Trending Now
  • The Case for Nonlawyer-Owned Firms: Filling Consumer Justice Gaps Left by Big Law
Commercial Special Features

Key Takeaways from LFJs Digital Event: Litigation Finance: What to Expect in 2024

February 12, 2024

Key Takeaways from LFJs Digital Event: Litigation Finance: What to Expect in 2024

On February 8th, 2024, Litigation Finance Journal hosted a special digital event titled ‘Litigation Finance: What to Expect in 2024.’  The event featured Gian Kull, Senior Portfolio Manager at Omni Bridgeway, David Gallagher, Co-Founder of LitFund, Justin Brass, Co-CEO and Managing Director of JBSL, and Michael German, Co-Founder and CIO at Lex Ferenda. The event was moderated by Peter Petyt, founder of 4 Rivers. The discussion covered a range of topics pertinent to the litigation funding space. Below are some key takeaways from the event: Which areas are you particularly interested in investing in over this coming year?  MG: There is a supposition that this industry will continue to grow in 2024. All of the indicators suggest that the industry will continue to grow–nearly all of the funders are funding bankruptcy-related cases, and three quarters are funding patent cases. Those are areas of interest to us, and I think that will continue to make sense, given the types of commercial cases they are – complex cases that require significant amounts of attorney time and defendant time,  and yield significant costs to the litigaiton. JB: We’re going to see a continued expansion into the mass arbitration space. That is something that has been coming up with more frequency. Mass torts has been staying quite busy. And where we see a lot of potential is with the evolution of the secondary market. There are a lot of funders coming up with maturing cases, and it makes sense for those funders to redeploy that capital into other opportunities – not necessarily exit that case – but just sell a minority stake or a portion of it. We that in traditional fixed income classes, so we think that is going to continue in the funding market as well. Are you seeing any kind of appetite to invest in jurisdictions you haven’t previously invest in? Have some jurisdictions matured to the point where you now will give them a serious look?  GK: That’s a hard question to ask Omni Bridgeway as a whole, because we try to be in a lot of places. But from my own experience in Europe, we’ve gotten quite comfortable in the Netherlands, we have a very large investment in Portugal. Spain is next on the list. Italy is after that. The jurisdiction I’ve been most disappointed in – aside from the UK with the regulatory issues there – is Germany. For such a large economy, from a commercial collective redress perspective that is a dead end. As we move through Europe, I’ll be watching the regulatory regimes and how those are tested over the coming years. Are you seeing many requests for monetization of judgements or awards, or is that not an area that you are particularly interested in?  DG: We’re especially interested in that, largely because my partners have spent a lot of their careers making those types of investments. And just speaking from my own experience, that has always been an important part of the market, and continues to be an important part of the market. I think the availability of judgement preservation insurance makes funding more available and appropriate both on the funder’s side and the client’s side. In my view, it’s very interesting to see the number of people in the market moving into the insurance space. In my view quite a surprising number – it’s certainly indicative of a trend. LFJ just announced today that Ignite has launched a capital protection insurance resource. So there are a lot of interesting things happening here. Is it still early days for this space, because there are a lot of people moving into it with interest?  MG: I share the sentiment of having a general level of surprise with how many folks from the litigation finance industry insurance has drawn. From the Lex Ferenda perspective, insurance has proven to be a very expensive option, that ultimately my clients and I don’t feel is worth the cost. But the vast majority of our investments – from an insurer’s perspective – are probably the least good fit, so that’s probably why it’s reflecting in the price. JB: I think the insurance aspect of litigation finance is here to stay. There will be growing pains along the way. I think even as recently as last week, there were disclosures in the Affordable Care Act fee dispute where the law firm got an insurance policy related to its fee award. What was interesting there, was the law firm was seeking disclosure about the policy, and in essence how it worked. So not only is it new and here to stay, we’re seeing it become public. The risk to early-stage cases is the pricing can be expensive, but what will happen over time, is like anything else, the insurers will be tracking the progress on those cases, and as funders come back as repeat customers, they’ll be looking at you and factoring that relationship into their pricing, just like how a bank factors that into a credit score. I think the best path forward is figuring out how to work together and create a level of transparency and trust, because it’s not going away. For the full recording of the event, click here.

