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Highlights from Brown Rudnick’s Litigation Funding Conference 2024

Highlights from Brown Rudnick’s Litigation Funding Conference 2024

Last week, Brown Rudnick hosted its third annual European Litigation Funding Conference, proving once again to be one of the premier gatherings of industry thought leaders and executives. The one-day event featured an agenda full of insightful discussions, as senior representatives from funders, law firms, insurers, and other industry firms, all provided their perspectives on the most pressing issues facing the European funding market. The conference served as a reminder of the growing interest in litigation finance, as the venue was packed with attendees and without an empty seat in sight at the start of proceedings. Before the panel discussions began, the event kicked off with a keynote speech from Camille Vasquez, partner and co-chair of the brand & reputation management group at Brown Rudnick. Vasquez, who gained international recognition for her involvement in the Depp v. Heard trial, offered an alternative perspective on litigation funding, exploring its potential use in defamation cases brought by high-profile individuals or companies. As Vasquez explained, whilst it is commonly assumed that celebrities and other public figures have access to large amounts of liquid capital, this is often not the case. In such situations, Vasquez suggested that litigation funders may be able to play a crucial role in supporting high-profile plaintiffs who are eager to pursue defamation litigation but lack the funds to seek justice. A Post-PACCAR World and the Future of Regulation Unsurprisingly, the hottest topic at the litigation funding conference was the ongoing impact of the Supreme Court’s PACCAR ruling and the recent announcement by the UK government that it would introduce legislation to reverse the effects of that decision on litigation funding.  Looking at the long-term impact of the Supreme Court’s decision, Susan Dunn from Harbour provided the quote of the morning, when she emphatically stated that the PACCAR ruling would be remembered as “a footnote in history, not a chapter.” Similarly, Nicholas Bacon KC of 4 New Square Chambers, described it as “a blip in the landscape” of the UK funding market, and pointed out that the situation had in some ways had positive effects as it had brought wider public attention to litigation funding. However, speakers across the day recognised that PACCAR had created unnecessary uncertainty for investors considering engaging with the UK market, and had created fresh talking points for the most vocal opponents of third-party funding. NorthWall Capital’s Alexander Garnier reported that the Supreme Court’s judgement had “made people more nervous about investing in the UK and London”, because it had increased the risk of investments or had increased the perception of those risk levels. According to Professor Rachael Mulheron KC, another negative side-effect of the decision has been the “unfortunate conflation between regulation and PACCAR,” which has made productive discussions around the future of industry oversight more challenging. As the event’s participants discussed the effects of PACCAR, these exchanges naturally turned to the government’s announcement of new legislation and a potential review into the litigation funding market. With the review suggesting the possibility of enhanced regulation of third-party funding, Woodsford’s Charlie Morris admitted that this aspect of the government’s announcement was unfortunate, as it had “given an opportunity for the anti-funding lobby” and compared it the “politically motivated campaign” that took place in Australia to crack down on litigation funders. As to what future regulations could (or should) look like, speakers at the conference were divided on certain issues such as a potential cap on the level of returns a funder could take from any award or damages. Morris once again emphasised the need to avoid “broad brush statutory prohibitions”, whilst Dunn firmly argued that a cap on funders’ returns “should not be part of any regulation.” In contrast, Garnier expressed an openness to some form of cap, explaining that he would “welcome clarity” on industry regulations, “even if it involves a regime that includes a cap on damages.” Offering the most succinct perspective on the funding industry’s view of new legislation, Matthew Lo from Exton Advisors argued that there is “nothing to be afraid of about regulation in general, but the devil is in the detail.” On a similar note, Professor Mulheron suggested that the most important thing for any government plans to introduce new regulations is that “funders have to be around the table” for these discussions. The Impact of the Post Office Scandal Closely tied to the UK government’s ongoing attempts to soften the blow of PACCAR, is the role played by the Post Office scandal and the impact it had on bringing the vital role of litigation funding in securing access to justice to the public’s attention. One of the highlights of the day’s discussions was the insight provided by Neil Purslow of Therium, who offered a fascinating account of the funder’s involvement in the sub-postmasters litigation and expressed some frank reflections on the ways it had highlighted the nefarious tactics of defendants. Purslow described the case as a perfect example of a defendant “spending money on lawyers rather than doing the right thing”, and noted that the Post Office had spent £100 million to fight the case rather than actually providing compensation to the victims upfront. Purslow emphasised this fact in combination with a rebuttal of the oft-repeated claim that Therium had taken 80% of the damages awarded to the sub-postmasters, explaining