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Key Takeaways From LFJ’s Podcast With Erik Bomans, CEO and Executive Board Member of Deminor

May 31, 2022

Key Takeaways From LFJ’s Podcast With Erik Bomans, CEO and Executive Board Member of Deminor

On the latest episode of the LFJ Podcast, we spoke with Erik Bomans, CEO and Executive Board Member of Deminor. Mr. Bomans discussed recent developments and trends in litigation funding in continental Europe, including what the total addressable market looks like and how that is expected to grow over time, how country-specific jurisdictions are differentiated, some of the main barriers to investing in litigation funding in Europe, and how the regulatory environment across the continent can actually be a benefit to funders. Below are some key takeaways from the conversation, which can be found in full here. LFJ: How big is the European market for funding? How do you assess the total addressable market?  EB: We have conducted our own research and have estimated the total addressable market in Europe at $1.8B, and that includes the UK. It is a small market, we estimate that it is 16% of the total addressable market of litigation funding.  By comparison, we estimate that the total addressable market in the US is $9B. That is nearly 5x bigger than the entire European market.   When we say the total addressable market, we mean the potential for litigation funding. We get to these numbers by looking at the value of the litigation market, and we apply a percentage which is the penetration rate in that specific market.  LFJ: In terms of a country specific breakdown, I imagine most of the activity happening in Germany and France. Your company Deminor has offices in Belgium, Luxembourg and Milan, so there must be a lot of action in these other jurisdictions as well. Is that the case, is there a lot of activity across Europe?  EB: We are active in most European countries. The top countries without a doubt are the UK and Germany.  We estimate the total addressable market in the UK at $800M. The other $1B is spread out over continental Europe. With Germany definitely taking the biggest part, nearly ⅓. . The Netherlands is the third most active country in Europe.  LFJ: What are some of the barriers to investing in the litigation funding market? Can you share some challenges funders find in this market?  EB: There are pitfalls, Europe is a highly regulated market in general. Litigation funding contracts come with mandatory rules with highly regulated rules such as consumer protection. In Germany and France, legal advice can only be provided by practicing lawyers.  One of the areas in Europe where litigation funding has been scrutinized most in Europe is antitrust cases, where some funders have used the assignment level to structure their litigation funding agreements.   LFJ: How does the EU’s regulatory environment provide opportunities for litigation service providers? I want to ask you specifically about Deminor. How does the regulatory environment provide your business with growth opportunities? EB: Antitrust is the next big area of growth, with the UK and Germany taking the lead. With Italy and Spain becoming active in this area as well. Litigation finance is a risky business, but there are new areas of growth in new emerging areas of litigation funding. Definitely, there are new  opportunities there for litigation funders. But it will be important for litigation funders to pick the right cases.  LFJ: What are your predictions for how the EU litigation funding market develops over the next few years? EB: Litigation funding is strongly growing here in Europe. The business is volatile, and no matter how much you diversify, returns may always be volatile.    

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Rowling Foundation Offers to Fund NHS Single-Sex Space Challenges

Author J.K. Rowling has offered to underwrite legal challenges brought by NHS patients and staff over single-sex facilities policy, in a privately funded intervention arriving days after new equality guidance took effect in the UK.

As reported by PinkNews, the offer followed an announcement by the Midlands Partnership University NHS Foundation Trust that trans women could continue to use women-only wards, changing rooms and toilets in line with their gender identity. Rowling directed anyone seeking support to her foundation, writing that "should any female patient or member of staff require funding to fight this assault on their legal rights, apply to jkrwf.org."

The offer, made on 8 August, follows guidance from the Equality and Human Rights Commission that came into force on 5 August recommending that single-sex facilities be allocated according to sex recorded at birth. EHRC guidance is not itself binding law, and the resulting gap between the Commission's recommendations and individual trusts' operational policies is what any litigation would test.

For the funding sector, the arrangement sits outside the commercial model. Rowling's foundation is not seeking a return, and the funding is philanthropic rather than an investment in claim proceeds. That distinction matters to the regulatory debate: disclosure regimes advancing in the UK and elsewhere are generally aimed at financiers holding an economic interest in the outcome, and campaign-driven backing raises questions those frameworks were not designed to address.

The case also illustrates how litigation funding has become a mechanism for pursuing contested policy questions. Where a claimant lacks the resources to challenge an institutional policy, outside capital determines whether the question reaches a court at all — a dynamic increasingly visible on both sides of politically charged disputes.

No claim has yet been filed.

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ATA Chairman Presses Congress for Litigation Funding Disclosure

The chairman of the American Trucking Associations has called on Congress to require disclosure of third-party litigation funding in civil cases, arguing that undisclosed outside financing distorts claims against motor carriers.

As reported by Transport Topics, the argument was set out by Greg Hodgen, chief executive of Groendyke Transport and chairman of the ATA, who described a system in which investors are "pouring money into civil litigation not to advance justice, but to maximize their own payouts."

Hodgen's case rests on the structure of the trucking industry itself. More than 90% of motor carriers operate 10 trucks or fewer, leaving the majority of the sector without the reserves to absorb prolonged litigation. Where a large carrier can weather an extended case, a small operator faces settlement pressure that has little to do with the merits of the claim.

The remedy he proposes stops short of prohibition. Hodgen urged passage of the Protecting Third Party Litigation Funding From Abuse Act, which would compel disclosure of outside financial interests in a case while leaving the practice of funding intact. That framing places the argument alongside a broader wave of transparency measures advancing in state legislatures and before federal rulemaking bodies, rather than with proposals seeking to restrict funding outright.

Industry advocates counter that funding enables claimants who could not otherwise pursue meritorious cases, and that mandatory disclosure risks exposing litigation strategy to better-resourced defendants. The disagreement over disclosure has become the central fault line in the regulatory debate, with both sides now largely conceding that funding itself is a permanent feature of the litigation landscape.

The trucking sector's continued prominence in that debate reflects its position as one of the most frequently litigated industries in the country.

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Burford Reins In Large-Deal Appetite as It Eyes Law Firm Investment

Burford Capital has pulled back from the very largest commitments in its pipeline and cut roughly $10 million in annual compensation costs, as the funder recalibrates following the reversal of the YPF judgment earlier this year.

As reported by Non-Billable, the company reported a break-even second quarter, its first results since a $2.4 billion write-down in March tied to the appellate reversal of the $16 billion award against Argentina. The restructuring reduced management costs across a workforce of roughly 160 employees.

Chief Executive Chris Bogart characterized the changes as a deliberate narrowing rather than a retreat, telling the publication the firm had "somewhat reduced our willingness to take on some very large, but only moderately profitable deals." He described the compensation restructuring as "a one-off" rather than the beginning of repeated reductions.

The shift points toward a portfolio weighted less heavily to single outsized positions. Concentration risk has been the recurring critique of Burford's model, and the YPF reversal supplied the clearest illustration yet of how one matter can move a balance sheet. Screening for profitability rather than headline size addresses that exposure directly, though it also constrains the upside that made such positions attractive.

At the same time, Burford is examining investment in law firms seeking outside capital, an area opening up as alternative business structures and managed services organizations give firms routes to external investment that were previously unavailable. The funder has continued to deploy capital elsewhere, including a £5 billion UK class action against Google.

For a sector that has spent the year absorbing the consequences of the YPF reversal, Burford's positioning offers an early signal of how the largest players intend to balance scale against risk.