Commercial

View All
Commercial

Rocade CEO Says Law Finance Deal Is About ‘Choosing the Winners’ as Litigation Finance Matures

By John Freund |

Days after Rocade Capital announced its acquisition of fellow funder Law Finance Group, chief executive Brian Roth is framing the deal as a marker of a maturing asset class, one in which strategic combinations reflect strength rather than distress. The commentary offers a window into how industry leaders are reading a wave of consolidation now reshaping litigation finance.

As reported by Bloomberg Law, Roth characterized the transaction as evidence that "consolidation is a sign of a maturing asset class," drawing a sharp contrast with earlier deals in the sector. Much of the prior M&A activity, he suggested, stemmed from distressed situations that "look like maybe more of a foreclosure or wind down."

"This is the opposite, right?" Roth said. "This is choosing the winners." In his telling, the litigation finance market has reached a point where acquiring well-performing firms represents genuine sector growth, rather than the rescue of failing entities, a distinction he sees as fundamental to understanding where the industry is headed.

The combined platform, which has deployed more than $2.3 billion, positions Rocade to extend its reach beyond its traditional mass tort and contingency-fee niche into Law Finance Group's appellate, commercial, and single-case business. Roth's remarks come amid intensifying interest in litigation finance from institutional capital and a broader debate over how the sector should scale. As funders weigh their own growth strategies, his framing of consolidation as a sign of maturity, rather than weakness, is likely to resonate across a market still defining its trajectory.

Commercial

New Jersey Bill Would Mandate Disclosure of Third-Party Litigation Funding Agreements

By John Freund |

New Jersey has joined the growing list of states moving to regulate third-party litigation funding, with an Assembly bill advancing that would require disclosure of funding agreements and impose substantive limits on funders' role and returns. The measure reflects mounting legislative interest in bringing transparency to a market that has largely operated outside formal oversight.

As reported by Shore News Network, Assembly Bill 2159 would require parties in civil and administrative cases to disclose litigation funding agreements to the court for in-camera review within 30 days of filing or executing the agreement, whichever is later. The Assembly Financial Institutions and Insurance Committee advanced the bill with amendments on June 7, moving it forward for further consideration.

Beyond disclosure, the legislation imposes meaningful guardrails on funder conduct. Funders would be prohibited from influencing case decisions, settlement negotiations, or legal strategy, and could not provide legal advice or select attorneys. The bill caps a funder's share at no more than 25% of litigation proceeds and limits combined payments to funders and attorneys to 50% of any recovery absent explicit consent. It also bars the assignment or securitization of funding agreements.

The bill carries real enforcement teeth: violations would constitute unfair or deceptive practices under New Jersey's Consumer Fraud Act, agreements could be deemed unenforceable, and funders would become jointly liable for court costs and sanctions imposed on funded parties. The proposal adds New Jersey to a widening field of states, alongside recent action in Kansas and Illinois, testing how far funding regulation should reach.

Commercial

Australian Court Holds Julian Wright’s Litigation Funders Liable for Billionaire Sister’s Legal Costs

By John Freund |

A Western Australian court has found the litigation funders who backed Julian Wright's failed fraud claim against his billionaire sister, Angela Bennett, liable for her legal costs, leaving the financial backers facing heavy losses. The ruling is a pointed reminder that funders who bet on high-stakes litigation can be left exposed when a case collapses.

As reported by Business News Western Australia, the dispute stems from Julian Wright's suit against Bennett and the estate of his late brother, Michael Wright, alleging the siblings concealed the true scale of the family's mining wealth and deprived him of millions in royalties. At the heart of the case was Wright's 1987 sale of his one-third stake in the family business for $6.8 million, two decades before a mining boom transformed the company's fortunes.

Wright's claim was dismissed, his bid for leave to appeal to the High Court was rejected, and he was ordered to pay his sister's legal fees. With Wright unable to satisfy that obligation, the court has now turned to those who financed his litigation, holding the funders responsible for Bennett's costs.

The decision underscores the downside risk inherent in litigation funding, particularly in non-recourse arrangements where funders absorb the cost of failure. For backers who anticipated substantial returns from a successful claim against a mining fortune, the outcome is a costly lesson in adverse-costs exposure, and a cautionary tale that will resonate with funders weighing speculative, high-value disputes.