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Commercial Special Features

Creating and Resourcing an Enforcement Plan to Persuade a Funder to Invest in Your Enforcement

The following article was contributed by J-P Pitt, Investment Manager at Asertis. 

Stating the obvious, the principal reason a funder chooses to fund enforcement, as with every aspect of litigation funding, is to receive more at the end than is paid at the beginning. In practical terms, enforcement extends beyond being purely a legal process. Much of it involves practical project management, where litigation is one of two key workstreams. The other is influence or persuasion – communications or PR. These two elements are entirely complementary and complimentary.

In project management terms, the starting point is a critical path to cash, which needs to be mapped out. Enforcement can be complex, with many moving parts, and, whilst the goal – to realise recoveries – is always clear, the path is often far from clear. To persuade a funder to invest, three essential pieces of work are necessary to map out a critical path to cash: an asset analysis of the defendant(s); obtaining legal opinion(s) or advice in the relevant jurisdiction(s); and the creation of an enforcement plan. Based on a comprehensive asset analysis, having an enforcement plan in place at the outset is pivotal to maximizing chances of success. Allocating sufficient time and adequate resources to execute the plan is therefore of paramount importance. The execution of that plan should be informed, or intelligence-led.

In order to create and execute the appropriate strategy, the project team should be thought of as taskforce, since it will need to be multi-disciplined and cross functional. It must be cohesive, and the components must be able to operate in concert with each other. Therefore, teams that have worked together successfully on complex projects are always comforting and persuasive from an investment perspective.

Like all projects, there must be a director who drives progress by coordinating how and when the task force conducts its activities. To achieve the strategic goal of realising recoveries (by seizing, and where necessary selling, assets) the director’s key role is to ensure taskforce components operate in concert. Hence, the director must be a professional decision-maker, who ensures clear communication and unity of purpose by giving timely and clear direction.

The director could be: the claimant; the funder, if the claim has been acquired; a key lawyer who may be sitting in a core jurisdiction, or simply one who has experience of coordinating and delivering such projects; or an investigator who may have assembled the team in the first place.

So, what are the taskforce components? For the litigation workstream, lawyers will be required for each jurisdiction in which the legal/litigation workstream needs to be pursued. Insolvency Practitioners (IPs)/liquidators and/or Trustees in Bankruptcy, as insolvency is often the most critical tool in any enforcement. Forensic accountants may also be required, usually for two purposes: to assist with the tracing of funds; and as expert witnesses at trial to prove how those funds have been traced.

For the influence workstream, communications professionals are required to manage, if appropriate, the media narrative surrounding a case and any messaging. This may involve both front foot PR (offensive) in order to generate indirect pressure, and back foot PR (defensive) to protect reputational risk: often the most critical factor for any litigant and/or funder.

Finally, investigators form a crucial part of the team and should be instructed from the outset to ensure that any enforcement plan is well informed and its execution is intelligence-led. The information they provide should inform the taskforce director’s decisions and assist in directing how and when the task force conducts certain activities. The investigators’ role is multi-faceted: understanding what motivates a defendant; conducting an asset analysis – identifying what and where assets are; monitoring throughout the life of the case; and assisting with gathering evidence.

There are several key vulnerabilities which can undermine success, and potentially, one weak link can undermine the overall objective. Lack of coordination and communication anywhere within the taskforce can potentially be very damaging. The same applies if there is a poor sequencing of activities, such as seeking to recover an asset before a full intelligence picture is gathered. Equally, a bad practitioner, investigator or comms specialist, who oversteps their brief, might derail the case through negligence or incompetence. Failure to appreciate a defendant’s critical vulnerabilities and motivations (e.g. is there a trophy asset with totemic value?) might result in strategic mistakes. Clearly, if there are insufficient funds to marshal the necessary resources, then the team effort may well fall short of the required standard for success.

Money is an issue in every type of commercial litigation: it is often not enough to win the case in court and receive judgment in your favour. It must be understood that the financial resources required to achieve success in enforcement of that judgment are considerable – at least as much will be expended in achieving success as was expended in obtaining the judgment. Often it can be significantly more. Accordingly, there should be plenty of contingency factored in. Although the goal may be clear, the path that has to be taken to reach it, is routinely unclear.

Ultimately, anyone seeking funding for an enforcement opportunity should front-load their assessment of the risks and approach the funder with a clearly thought-out plan. This will enable any funder to understand firstly what the opportunity is and whether it might be a viable investment, and secondly, how the risks may be treated, tolerated or taken; most usually, treated.

 

J-P Pitt is an Investment Manager at Asertis, specialising in commercial disputes funding. Prior to joining Asertis, J-P was a Director of Litigation Funding at Harbour Litigation Funding. He is also a qualified solicitor.