that the actual return for the funder was around 41%. In light of these facts, Purslow described the arguments in favour of a broader cap on funders’ fees as “nonsense”, and instead highlighted the case as yet another instance of defendants taking “a scorched earth approach to litigation.” Purslow concluded his contribution to the day’s discussion by recognising that whilst the PACCAR decision had been “a self-inflicted wound”, the industry and government’s reaction has clearly demonstrated that the UK “is a jurisdiction that is supportive to litigation finance.” Furthermore, Purslow praised his fellow litigation funders for “working together collaboratively and sharing ideas” to protect the UK funding industry, and highlighted the value of institutions like ILFA in providing a powerful voice that could “address the issue and get the government to act.” Economic Pressures, Corporate Cases and Law Firm Funding During the day’s panel discussions, speakers offered their views on the trends, opportunities and challenges that industry participants have seen over the last twelve months. As many industry leaders have spoken about in the last year, whilst litigation funding is broadly seen as an uncorrelated asset class, that does not mean that it has been, as Matthew Lo put it, “immune to the wider economic environment”. The majority of panellists agreed that the rise in interest rates had continued to apply pressure on funders’ pricing, which then increased cost of financing creating challenges for those funders looking to raise capital. However, due to these challenging economic conditions, speakers noted that there has been an increase in demand for funding from law firms and corporations, both of whom are facing similar budget pressures whilst still looking to manage their litigation strategies. As Christiane Deniger of Burford Capital explained, many listed companies are actively seeking funding for a portfolio of cases and are “ready and willing to not spend their own money if they can take ours.” Rocco Pirozzolo from Harbour Underwriting added that these corporate cases were often attractive, because key decision makers at these companies share the funder’s perspective that “they have to be commercial and they have to be reasonable.” When it came to working with corporate GCs and CFOs, there was a broad consensus among the industry leaders present that there was still plenty of work to do around educating these inhouse decision-makers on the nuances of litigation funding. Ayse Yazir from Bench Walk noted that there is often still “concern over the control of the case”, with critics of the litigation finance industry contributing to fears that funders would seize control of the litigation process. Nathaniel Cortez of Moelis acknowledged that whilst these corporate leaders “don’t need to be experts on litigation finance”, it was clear that many GCs and financial directors did not “understand the breadth and depth of the industry”. The discussions focused on law firm funding proved to be some of the most enlightening exchanges of the conference, with funders and lawyers alike sharing their perspectives on some of the unique challenges and opportunities that this avenue of investing entailed. Hugo Lestiboudois from SYZ Capital made a clear delineation between straightforward litigation financing and the process of lending directly to law firms. He explained that law firm funding “is not as commoditised as litigation finance is today”, with investors needing to approach it from a business perspective and often having to “compete on terms, rather than on price.” Reinforcing this viewpoint, Chris Benson from Leigh Day argued that this type of funding crucially involves “getting lawyers to think like economists”, and acknowledged that this can be challenging as “a lot of lawyers have no interest in finance.” Looking at the practical steps involved in law firm funding, both in terms of the due diligence undertaken pre-funding and the ongoing monitoring and reporting that must take place post-funding, the speakers once again provided useful insights. Joshua Katz from Gramercy said that from his firm’s perspective, part of the journey was understanding the law firm’s wider strategic objectives, saying that Gramercy recognised that for a firm there are “some cases you should pursue even if they’re not economical, for the greater good.” Similarly when it came to the ongoing relationship between the funder and law firms, it was not only crucial for practical issues like reporting systems to be in alignment, Lestiboudois highlighted the need for a “cultural fit” between firms. A High Benchmark for Industry Conferences By the end of the day, the event’s attendees had been treated to a plethora of engaging discussions across seven separate panels, bolstered by plenty of opportunities for networking and connections between sessions. The full scope and detail of every speaker’s insights could not be encompassed in this single overview of the day’s proceedings, but by the time the agenda concluded with informal refreshments, the conference had succeeded in providing an impressively diverse array of perspectives on litigation funding in Europe. Brown Rudnick’s third European Litigation Funding Conference proved to be an enlightening experience for those in attendance, with the proceedings expertly guided by the conference chair Elena Rey and fellow moderators from Brown Rudnick, who skilfully guided the event’s packed schedule. LFJ’s team were delighted to meet with fellow attendees who expressed their enjoyment of the event, and we are already looking forward to covering next year’s iteration of Brown Rudnick’s conference.
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Harris Pogust Joins Bryant Park Capital as Senior Advisor

