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ESG and Litigation Funding

June 7, 2023

ESG and Litigation Funding

Are ESG initiatives and regulations creating more tension between companies and their suppliers? Are we seeing an uptick in disputes that are arising out of ESG initiative and regulations? What impacts and pressures are ESG matters having on companies, funders, attorneys and governments? These topics and more were covered on IMN’s panel discussion “ESG Initiatives: Challenges and Opportunities.” Panelists included Viren Mascarenhas, Partner at Milbank, Nikos Asimakopoulos, Director of Disputes at Alaco, and Rebecca Berrebi, Founder and CEO of Avenue 33, LLC. The panel was moderated by Collin Cox, Partner at Gibson Dunn. Rebecca Berrebi began the discussion by noting that ESG is a huge space. Even with firms concerned about ‘green-washing,’ and not classifying every type of investment as ESG, the space is still enormous. One area she sees a strong ESG connection with is whistleblower claims—she has seen bundles of SEC whistleblower claims get underwritten by funders, despite the fact that the case type is a bit of a black box with limited visibility into the details of the case. Yet funders are pursuing these types of claims, which have a strong ESG component. Collin Cox noted how particular these types of cases are, which must make the diligence extremely difficult. Berrebi concurred, explaining she has seen cases where the whistleblower is actively involved, which of course is a huge help, but otherwise there is a large diligence hurdle to overcome. The flipside is that these are not expensive cases, and when bundled, can become a worthwhile investment. Viren Mascarenhas highlighted the arbitration space. On the commercial front, he noted that he is getting calls from corporate partners, and there is concern about how to address the human rights principles of the U.N., which are becoming more popular with the public-private partnerships on offer. On the investor-state front, issues are arising in investor treaties which have carve-outs, or provisions where parties must comply with national laws and with U.N. principles. These are examples where an ESG focus is having an impact. Nikos Asimakopoulos spoke to obscure issues such as claims against foreign supply chain operators. He has a claim in an African state, where the claimant must demonstrate that the government behaved improperly. This is very difficult, of course. You must go to the specific locale and investigate the exact regulations in place at a local level, because this is what is driving the decision making. Zooming out, the theme of this panel seemed to be how ESG clearly affords opportunities to litigation funders, but is not a panacea. The emerging sector also presents diligence challenges and confusion around how multinational ESG initiatives might impact state and local laws. So right now we appear to be in a gray area where there is much uncertainty around the intersection of ESG and litigation funding.
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Commercial

Courmacs Legal Leverages £200M in Legal Funding to Fuel Claims Expansion

By John Freund |

A prominent North West-based claimant law firm is setting aside more than £200 million to fund a major expansion in personal injury and assault claims. The substantial reserve is intended to support the firm’s continued growth in high-volume litigation, as it seeks to scale its operations and increase its market share in an increasingly competitive sector.

As reported in The Law Gazette, the move comes amid rising volumes of claims, driven by shifts in legislation, heightened public awareness, and a more assertive approach to legal redress. With this capital reserve, the firm aims to bolster its ability to process a significantly larger caseload while managing rising operational costs and legal pressures.

Market watchers suggest the firm is positioning itself not only to withstand fluctuations in claim volumes but also to potentially emerge as a consolidator in the space, absorbing smaller firms or caseloads as part of a broader growth strategy.

From a legal funding standpoint, this development signals a noteworthy trend. When law firms build sizable internal war chests, they reduce their reliance on third-party litigation finance. This may impact demand for external funders, particularly in sectors where high-volume claimant firms dominate. It also brings to the forefront important questions about capital risk, sustainability, and the evolving economics of volume litigation. Should the number of claims outpace expectations, even a £200 million reserve could be put under pressure.

Commercial

Katch Liquidates Consumer Claims Fund Amid Mounting Delays and Pressure

By John Freund |

Katch Fund Solutions, one of the most prominent players in consumer litigation funding, has placed its consumer claims fund into liquidation.

According to Legal Futures, the move comes in response to mounting liquidity pressures caused by prolonged delays in resolving motor-finance claims and increased uncertainty surrounding major group litigation efforts. The Luxembourg-based fund confirmed it is winding down the portfolio and returning capital to investors on a pro-rata basis.

Katch had been a key backer of large-scale consumer legal claims in the UK, supporting firms such as SSB Law and McDermott Smith Law. Both firms ultimately collapsed, with SSB Law owing £63 million including £16 million in interest, and McDermott Smith Law owing £7 million. Katch’s portfolio also included a substantial stake in the ongoing “Plevin” litigation, a group of cases alleging unfair undisclosed commissions tied to the sale of payment protection insurance. That litigation, initially estimated at £18 billion in value, suffered a blow earlier this year when the High Court declined to grant a group litigation order, further delaying resolution timelines.

The firm’s consumer claims fund held over £400 million in assets as of mid-2025, but was hit hard by increasing investor redemption requests. Katch’s team cited concerns that payouts from major motor-finance cases could be delayed until 2026 or later due to regulatory and judicial developments. With limited short-term liquidity options, the fund concluded that an orderly wind-down was the only viable path forward.

Case Developments Commercial

Omni Bridgeway Backs New Zealand Class Action Against Transpower, Omexom

By John Freund |

Omni Bridgeway is backing a newly launched class action in New Zealand targeting Transpower New Zealand Limited and its contractor Omexom, following a major regional blackout that occurred in June 2024.

According to Omni's website, the outage, which affected approximately 180,000 residents and 20,000 businesses across Northland, was triggered by the collapse of a transmission tower near Glorit during maintenance activity conducted by Omexom.

Filed in the High Court in Wellington by law firms LeeSalmonLong and Piper Alderman, the case alleges negligence on the part of both defendants. The plaintiffs claim that Transpower failed to adequately oversee the maintenance, and that Omexom mishandled the work that led to the tower’s collapse.

The class action is proceeding on an opt-out basis, meaning all impacted Northland businesses are automatically included unless they choose otherwise. Under Omni Bridgeway’s funding model, there are no upfront costs to class members, and fees are contingent on a successful outcome.

The economic impact of the outage has been pegged between NZ$60 million and NZ$80 million, according to various estimates, with businesses reporting power losses lasting up to three days and in some cases longer. In the aftermath of the blackout, Transpower and Omexom jointly contributed NZ$1 million to a resilience fund for affected communities, a figure the plaintiffs argue is woefully inadequate compared to the losses incurred.