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How Our Top-5 Articles of 2021 Foretell What’s Coming in 2022

How Our Top-5 Articles of 2021 Foretell What’s Coming in 2022

Litigation Finance has enjoyed another year of growth and innovation, as we enter a shocking third year of the COVID pandemic. New funds have arisen, affording more potential claimants an opportunity to experience their day in court. New entrants are emerging in the funding space, innovative investment opportunities are popping up in the form of ILOs on the blockchain, and prominent examples of the benefits of legal funding are arising with increasing frequency. Each of our top-5 most popular articles in the last year illustrate an industry trend we think is worth keeping an eye on. These trends also offer clues as to what we can expect in the coming year. Below are the top-5 articles from 2021:  #5) Litigation Finance and Patent Litigation—Fast Friends 2021 Trend: One thing we’ve learned about third-party litigation funding is that once clients and plaintiffs get a taste of it, they recommend it highly. This leads to explosive growth in specific sectors. In this contributed post, Slingshot Capital founder Ed Truant explains that in 2021, Patent and IP litigation went from a relatively uncommon investment to one that is highly sought out. Some of this can be attributed to the pandemic and the investor rush toward uncorrelated assets. But some of the popularity of IP litigation investment stems from the possibility of awards in the multi-millions. As funders sharpen their due diligence skills and use new tech to predict case outcomes, the likelihood of sourcing meritorious patent cases grows. From the article: “It used to be the case that patent litigation was viewed negatively by the litigation funding community…Then about two years ago, I noticed an increase in the number of patent cases being brought to the attention of funders, and in the number of funders marketing that they are interested in providing financing to patent cases.” What does this mean for 2022? If/when COVID restrictions are lifted and life slowly returns to normal, we’ll likely see similar growth in other sectors. We know that when law firms and clients have a good experience with funders, word gets around. The expectation is that Litigation Finance will improve in recognition and accessibility. As a largely self-regulating industry, third-party legal funding continues to position itself as a public good. We have every reason to believe that will continue in 2022 #4) Litigation Finance Basics 2021 Trend: The popularity of this article, originally published in 2017, reveals interesting things about the business of legal funding. Legal professionals and many types of investors are taking an increased interest in litigation funding. It also underscores that this widespread curiosity about the industry is leading people to investigate it from its humble beginnings to its current role as a public good. From the article: “We don’t all have the same access to the legal system. Those with money have more access than those without. Litigation finance allows claimants without money to have the kind of access to justice that those with money currently enjoy. Obviously, that threatens some, but for the rest of us, litigation finance should be celebrated as a means of achieving equality of opportunity when it comes to preserving our legal rights.” What does this mean for 2022? We predict more of the same, probably on an even grander scale. As regulations become more welcoming to funders, investors are taking greater notice of the practice. Now that regulations are relaxing around non-lawyer ownership of legal firms, the potential for lawyer/funder co-ownership of firms has earned the interest of many prominent investment firms. Jurisdictions around the world are relaxing champerty and maintenance restrictions and creating an environment more welcoming to third-party funding for an array of legal matters. This includes arbitration, patent and IP litigation, and claims enforcement. The popularity of a back-to-basics piece like this one, demonstrates that more people in more industries are curious about what litigation funding can do for them. #3) The Impressive Growth of Commercial Litigation Finance 2021 Trend: Our third entry is another Ed Truant piece illustrating an interest in Litigation Finance from people outside the legal field. In this piece, however, emphasis is placed on the addressable market for litigation funding. This tells us that financial experts are looking toward third-party funding as a future investment. From the article: “I think it is important for all stakeholders to understand the size of an industry, so investors can determine whether it has the scale and growth attributes necessary to justify a long-term approach to investing in the sector.” What does this mean for 2022? We predict that hedge funds and private equity firms will continue to flock to the litigation funding sector. This may happen at an even faster clip, as certain types of litigation rise to prominence in the coming year. Breach of contract, insurance litigation, and issues of employer responsibility as related to COVID precautions are expected to flood court dockets in 2022. This amid an effort to catch up on the backlog of cases caused by court delays and closures.  More litigation means more opportunity for investors to avail themselves of the benefits of TPLF as an uncorrelated asset. #2) Investor Caveats in the Commercial LitFin Asset Class 2021 Trend: As an increasing number of investors seek out litigation funding, the pitfalls associated with this type of investment aren’t as well known. Ed Truant of Slingshot Capital, shows up again on our list, as he explains how investors can better understand this asset class. Matters of tail risk, gross vs net returns, portfolio valuation, and deployment risks are all areas investors will want to be familiar with. After all, just because an asset is uncorrelated, does not mean it is free from risk. From the article: “The asset class presents a unique opportunity to add an asset that has true non-correlation, along with inherent ESG attributes. This makes litigation finance a very attractive asset class. However, an investor needs to do their homework prior to executing an investment.”  What does this mean for 2022? The emphasis on ESG investing bodes well for the future. Litigation Finance’s commitment to investing in environmental, social justice, and governance litigation shines a light on the fact that LitFin investments can be simultaneously lucrative, and a net gain for society. #1) Bank Cartel Claims Europe Announces $12 Million Funding Round 2021 Trend: The popularity of this article is an affirmation of the growth and expansion of Litigation Finance in the EU market. The piece details three antitrust cases in which the fund will deploy cash. The banks are accused of engaging in cartel behavior—one of the most serious types of antitrust charges. This type of piece serves to illustrate how litigation funding helps fight corruption and works toward the public good. It also shows us that fundraising capital is out there for experienced funders with proven track records. From the article: “In these three cases, for example, the pension and hedge funds that lost millions of dollars…can effectively claim their damages through actions before a national court. …in most cases, the remaining question to be decided is the amount of damages. This makes antitrust litigation very attractive for investors.” What does this mean for 2022? We think this means even greater global expansion for Litigation Finance. While funding still has its naysayers, the global mood toward third-party legal funding is largely positive. As the practice casts a progressively wider net—most of those who have used litigation funding to pursue their litigation report being satisfied with the results. Legal funding is already growing in India, Singapore, Germany, South Africa, and China. There’s no reason to think expansion of the industry will not continue in 2022.
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Burford Releases New Quarterly on Navigating Global Business Disputes