By John Freund |

Bryant Park Capital (“BPC”) a leading middle market investment bank and market leader in the litigation finance sector, is pleased to announce that Harris Pogust has joined the firm as a Senior Advisor.  Harris (Mr. Pogust) is one of the best known and prominent attorneys in the mass tort and class action fields, he was the founding partner and Chairman of Pogust Goodhead worldwide until early 2024 and is currently working with Trial Lawyers for a Better Tomorrow, a charity Harris founded, to help children reach their educational potential all over the world.  Harris’ life work has been to deliver justice for those who have been damaged or injured through the negligence or bad faith of others.

“We are thrilled to have Harris as part of our team.  His knowledge, experience and relationships in the litigation finance sector are of great value to Bryant Park and our clients.  As the litigation finance world becomes more competitive, complex and challenging, having an expert like Harris on our team is invaluable,” said Joel Magerman, Managing Partner of Bryant Park.

Harris’ efforts, in conjunction with Bryant Park will focus on assisting law firms and funders in developing strategies to more efficiently fund their operations and cases and assist them in establishing the right relationships for future growth.  Harris commented, “I have been fortunate to have been a practicing attorney and partner in law firms for over 35 years focused on building and growing a worldwide book of business in the class action/mass tort field.  That required significant capital and throughout my career I have raised over $1 billion for my firms.  I have learned what works and what doesn’t.  I have seen both the risks and rewards in this industry.  I look forward to being able to work with law firms and funders to assist them in putting the right strategies in place with Bryant Park and bringing capital and liquidity to help them grow and flourish.”

About Bryant Park Capital

Bryant Park Capital is an investment bank providing capital raising, M&A and corporate finance advisory services to emerging growth and middle market public and private companies. BPC has deep expertise and a diversified, well-founded breadth of experience in a number of sectors, including specialty finance & financial services. BPC has raised various forms of credit, growth equity, and assisted in mergers and acquisitions for its clients. Our professionals have completed more than 400 assignments representing an aggregate transaction value of over $30 billion.

For more information about Bryant Park Capital, please visit www.bryantparkcapital.com.

20 Legal Firms and Groups Calling on UK Government for Urgent Legislation to Reverse PACCAR

Despite a government-commissioned independent review recommending priority standalone legislation to reverse PACCAR, the Government has failed to act, the letter to the Lord Chancellor says.

“As a highly respected member of the legal community, the Prime Minister rightly often speaks of ‘following the evidence’.

“The independent experts have provided the evidence that this issue needs fixing, yet this Government refuses to act, delaying justice for some and denying justice for future claimants.

“We call on the Government to act swiftly and legislate for the sake of claimants and the reputation of the UK’s justice system.”

The letter follows earlier calls on the Government from claimants to reverse PACCAR urgently, including from Sir Alan Bates , truck hauliers and the lead claimant in a mass action case against six water suppliers for alleged customer overcharging.

This comes amid a drop off in collective proceeding cases in the Competition Appeal Tribunal this year according to Solomonic, as reported in the Financial Times this morning (link). 

Neil Purslow, Chairman of the Executive Committee of ILFA, said:

“We’ve been warning successive governments for more than two years about the potential impact this uncertainty will have on consumers and small businesses’ ability to access justice.

“These figures show that stark reality. Meritorious claims are going unfunded, alleged wrongdoers are unchallenged and competition - one of the great drivers of growth - is not being enforced.

“The Government must act before this small trickle of cases dries up altogether.”

Martyn Day, co-founder of Leigh Day and co-president of the Collective Redress Lawyers Association (CORLA) which signed the letter, said: 

“This issue has created a great deal of uncertainty that is blocking access to justice for ordinary people taking on powerful corporations accused of wrongdoing. 

“The system simply cannot work without litigation funding, and this is a timely reminder to government to fix this issue, and urgently.”

In July 2023, the Supreme Court ruled in the PACCAR judgment that litigation finance agreements were unenforceable unless they met the requirements of Damages-Based Agreements, rendering many ongoing cases invalid and causing delays in the pursuit of justice for millions of claimants. 

The Civil Justice Council (CJC) concluded its comprehensive review of the funding sector four months ago, after the Government had promised to review what legislation might be needed to address PACCAR once the review was complete. The CJC’s review urged priority standalone legislation to reverse the damaging effects of PACCAR. Yet, despite earlier promises, the Government has said the review would merely “help to inform the approach to potential reforms” in “due course”. 

The letter highlights how the Government’s continued inaction contradicts the Prime Minister's own commitment to "following the evidence”.

The signatories, representing firms including Mishcon de Reya, Stewarts, Freeths, and Scott+Scott UK, highlight the “pivotal role” of group actions. They call on the Government to “act swiftly” to adopt the CJC’s recommendation to reverse PACCAR to protect the reputation of the UK’s justice system. The firms also include those who have provided legal representation for Sir Alan Bates, hauliers ripped off by truck manufacturers (link), and leaseholders fighting secret insurance charges (link).

