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Grant Farrar, Founder of Arran Capital, Discusses Litigation Funding for Public Sector Entities

On a recent episode of the Litigation Finance Podcast, Grant Farrar of Arran Capital discussed his firm’s value proposition as the only litigation funder focused solely on public sector financing. Grant explains why public sector funding merits its own categorization, what the sticking points are in convincing politicians and others of litigation funding’s value, and what his expectations are for future growth in this rapidly-evolving space.

Below are key takeaways from the interview, which can be listened to in its entirety here.

LFJ: What makes litigation financing for public sector entities so unique? Why does this type of funding merit its own differentiated category?

GF: In terms of public sector affirmative litigation, one of the undeniable and very interesting trends that’s going on across the country with every shape and size and jurisdiction, is the uptrend in affirmative litigation. So, it really started off with, as you recall, the tobacco litigation in the late 90s and early 2000’s, and now has evolved into some different issues areas, so it can be a public nuisance, relative to environmental or other quality of life issues that affect constituents around the country. It could be the opioid litigation which everybody is very familiar with, a related offshoot of that would be the Juul litigation which is being maintained right now. And a whole host of other issues that relate to consumer fraud or antitrust. One of the things about public sector entities is they are the intersection of every piece of public policy and business.

As litigation continues to increase, certainly in the time of COVID-related budget strain and stress on entities across the country, the core issue of ‘okay, how do we find funding’ and ‘how do we pay for this legal representation’ is certainly at the forefront. And this is where Arran Capital comes in, with our value proposition that we’re real excited to talk about today.

LFJ: In terms of public sector financing more broadly, what are some of the key drivers of growth that this sector of the industry is facing?

GF: It really boils down to a concept which is being discussed in public sector circles with respect to rethinking revenue models and finding ways to generate revenue in different and creative ways that will assist public entities across the spectrum. So one of the drivers on that is chief financial officers in public sector organizations and their chief legal officers that work hand-in-hand with those who set the policies. They’re coming to the realization that it’s more than just across the board budget cuts or trying to lean operations. They’re trying to find different and creative ways to manage that revenue strain while also dealing with the growing expectation and the demand on behalf of their constituents and their public sector leaders for affirmative litigation to address the issues.

LFJ: ESG—this is a hot buzz word at the moment across the investment landscape and across Wall Street. It stands for Environmental, Social, and Governance, also known as Impact Investing. The idea is that investors are starting to look beyond just profit at how companies they invest in are impacting those various metrics. A lot of institutional players are starting to mandate ESG allocations from their partners. How could this trend impact public sector financing?

GF: Great question. I’m glad you asked that. Just this week we’ve seen the largest asset manager in the world speaking to the tectonic shift in the investment space with respect to funds flowing into ESG-related investments and ESG-related approaches. And at Arran Capital, we view ourselves as part of that component and part of that wave, because if you think about what ESG stands for, one of their core case matters or case areas that we seek to invest in is with respect to the environment; those public sector / public nuisance actions. So investing with our fund that can then invest in cases that address environmental issues, that’s part of our core focus and mission.

Going to social and governance, it’s also about investing in cases that promote access to justice for citizens across the country, and ensuring that citizens and their public servants have a role as constituents and representatives of government having a responsive investment approach and a responsive and good outcome on the litigation side. So we’re really excited about how we can tie into ESG, it’s one of the main drivers in our value proposition and one of the things we seek to focus on and execute.

Click here to listen to the full episode.

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Pegasus Legal Capital Completes $74 Million Securitization to Fuel Growth

Pegasus Legal Capital, LLC ("Pegasus") (mylawfunds.com), a prominent pre-settlement legal funding company in the United States, announced today that it has successfully completed a $74 million litigation finance securitization. This achievement marks Pegasus' second securitization transaction in the asset class and another significant milestone in its capital market journey. The proceeds from this transaction will further propel Pegasus' growth across key markets in the United States.

Pegasus Managing Director, Alexander Khanas, expressed, "With the successful completion of this transaction, Pegasus will expand its business in the personal injury market while upholding its industry-leading service standards."

GreensLedge Capital Markets LLC played the role of Placement Agent for Pegasus. GreensLedge Senior Managing Director, Douglas Lipton, added, "We are delighted to continue expanding Pegasus' investor base through their second securitization issuance and assisting them in creatively developing their platform."

Headquartered in Deerfield Beach, Florida, Pegasus was founded in 2008 as a pre-settlement litigation finance company. Since its inception, the company's management team has successfully sourced, underwritten, and serviced over half a billion dollars through more than 30,000 advances. While Pegasus has traditionally focused on the New York market, it has established a strong presence in the Southeast and Texas markets as well.