By John Freund |

Burford Capital has published a new Burford Quarterly that pitches legal finance as a strategic resource for corporates and law firms confronting increasingly complex, cross-border matters. Vice Chair David Perla frames the theme succinctly: legal finance is no longer merely a tool to pay fees—it’s a way to unlock capital trapped in claims and manage portfolio risk as regulatory scrutiny and multijurisdictional exposure rise.

The issue is built around sector playbooks. A pharma feature addresses how generic and branded drug makers use financing to shoulder costly Hatch-Waxman litigation and development timelines, positioning capital as a buffer where damages are uncertain but speed to market is critical.

A construction-arbitration piece tracks the uptick in global disputes amid supply-chain shocks, decarbonization mandates, and elongated project schedules, with third-party capital smoothing cash flow over multi-year EPC programs and helping parties sustain high-value claims through arbitration.

Two additional components round out the package. A ten-year lookback on the UK’s opt-out competition regime argues funding has been central to the maturing collective-actions market and will remain pivotal as policymakers contemplate broader redress. And a Q&A tied to Burford’s strategic minority investment in Kindleworth explores how alternative capital and law-firm entrepreneurship intersect to seed specialist boutiques and align incentives with client outcomes.

UK Courts And Policymakers Narrow The Post-PACCAR Gap For Funders

By John Freund |

The UK’s fast-evolving funding landscape continues to clarify what works—and what doesn’t—after PACCAR. In July, the Court of Appeal in Sony Interactive v Neill held that LFAs pegging a funder’s return to deployed or committed capital, even when paid from proceeds and subject to a proceeds cap, are not damages-based agreements. That distinction matters: many CAT and other group LFAs were rewritten over the past year to swap percentage-of-recovery models for multiple-based economics, and the ruling indicates those structures remain enforceable when drafted with care.

Quinn Emanuel's Business Litigation Report traces the arc from PACCAR’s treatment of percentage-based LFAs to Sony v Neill’s clarification and the policy response now gathering steam. The analysis underscores that returns keyed to funding outlay—not the quantum of recovery—avoid the DBA regime, reducing the risk that amended post-PACCAR agreements are second-guessed at certification or settlement approval.

The Civil Justice Council’s June Final Report outlines a legislative repair kit: a statutory fix to reverse PACCAR’s impact prospectively and retrospectively; an explicit separation of third-party funding from contingency-fee arrangements; a shift from self-regulation to light-touch statutory oversight; and, in exceptional cases, judicial power to permit recovery of funding costs from losing defendants. The CJC would also keep third-party funding of arbitration outside the formal regime.

For market participants, the immediate implications are contractual. Multiples, proceeds caps, waterfall mechanics, and severability language deserve meticulous treatment; so do disclosure and control provisions, given heightened judicial scrutiny of class representation and adverse costs exposure.

Burford Hires Veteran Spanish Disputes Lawyer to Bolster EU Footprint

By John Freund |

Burford Capital has strengthened its European presence with its first senior hire in Spain, recruiting Teresa Gutiérrez Chacón as Senior Vice President based in Madrid.

According to the press release, Gutiérrez Chacón brings over 16 years of experience in complex dispute resolution, international arbitration, and legal strategy—most recently serving as Chief Legal Counsel for Pavilion Energy’s European trading arm. Her prior roles include positions at Freshfields and Gómez‑Acebo & Pombo, and she has been recognized by Legal 500 as a “Rising Star” in Litigation & Arbitration and named Best Arbitration Lawyer Under 40 by Iberian Lawyer.

In her new role, she will deepen Burford’s relationships with Spanish law firms and corporations, positioning the firm to address the growing demand in Spain for legal finance solutions. Burford emphasized that Spain’s sophisticated legal market presents “significant opportunities,” and that adding on‑the‑ground leadership in Madrid enhances its ability to deliver local insight and cross‑jurisdictional support.

Philipp Leibfried, Burford’s Head of Europe, noted that this hire demonstrates a commitment to expanding in key European jurisdictions and strengthening Burford’s role as a “trusted partner” for law firms and businesses seeking innovative capital solutions.