Since the ruling, crucial investment into the UK economy is rapidly being lost. Litigation funders like Burford Capital are taking their funds elsewhere, with CEO Chris Bogart, stating his firm has begun ‘migrating some dispute resolution away from London’, following PACCAR. 

Litigation funding enables claimants with limited means to access justice, enabling landmark cases including those brought by the subpostmasters, retail workers, and small business owners, to hold multinational corporations accused of serious wrongdoing to account, while promoting fair, competitive markets and securing investment into the UK.

--

Below is the letter to the Lord Chancellor, in its entirety:

Rt Hon David Lammy MP
Lord Chancellor and Secretary of State for Justice
Ministry of Justice
102 Petty France
London
SW1H 9AJ

Dear Lord Chancellor,

Congratulations on your new role as Lord Chancellor and Justice Secretary. While we recognise the many challenges you'll face stepping into this role, we wanted to highlight a critical issue that is undermining access to justice and stifling investment in the UK's legal system. But it's an issue with a quick and simple fix.

Group actions in the UK play a pivotal role in enabling individuals to come together to bring claims against those accused of wrongdoing - often multinational corporations with significant resources. It has helped claimants like the subpostmasters, shopworkers, retail investors, and small business owners access justice.

The regime is underpinned by claimants’ abilities to access finance - often through litigation funding where funders provide financial backing for an agreed return of any settlement. However, as you know, the future of this mechanism and the regime is under threat thanks to the disruptive effects of the 2023 PACCAR judgment, and subsequent challenges to the enforceability of funding arrangements.

Claimants with limited means are struggling to access funding to bring their cases, and investment from funders is draining away from the UK legal system.

The Government promised to review what legislation might be needed to address PACCAR once the Civil Justice Council’s review had concluded. 

The CJC reported back 4 months ago with a thorough and nuanced perspective on the funding sector. As members of the legal community, we are sympathetic to sensible reforms and are reassured that the Government is considering these carefully. 

But one unequivocal and pressing recommendation from the CJC was for urgent standalone legislation to reverse the effects of PACCAR to end the uncertainty damaging access to justice. Disappointingly, the Government has so far failed to hear that call, saying only that the review would “help to inform the approach to potential reforms” in “due course”, despite its previous promises.

As a highly respected member of the legal community, the Prime Minister rightly often speaks of “following the evidence”. The independent experts have provided the evidence that this issue needs fixing, yet this Government refuses to act, delaying justice for some and denying justice for future claimants. 

We call on the Government to act swiftly and legislate for the sake of claimants and the reputation of the UK’s justice system.

Signed

The Collective Redress Lawyers Association (CORLA).
Stewarts
Group Actions & Competition, Stephenson Harwood
Scott+Scott UK LLP
Backhouse Jones
Freeths 
Humphries Kerstetter LLP
Mishcon de Reya LLP
Velitor Law
Milberg London LLP
Fladgate LLP
Geradin Partners
Harcus Parker
Tim Constable, Bates Wells
Phi Finney McDonald
Keidan Harrison LLP
Asserson
Leigh Day
Cooke, Young & Keidan LLP
KP Law

Shai Silverman Departs CAC Specialty, Joins Litica as U.S. Head of Underwriting

By John Freund |

After four years helping to build CAC Specialty’s contingent risk insurance practice from the ground up, Shai Silverman is departing the firm to join litigation risk insurer Litica as its Head of Underwriting – U.S.

In a LinkedIn post, Silverman reflected on his time at CAC, where he joined in the early days of the firm’s efforts to turn contingent risk insurance into a mainstream product. Alongside colleagues Andrew Mutter, Michael B. Wakefield, and David Barnes, Silverman helped develop insurance solutions for a wide array of legal risks, crafted bespoke products for hundreds of clients, and played a key role in launching the first-ever contingent risk insurance conference.

Silverman now moves to Litica, a UK-headquartered specialist insurer focused on litigation and contingent risks, to lead its U.S. underwriting function. His move signals not just a personal transition but also the growing transatlantic ambitions of insurers operating in this once-niche corner of legal risk.

Silverman’s departure marks a broader inflection point for contingent risk insurance—a sector now poised for significant expansion. As underwriting talent like Silverman shifts into leadership roles at specialist firms, questions emerge around how traditional insurers will respond, and whether contingent risk insurance will continue its trajectory toward becoming a standard risk-transfer tool for litigation and arbitration.