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Commercial Legal Innovation Special Features

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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Case Developments Commercial

Sony and Apple Challenge Enforceability of Litigation Funding Models

By John Freund |

A pivotal UK court case could reshape the future of litigation finance agreements, as Sony and Apple reignite legal challenges to widely used third-party funding models in large-scale commercial disputes.

An article in Law360 reports that the two tech giants are questioning the validity of litigation funding arrangements tied to multibillion-pound cartel claims brought against them. Their core argument: that certain litigation funding agreements may run afoul of UK laws governing damages-based agreements (DBAs), which restrict the share of damages a representative may take as remuneration. A previous Court of Appeal decision in PACCAR Inc. v. Competition Appeal Tribunal held that some funding models might qualify as DBAs, rendering them unenforceable if they fail to comply with statutory rules.

This resurrected dispute centers on claims brought by class representatives against Apple and Sony over alleged anti-competitive behavior. The companies argue that if the funding arrangements breach DBA regulations, the entire claims may be invalidated. For the litigation funding industry, the outcome could severely curtail access to justice mechanisms in the UK—especially for collective actions in competition law, where third-party financing is often essential.

The UK’s Competition Appeal Tribunal previously stayed the proceedings pending clarity on the legal standing of such funding arrangements. With the dispute now heading back to court, all eyes will be on whether the judiciary draws a clear line around the enforceability of funder agreements under current law.

The decision could force funders to rework deal structures or risk losing enforceability altogether. As UK courts revisit the DBA implications for litigation finance, the sector faces heightened uncertainty over regulatory compliance, enforceability, and long-term viability in complex group litigation. Will this lead to a redefinition of permissible funding models—or to a call for legislative reform to protect access to collective redress?

Case Developments Commercial

Funder’s Interference in Texas Fee Dispute Rejected by Appeals Court

By Harry Moran |

A Texas appeals court has ruled that a litigation funder cannot block attorneys from pursuing a fee dispute following a remand order, reinforcing the limited standing of funders in fee-shifting battles. In a 2-1 decision, the First Court of Appeals found that the funder’s interest in the outcome, while financial, did not confer the legal authority necessary to participate in the dispute or enforce a side agreement aimed at halting the proceedings.

An article in Law360 details the underlying case, which stems from a contentious attorney fee battle following a remand to state court. The litigation funder, asserting contractual rights tied to a funding agreement, attempted to intervene and stop the fee litigation between plaintiffs' and defense counsel. But the appellate court sided with the trial court’s decision to proceed, emphasizing that only parties directly involved in the underlying legal work—and not third-party financiers—are entitled to challenge or control post-remand fee determinations. The majority opinion concluded that the funder’s contract could not supersede procedural law governing who may participate in such disputes.

In dissent, one justice argued that the funder’s financial interest merited consideration, suggesting that a more expansive view of standing could be warranted. But the majority held firm, stating that expanding standing would invite unwanted complexity and undermine judicial efficiency.

This decision sends a strong signal to funders operating in Texas: fee rights must be contractually precise and procedurally valid. As more funders build fee recovery provisions into their agreements, questions linger about how far those rights can extend—especially in jurisdictions hesitant to allow funders a seat at the litigation table.

Commercial Regulatory Issues

Oklahoma Moves to Restrict Foreign Litigation Funding, Cap Damages

By John Freund |

In a significant policy shift, Oklahoma has enacted legislation targeting foreign influence in its judicial system through third-party litigation funding. Signed into law by Governor Kevin Stitt, the two-pronged legislation not only prohibits foreign entities from funding lawsuits in the state but also imposes a $500,000 cap on non-economic damages in civil cases—excluding exceptions such as wrongful death. The new laws take effect November 1, 2025.

An article in The Journal Record notes that proponents of the legislation, including the Oklahoma Civil Justice Council and key Republican lawmakers, argue these measures are necessary to preserve the integrity of the state's courts and protect domestic businesses from what they view as undue interference. The foreign funding restriction applies to entities from countries identified as foreign adversaries by federal standards, including China and Russia.

Critics, however, contend that the laws may undermine access to justice, especially in complex or high-cost litigation where third-party funding can serve as a vital resource. The cap on non-economic damages, in particular, has drawn concern from trial lawyers who argue it may disproportionately impact vulnerable plaintiffs without sufficient financial means.

Oklahoma’s move aligns with a broader national trend of state-level scrutiny over third-party litigation funding. Lawmakers in several states have introduced or passed legislation to increase transparency, impose registration requirements, or limit funding sources.

For the legal funding industry, the Oklahoma law raises pressing questions about how funders will adapt to an increasingly fragmented regulatory landscape. It also underscores the growing political sensitivity around foreign capital in civil litigation—a trend that could prompt further regulatory action across other jurisdictions.