fifteen years as a trial lawyer handling complex commercial disputes at Gibson Dunn. With his deep experience as a litigator, Dave understands the landscape attorneys and their clients face when pursuing important claims and is uniquely positioned to help them navigate it. As a long-suffering Jets, Mets, Knicks and Islanders fan, Dave is keenly aware that facing adversity can build character. He knows that every litigation has obstacles that must be overcome but that those obstacles can be used as stepping-stones that guide us to achieving our goals.

Company Name and Description: At Arcadia Finance, we go beyond traditional litigation finance to provide frictionless funding, empowering clients and partners to achieve their legal goals through customized financial solutions and unparalleled support. Our seamless collaboration, clear deal terms, and broad mandate empower clients to navigate challenges, make informed decisions, and secure capital – fast. Led by industry veterans with over $400 million invested across 80+ deals, Arcadia Finance offers adaptable solutions for all–from litigation boutiques to AmLaw firms and corporations. Arcadia Finance’s mission is to invest in meritorious litigation, and with backing from multiple and flexible capital providers, we find new ways to help clients and law firms finance, monetize, and share risk on their legal assets. Our solutions include everything from traditional single-case funding and law firms portfolios, to purchasing companies or patent portfolios whose primary value is litigation. At every stage from pre-litigation to appeal and enforcement, Arcadia has the experience, flexibility, and capital to assist.

Company Website: arcadiafin.com

Year Founded: 2024

Headquarters: New York, New York

Area of Focus: With a focus on U.S.-based commercial and patent litigation and domestic and international arbitration, Arcadia Finance is open to the full spectrum of litigation-based assets, from mass torts to law firm lending to patent acquisition, including cross-border and offshore matters. We consider cases in all federal and state courts, as well domestic and international arbitrations.    

Member Quote: “Over my 25+ years of work in the legal and litigation finance industries, I’ve seen firsthand how meritorious claims can falter due to financial constraints. That’s why I’m passionate about litigation funding – it ensures that the strength of a case, not the size of a wallet, determines its outcome.”

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Commercial

Merricks Urges UK Court to Reject Innsworth’s Challenge Over £200M Mastercard Settlement Distribution

By John Freund |

The class representative in the Merricks v Mastercard collective claim has urged a London court to reject litigation funder Innsworth Advisors' judicial review of the £200 million settlement distribution, in what observers describe as the first substantive test of a Competition Appeal Tribunal settlement decision.

As reported by Law360, Walter Merricks's legal team told the High Court on Wednesday that Innsworth has already received an adequate return from the CAT-approved settlement and that its challenge should be dismissed. Innsworth argued earlier in the week that the distribution scheme is "illogical" and "flawed," contending that the tribunal failed to properly assess the funder's recovery.

The CAT had divided the settlement into three pots. Pot 1, totalling £100 million, is ring-fenced for class members. Pot 2, approximately £45 million, covers Innsworth's litigation costs. Pot 3, approximately £55 million, allocates roughly £23 million to Innsworth as the profit element of its return, bringing its total recovery to around £68 million. Innsworth contends that this amounts to only a 0.5x return on more than £45 million invested, and disputes the methodology used to set the figure.

The case has drawn close attention from the UK funding sector. A judicial review of a CAT-sanctioned distribution could establish important parameters around how courts assess funder returns in collective proceedings, particularly at a moment when the tribunal has signaled heightened scrutiny of certification and take-up in entrepreneurial class actions.

Commercial

Germany’s Federal Court of Justice Imposes New Limits on Funders and Claim Aggregators in $590M Trucks Cartel Ruling

By John Freund |

The Bundesgerichtshof (BGH), Germany's Federal Court of Justice, has issued a closely watched judgment in the long-running Trucks Cartel litigation that upholds the use of collective claims vehicles in principle but sets significant guardrails around third-party litigation funding and claim aggregation.

As reported by Leaders League, the May 12, 2026 ruling addressed claims arising from the European Commission's 2016 cartel decision, brought on behalf of more than 3,000 entities across 21 jurisdictions and seeking approximately US$590 million. The BGH confirmed that cartel damages claims may be collectively aggregated and enforced by registered claims collection entities, reinforcing collective redress mechanisms in German private antitrust litigation.

The court imposed two material limits. First, third-party funders cannot exercise control that compromises the claims vehicle's obligation to act exclusively in the interests of the assignors, a conflict-of-interest standard that goes to funder governance rights. Second, claims aggregation cannot obstruct effective judicial review; excessive volume or complexity that renders proper assessment "impracticable" may violate the German Legal Services Act and result in dismissal for procedural abuse.

The BGH overturned the appellate decision and remanded the matter, directing the lower court to examine whether the funding structure created incompatible conflicts and, if the assignments survive, to divide claims within six months. The decision is expected to shape the architecture of funded collective antitrust actions across Europe, particularly in jurisdictions modelling Germany's claims-collection framework.

Commercial

Michigan House Passes Third-Party Litigation Funding Bill 60–45, Sending Measure to Democratic Senate

By John Freund |

The Michigan House of Representatives has approved House Bill 5281, a Republican-sponsored measure that would impose registration, disclosure, and contracting restrictions on third-party litigation funders operating in the state, advancing the bill to a Senate where Democrats hold a narrow majority.

As reported by The Center Square, the bill cleared the chamber on a 60–45 vote, with four Democrats joining Republicans in support: Tulio Liberati, Peter Herzberg, Angela Witwer, and Will Snyder. Sponsor Rep. Mike Harris framed the legislation in floor remarks by asking, "Who does it benefit to allow outside investors to influence decisions in Michigan courtrooms?"

The bill requires litigation funders to register with the Department of Insurance and Financial Services, pay a $10,000 application fee, and file annual reports on funding activity. It mandates a ten-day consumer cancellation window for funded contracts, prohibits kickbacks and referral fees, prohibits funder influence on case strategy, bans funding by foreign adversaries, and imposes caps on funder spending and recoveries from awards.

Backers cited industry analyses suggesting third-party litigation funding raises household costs through higher prices and lost tax revenue. The measure now heads to a Senate where Democrats hold an 20–18 majority and where the bill's path is uncertain. The House passage adds Michigan to the list of states considered most active on third-party funding regulation, alongside parallel efforts under way in Colorado, Florida, and Pennsylvania.