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Case Developments Commercial

Sony and Apple Challenge Enforceability of Litigation Funding Models

By John Freund |

A pivotal UK court case could reshape the future of litigation finance agreements, as Sony and Apple reignite legal challenges to widely used third-party funding models in large-scale commercial disputes.

An article in Law360 reports that the two tech giants are questioning the validity of litigation funding arrangements tied to multibillion-pound cartel claims brought against them. Their core argument: that certain litigation funding agreements may run afoul of UK laws governing damages-based agreements (DBAs), which restrict the share of damages a representative may take as remuneration. A previous Court of Appeal decision in PACCAR Inc. v. Competition Appeal Tribunal held that some funding models might qualify as DBAs, rendering them unenforceable if they fail to comply with statutory rules.

This resurrected dispute centers on claims brought by class representatives against Apple and Sony over alleged anti-competitive behavior. The companies argue that if the funding arrangements breach DBA regulations, the entire claims may be invalidated. For the litigation funding industry, the outcome could severely curtail access to justice mechanisms in the UK—especially for collective actions in competition law, where third-party financing is often essential.

The UK’s Competition Appeal Tribunal previously stayed the proceedings pending clarity on the legal standing of such funding arrangements. With the dispute now heading back to court, all eyes will be on whether the judiciary draws a clear line around the enforceability of funder agreements under current law.

The decision could force funders to rework deal structures or risk losing enforceability altogether. As UK courts revisit the DBA implications for litigation finance, the sector faces heightened uncertainty over regulatory compliance, enforceability, and long-term viability in complex group litigation. Will this lead to a redefinition of permissible funding models—or to a call for legislative reform to protect access to collective redress?

Case Developments Commercial

Funder’s Interference in Texas Fee Dispute Rejected by Appeals Court

By Harry Moran |

A Texas appeals court has ruled that a litigation funder cannot block attorneys from pursuing a fee dispute following a remand order, reinforcing the limited standing of funders in fee-shifting battles. In a 2-1 decision, the First Court of Appeals found that the funder’s interest in the outcome, while financial, did not confer the legal authority necessary to participate in the dispute or enforce a side agreement aimed at halting the proceedings.

An article in Law360 details the underlying case, which stems from a contentious attorney fee battle following a remand to state court. The litigation funder, asserting contractual rights tied to a funding agreement, attempted to intervene and stop the fee litigation between plaintiffs' and defense counsel. But the appellate court sided with the trial court’s decision to proceed, emphasizing that only parties directly involved in the underlying legal work—and not third-party financiers—are entitled to challenge or control post-remand fee determinations. The majority opinion concluded that the funder’s contract could not supersede procedural law governing who may participate in such disputes.

In dissent, one justice argued that the funder’s financial interest merited consideration, suggesting that a more expansive view of standing could be warranted. But the majority held firm, stating that expanding standing would invite unwanted complexity and undermine judicial efficiency.

This decision sends a strong signal to funders operating in Texas: fee rights must be contractually precise and procedurally valid. As more funders build fee recovery provisions into their agreements, questions linger about how far those rights can extend—especially in jurisdictions hesitant to allow funders a seat at the litigation table.

Commercial Regulatory Issues

Oklahoma Moves to Restrict Foreign Litigation Funding, Cap Damages

By John Freund |

In a significant policy shift, Oklahoma has enacted legislation targeting foreign influence in its judicial system through third-party litigation funding. Signed into law by Governor Kevin Stitt, the two-pronged legislation not only prohibits foreign entities from funding lawsuits in the state but also imposes a $500,000 cap on non-economic damages in civil cases—excluding exceptions such as wrongful death. The new laws take effect November 1, 2025.

An article in The Journal Record notes that proponents of the legislation, including the Oklahoma Civil Justice Council and key Republican lawmakers, argue these measures are necessary to preserve the integrity of the state's courts and protect domestic businesses from what they view as undue interference. The foreign funding restriction applies to entities from countries identified as foreign adversaries by federal standards, including China and Russia.

Critics, however, contend that the laws may undermine access to justice, especially in complex or high-cost litigation where third-party funding can serve as a vital resource. The cap on non-economic damages, in particular, has drawn concern from trial lawyers who argue it may disproportionately impact vulnerable plaintiffs without sufficient financial means.

Oklahoma’s move aligns with a broader national trend of state-level scrutiny over third-party litigation funding. Lawmakers in several states have introduced or passed legislation to increase transparency, impose registration requirements, or limit funding sources.

For the legal funding industry, the Oklahoma law raises pressing questions about how funders will adapt to an increasingly fragmented regulatory landscape. It also underscores the growing political sensitivity around foreign capital in civil litigation—a trend that could prompt further regulatory action across other jurisdictions.