Highlights from IMN’s 2nd Annual International Litigation Finance Forum
On October 19th, IMN hosted its second Annual International Litigation Finance Forum in London, bringing together thought leaders from across the litigation finance industry and showcasing perspectives from funders, lawyers, insurers and more across a packed day of content. Following on from the successful inaugural edition in 2022, this year’s event once again demonstrated the growing strength of the litigation funding market, both in the UK and across the globe. The agenda also managed to capture the broad diversity of perspectives within the industry, with lively discussion and debate across the panels and breakout sessions. The day began with a panel focused on the current state of litigation funding in Europe, which immediately demonstrated the changes in the regional market over the last 12 months. Whereas last year’s panel on this topic was dominated by discussion around the Voss Report and the looming prospect of further regulation, yesterday’s conversation was firmly focused on the increasing innovation in the market and an evolving landscape that has seen competing models of third-party financing develop. Litica’s Ed Yell emphatically stated that “the growth in Europe over the last year has been spectacular”, and Iain McKenny from Profile Investment described the current state of play as a “hot bed for evolution.” A core element of the panel’s conversation revolved around the growing formation of a secondary market for litigation finance transactions, with JBSL’s co-founder Sarah Lieber summarising it aptly: “Secondary trading is the hallmark of a maturing asset class, it’s necessary to think about from the beginning of every funding deal.” The second panel of the morning ventured into the economics of the market, looking at the different types of funder capitalization and the challenges faced by funders looking to raise capital in the turbulent market. The panellists explored the differences between the UK and US market, with Ted Farrell from Litigation Funding Advisers, highlighting the lack of portfolio funding deals in the UK and pointing out that “single case is always going to be super expensive.” Neil Purslow explained that from Therium’s perspective, portfolio deals in the UK “usually don’t work well and fail”, resulting in a pivot back towards single case funding. The first of two panels focusing on the role of litigation insurance saw a wide-ranging discussion that covered everything from the type of cover available, to the increasingly varied ways that funders, law firms and insurers are collaborating on deals. On this topic, Robin Ganguly from Aon, stressed the need for funders and insurers “to work together to make the industry sustainable,” emphasising that “deals have to be attractive to everyone or deals won’t get done.” All the panelists agreed that those seeking insurers needed to be more proactive and prepared, with Tom Davey of Factor Risk Management putting it in clear terms: “Get insurance when it’s available, not three weeks before trial.” Unsurprisingly, the following panel discussion on class actions and group litigation immediately turned to the subject of the Supreme Court’s PACCAR ruling. Echoing similar sentiments from speakers earlier in the day, most of the panelists agreed that funders and law firms were taking a pragmatic approach and exploring a variety of alternative structures for funding agreements and working closely with clients to find an optimal solution. Brown Rudnick’s Elena Ray provided the clearest overview of the situation, saying that firms “are not seeing a negative impact on the litigation funding space, so the parties have adjusted well to the PACCAR judgement.” Lara Melrose from Orchard Global described the UK’s group action market as “a very buoyant one” and noted that funders are benefitting from the courts’ flexible approach as demonstrated in recent decisions including the first amalgamation of claims in the CAT and the first application for a collective settlement. Alex Garnier of NorthWall Capital also pointed out that part of funders’ interest in class actions stems from the fact that “they’re not just fought in the courtroom they’re also fought in the court of public opinion”, thereby creating added pressure on large corporates to settle rather than “having their dirty laundry aired in court for months.” After a break for lunch and networking, the agenda once again returned to the topic of insurance, but with this panel putting an added emphasis on the lawyers’ perspective. Prompted by the panel’s moderator, Rocco Pirozzolo, the lawyers on the panel discussed some of the difficulties and frustrations they’ve faced when looking to secure insurance for a case. HFW’s Nicola Gare turned the question on its head, instead pointing out some best practices, with a particular emphasis on those funders who are able to give a prompt decision and explain their reasoning. Meanwhile, Jamie Molloy from Ignite Insurance, and James Gowen-Smith from Miller, both said that it was important for all parties to remember it was a collaborative relationship and that it always worked best where there was adequate transparency, and where insurers were involved in the strategy discussions as early as possible. The agenda turned from the present to the future in the next panel, with an insightful discussion around new models of delivering legal finance and how new technology, such as emerging AI tools, can be incorporated to fuel future growth. Nick Rolwes-Davis from Lexolent led the calls for more innovation and change in the funding process, arguing that the industry was “probably overdue a change” and that increased efficiency could be achieved by “using technology as a triage tool.” Ben Knowles of Clyde & Co. offered similar support for evolution within litigation funding, pointing out that from a law firm’s perspective, “if technology could improve that due diligence process, then hopefully more cases could be funded.” In the penultimate session of the day, Louise Trayhurn from Legis Finance, and Carlos Ara Triadu from Cuatrecasas, led the room in an engaging and entertaining interactive session. Trayhurn turned the tables on the audience, seeking out the varying perspectives of lawyers and funders on the evolving relationship between funders and law firms. Whilst some attendees were more hesitant than others, the live Q&A format provided an excellent change of pace and allowed for a free-flowing discussion about the unique challenges and opportunities around the lawyer-funder dynamic. For the final panel of the event, the focus shifted to developments in continental Europe and the ongoing implementation of the EU’s Directive on Representative Actions. The discussion, moderated by Joanna Curtis from Brown Rudnick, looked at the differing approaches to implementation across Europe, focusing on the panelist’s local jurisdictions of Germany, Ireland, and Spain. Whilst all the speakers agreed that the directive was a positive development overall, they also pointed out that in terms of enhancing access to litigation funding in Europe, it may not produce significant changes. Elaine Whiteford from Wilkie Farr & Gallagher highlighted that there are still “a number of critical issues that the initiative doesn’t address for funders” in Europe, with the use of funding still primarily limited by each country’s national laws on its permissibility. Overall, IMN’s second UK event managed to provide an insightful exploration of the litigation funding industry and provided attendees with a comprehensive view of the market, bolstered by insights from stellar thought leaders. Across a busy day of content, the forum offered a platform for a variety of perspectives, generating debates and discussions that will no doubt continue long after the event. LFJ looks forward to seeing how IMN continues to build on the success of the 2023 forum in the future.