Pegasus is a proud member of the American Legal Finance Association (ALFA), a national organization comprising companies that provide non-recourse funds to personal injury victims. ALFA's primary objective is to establish industry standards for transparency in legal funding transactions, ensuring upfront and clear disclosure to consumers.

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New Burford Capital Research Reveals How Businesses are Preparing for Likely Rise in Global Energy Transition Disputes

By Harry Moran |

Burford Capital, the leading global finance and asset management firm focused on law, today releases new research entitled “Energy transition disputes: GCs and senior lawyers on the business impacts of legal challenges to come,” which demonstrates how businesses are preparing for a likely rise in legal disputes related to the global energy transition. This transition―or the shift to renewable sources of energy―is likely to cause an increase in expensive commercial disputes.

Businesses are investing significant sums in this transition, and corporate commitments highlight the scale of economic engagement as they invest in the new technologies, infrastructure and other resources that will be needed. But multifaceted legal and commercial pressures present businesses with a myriad of potential challenges including contractual disagreements, regulatory compliance issues and the need for intellectual property enforcement or litigation. Burford’s research report aims to offer a unique perspective on how corporations foresee the expected rise in litigation and arbitration related to this energy transition, examining the areas of business impact related to this evolving landscape.

Burford commissioned this independent research by capturing insights from 300 GCs and heads of litigation across key industries impacted by the energy transition and spanning North America, Europe, Asia and Australia.

Key findings from the study include:

Disputes relating to the energy transition are rising

·       76% of GCs report they are already encountering disputes related to the energy transition and nearly half (47%) expect a further rise in the volume of such disputes in the next decade, driven by evolving laws, new technologies and infrastructure requirements.

Disputes relating to the energy transition are expected to be costly

·       Almost two in three GCs (63%) expect legal fees and expenses to exceed $4 million per energy transition case; a notable minority (29%) expect per case costs to exceed $10 million.

·       Over half (52%) view high costs as a significant factor in deciding not to pursue disputes.

·       Half (50%) of GCs agree that the energy transition will create the need for additional capital sources for the business.

Expected disputes span all types of business conflict

·       GCs are most likely to predict (77%) that the energy transition will result in more contractual disputes and commercial arbitration.

·       Joint ventures are expected to be particularly prone to disputes over profit allocation (76%) and intellectual property rights (65%).

·       Over half of GCs (57%) also expect their businesses to face arbitrations to resolve investor-state conflicts relating to the transition.

New tools are needed to manage the rising dispute costs

·       Legal finance is increasingly used to mitigate the financial burden of these disputes; three in four (75%) GCs have used or would consider using legal finance to offset the cost of disputes relating to this transition.

·       In particular, GCs value monetization―or advancing some of the expected entitlement of a pending claim, judgment or award― to generate liquidity from claims tied up in litigation and arbitration. With legal finance, companies can also offset the cost of pursuing affirmative litigation to generate liquidity, shifting legal departments from cost centers to value drivers.

Christopher Bogart, CEO of Burford Capital, said: “Businesses face significant challenges related to the global energy transition due to cross-border projects, differing legal frameworks and rapidly evolving policies. Additionally, long-term energy contracts may not keep pace with energy markets and technologies, resulting in conflicts among stakeholders. Burford’s latest research demonstrates the value of corporate finance for law, as legal finance helps companies manage the high costs of energy transition disputes and allows them to pursue meritorious claims without depleting resources.”

Burford’s research is based on a 2024 survey conducted by GLG and is supplemented by interviews with ten global energy transition experts conducted by Ari Kaplan Advisors.

The research report can be downloaded on Burford’s website.

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Hannah Sadler Joins GLS Capital Patent Investment Team

By Harry Moran |

Hannah Sadler has joined the firm as a vice president and member of the patent investment team.

“We are very happy to welcome Hannah to GLS Capital as a vice president and member of our team focusing on patent investments,” said Adam Gill, a GLS Capital managing director, co-founder, and leader of the firm’s patent-related investing. “Attracting top-tier talent is essential for continuing to help our clients achieve success, and Hannah’s background in patent litigation will be invaluable for navigating the complexities of patent investments and helping to drive our mission forward.”

Sadler focuses on diligence around qualified underwriting opportunities and monitoring and managing the firm’s patent litigation investments.

Before joining GLS Capital, Sadler was a patent litigator at Global IP Law Group in Chicago. She has over a decade of experience with all aspects of patent portfolio management and enforcement, including prosecution, litigation, sales, licensing, and portfolio valuation.

Sadler earned her J.D. (cum laude) from DePaul University College of Law and her Bachelor of Arts from the University of San Diego.

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