A significant legal win for litigation funder Archetype Capital Partners emerged this month in the firm’s ongoing dispute with one of its co‑founders. A Nevada federal judge granted Archetype a preliminary injunction that prevents the ex‑partner from using the company’s proprietary systems for underwriting and managing mass tort litigation while the underlying trade secret lawsuit continues.

According to an article in Bloomberg, Archetype filed suit in September against its former co‑founder, Andrew Schneider, and Bullock Legal Group LLC, alleging misappropriation of confidential methodologies and business systems developed to assess and fund mass tort claims. The complaint asserted that Schneider supplied Bullock Legal with sensitive documents and leveraged Archetype’s systems to rapidly grow the firm’s case inventory from a few thousand matters to well over 148,000, a jump that Archetype says directly undercut its competitive position.

In issuing the injunction, Judge Gloria M. Navarro of the U.S. District Court for the District of Nevada found that Archetype was likely to succeed on its trade secret and breach of contract claims. While the court determined it lacked personal jurisdiction over Bullock Legal and dismissed the company from the suit, it nonetheless barred both Schneider and Bullock from distributing proceeds from a $5.6 billion mass tort settlement tied to video game addiction litigation that had been structured using Archetype’s proprietary systems.

The order further requires the return of all materials containing confidential data and prohibits Schneider from soliciting or interfering with Archetype’s clients.

In a development drawing fresh scrutiny to fee arrangements in class action proceedings, law firms involved in the high-profile shareholder lawsuit against BHP have collected nearly three times the legal fees they initially represented to the court. The firms took in approximately $48 million from a $110 million settlement approved in the Federal Court of Australia, despite earlier representations suggesting significantly lower costs.

An article in the Australian Financial Review details how the legal teams initially indicated their fees would constitute a relatively modest share of the final settlement. However, court filings reveal a different outcome, with the firms ultimately securing a much larger cut after a revised funding structure was approved during the settlement process.

The underlying class action was brought on behalf of shareholders following the catastrophic 2015 collapse of the Fundão dam in Brazil, and partially funded by G&E KTMC Funding LLC, which is backed by Grant & Eisenhofer and Kessler Topaz Meltzer & Check, two prominent US-based shareholder litigation firms.

The case centered on allegations that BHP failed to adequately disclose risks associated with the dam's operations, leading to sharp share price declines after the disaster. While BHP did not admit liability, the $110 million agreement was one of several global legal settlements related to the event.

The revised fee arrangement was approved as part of a “common fund” order, which allows for legal and funding costs to be deducted from the total settlement on behalf of all group members. The final order was issued without a detailed public explanation for the increased fees, prompting concerns from legal observers and stakeholders about transparency and accountability in class action settlements.