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Key Takeaways from LFJ’s Podcast with Steve Shinn

December 13, 2021

Key Takeaways from LFJ’s Podcast with Steve Shinn

On the latest episode of the LFJ Podcast, Steven Shinn, founder of FinLegal, described the solutions his platform provides for both funders and lawyers, and explains his company’s points of differentiation with other third party platform providers.

Q: Why move into litigation funding and after-the-event insurance? Can you explain how FinLegal’s offerings are different than those of traditional funders?

A: Absolutely. I think one of the challenges is that the litigation funding market could grow a great deal. But there are challenges where lawyers don’t necessarily understand litigation funding, and there are a lot more funders that you can go to. So you want to help educate people who are new to litigation funding and ATE about how to access it and how it works.

There are more funders joining, which is increasing the number of claims that get funded. So whereas before you might have only had funders looking to deploy $5 million to a claim, you now find situations where there are funders who want to deploy as little as $100,000 or less. So there’s a much broader range of funders…and it’s hard to go to all of them individually and it’s hard to know who’s in the market.

We thought, let’s build a sticky platform which provides the law firm with visibility and control over those funding requests, and let’s give them an online process (to write the best possible funding request) in terms of how it’s positioned to the funders so that it does get funding. With lots of funders to navigate, let’s build a platform to help lawyers navigate them, help them understand it—and let’s help them put forward the request with the best possible positioning.

Q: You mentioned getting involved in group actions (the UK version of US-style class actions). What got you interested in that space particularly, and does your technology background in any way penetrate that space?

A: Definitely. It started out as me seeing the VW group claim, and also seeing cartel claims, price-fixing on football shirts, and things like this. With my technology background, I thought ‘Well, how are law firms doing this?’

I saw that they had a lot of off-line case management platforms, they use a lot of spreadsheets. You know these systems didn’t talk to each other. There’s a lot of manual effort and no mobile interfaces for claimants to interact with the law firm. So I thought, ‘We can build a platform that will enable that.’ Essentially, we’d be taking a completely fresh look at it. With a technology and software development background and a product development background. How do we build/provide something that enables lawyers to spend the least time possible working with each claim. We know that’s important to the economics of the claim—not having to spend a lot of manual effort on each claim.

So that’s what we produced, a solution that works on a management by exception basis, so essentially the claimant goes through an automated set of steps. And where they fall out of those steps or where they don’t meet certain criteria, only then do they need to get picked up by the law firm.

Q: I know you offer a claim automation solution, can you explain what this solution does?

A: The main benefit of the solution is that it increases the volume of clients. So what you tend to find, is if there’s a bad claimant experience, people fall out of the process. You’ve spent money on acquiring that claimant, you spend advertising pounds or dollars to get them into your funnel, to start working with them. But they become disenfranchised from your process, right? Or they don’t like getting a lot of phone calls, or they feel like the process is insecure and it happens via Email without clear instruction. So if you have a good online process, it increases the volume of clients. That’s the first thing.

And it reduces the amount of time spent per client also, because…the law firm is only working with clients who fall out of the automated process. It’s also plug-n-play, so if you want to start work on a new type of matter it might be that this week you’re building a book of emissions claimants, and the following week you want to launch a shareholder claim.

You can launch that from the platform in a matter of days and start book building. You’re not having to have lots of different contractors and different systems that you have to modify to start doing something new or different. You talk to us, we set it up for you, and then you manage it through an interface that you’re very familiar with.

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Commercial

Burford Capital Says $700 Million Cash Position Keeps Growth Plans on Track After YPF Setback

By John Freund |

Burford Capital issued a follow-up statement on March 30 addressing the financial fallout from the Second Circuit's reversal of the $16.1 billion judgment against Argentina in the long-running YPF nationalization dispute.

As reported by PR Newswire, the litigation funder emphasized that the ruling has no cash impact on its operations, pointing to more than $700 million in cash, cash equivalents, and marketable securities on hand. The company said its diversified portfolio routinely delivers cash proceeds independent of the YPF asset and reaffirmed plans to double its portfolio by 2030 without additional borrowing.

Burford expects a substantial GAAP write-down of the YPF asset as of March 31, with full details to be disclosed in its first-quarter results in the first half of May. Management noted the write-down is a non-cash accounting adjustment that does not affect operational cash flow.

Looking ahead, Burford signaled it may pursue arbitration through the World Bank's International Centre for Settlement of Investment Disputes under bilateral investment treaties. The company argued Argentina breached investment protections during the 2012 expropriation, though it acknowledged any ICSID proceeding would be a multi-year process.

The statement comes days after Burford shares cratered more than 45% following the Second Circuit's March 27 decision, which found Argentina's nationalization of YPF was governed by public law rather than private corporate bylaws, rendering the breach-of-contract claims non-cognizable.

Commercial

Cadence Minerals Secures Litigation Funding for Arbitration Against Mexico Over Lithium Nationalization

By John Freund |

Cadence Minerals has obtained third-party litigation funding to pursue an international arbitration claim against Mexico following the cancellation of its mining concessions during the country's lithium sector nationalization.

As reported by Investing.com via bilaterals.org, LCM Funding SG Pty Ltd has approved financing for the arbitration on a non-recourse basis, meaning Cadence and its subsidiary REM Mexico Limited have no obligation to repay if the claims are unsuccessful. The funding arrangement is designed to allow the company to pursue the case while preserving its balance sheet flexibility.

Cadence and REM Mexico allege that Mexico violated the UK-Mexico bilateral investment treaty by canceling concessions tied to the Sonora Lithium Project. The claims include unlawful expropriation and failure to provide fair and equitable treatment to foreign investors.

CEO Kiran Morzaria said the funding "materially strengthens our ability to pursue the arbitration in an appropriately resourced manner." The company indicated it remains open to negotiated settlement discussions with the Mexican government.

The case highlights the growing role of litigation funding in investor-state dispute settlement, where resource companies increasingly turn to third-party funders to pursue treaty-based claims against sovereign governments over nationalization and regulatory actions.

Commercial

JPMorgan Asset Arm Enters Litigation Finance With Mass Tort Fee Investments

By John Freund |

JPMorgan Asset Management has made its entry into the litigation finance sector by advancing funds to two major mass tort law firms, marking a significant milestone as one of the world's largest financial institutions moves into the legal funding space.

As reported by Bloomberg Law, the investments were made through JPMorgan's Lynstone Special Situations Fund II, a $2.4 billion fund closed in June 2022. The deals involve post-settlement arrangements with Seeger Weiss and Simmons Hanly Conroy, two prominent plaintiffs' firms.

The structure allows law firms to receive accelerated payments for attorneys' fees that have already been earned but not yet collected. Investors profit when final fee payments exceed their initial advances, with returns typically falling in the low double digits. Because the deals are completed after settlements have been reached, they carry significantly less risk than traditional litigation funding tied to case outcomes.

Seeger Weiss serves as lead counsel in Ozempic and Depo-Provera litigation and played a key role in opioid settlements. Simmons Hanly Conroy received 11.4% of a $2.14 billion opioid litigation fee fund and led Norfolk Southern derailment litigation.

JPMorgan's move follows a broader trend of institutional investors entering litigation finance. Fortress Investment Group, BlackRock, and Davidson Kempner Capital Management are among the major firms increasingly active in legal asset investments, drawn by returns that are uncorrelated with equity markets. Commercial litigation funders deployed $2.8 billion in new commitments last year across 346 deals.