Disclosure in the Spotlight for Patent Cases with Third-Party Funding

As LFJ reported in December 2024, an Australian class action funded by Litigation Capital Management (LCM) had received an unfavourable ruling in the Federal Court of Australia, with the judge ruling against the claim brought over claims that two government-owned entities engaged in market manipulation to create an artificially scarce supply and raise prices.

An announcement from LCM revealed that an appeal has been filed in the class action brought on behalf of Queensland consumers against the Stanwell Corporation LTD and CS Energy LTD. The funder’s brief announcement suggested that further details around the appeal would be released in due course, stating: “We look forward to engaging further with investors after our interim results have been published on 18 March 2025.“

In LCM’s release following the December ruling, CEO Patrick Moloney had said that their “expectation has always been that an appeal in this case was likely, regardless of the initial outcome” and that they “remain confident in the strength of the underlying claim.” The previous announcement also included a top-line overview of LCM’s involvement in the case, disclosing that the funder had provided A$25m in funding from its own balance sheet capital to support the class action.

The first instance judgment from Justice Dennington in the case of Stillwater Pastoral Company Pty Ltd v Stanwell Corporation Ltd can be read here.

The sanctioning of Russian business owners since 2022 has led to a plethora of litigation, as one ongoing case in Florida sees two Russian nationals in a dispute over the funding of litigation between them.

Reporting by Bloomberg Law covers ongoing proceedings in a Florida court, where sanctioned Russian billionaire Andrey Guriev is seeking discovery on the funding of claims brought against him by Alexander Gorbachev. The discovery application relates to a series of cases brought against Guriev by Gorbachev over his claimed partial ownership of Guriev’s company, with Gorbachev’s legal costs, insurance and additional expenses having been paid by Sphinx Funding LLC, a subsidiary of 777 Partners. 

Gorbachev failed in his claim brought against Guriev in the UK, but has since claimed that he does not have the £12 million that he has been ordered to pay to Guriev in court costs. Mr Guriev’s counsel from Boies Schiller Flexner, explained the reasoning behind the discovery application in a memorandum of law, stating:

“Mr. Guriev hopes to discover information relevant to the identities and ultimate sources of the funds provided by the third-party funders who financed Mr. Gorbachev’s failed, frivolous, and potentially fraudulent claims, as well as the true motives and objectives in bringing those claims.”

In response to a prior application by Guriev to have the two funders added as parties to the case, Joshua Wander, managing partner and co-founder of 777 Partners, stated that even though the company had covered some of Gorbachev’s legal costs, it had no stake in the result of the litigation. Furthermore, Wander had claimed that his companies had no paid any of Gorbachev’s legal costs after May 2023, following a “breakdown in the relationship between Alexander and the funders”.