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Key Takeaways from LFJ’s Town Hall on How Litigation Funders Should Respond to the UK Supreme Court Ruling

Wednesday, August 9th, LFJ hosted a panel of UK-based litigation funding experts who discussed the recent UK Supreme Court decision, and the potential impacts on the funding industry. The expert panel included: Nick Rowles-Davies (NRD), Founder of Lexolent, Neil Johnstone (NJ), Barrister at King’s Bench Chambers, and Tets Ishikawa (TI), Managing Director at LionFish. The panel was moderated by Peter Petyt (PP), Founder and CEO of 4 Rivers Services.

PP: How does this ruling impact the enforceability of LFAs in current, ongoing cases?  And what about LFAs from previously funded and concluded cases?  

NRD:  It has a pretty big impact.  First of all, the existing arrangements between clients and litigation funders are going to come under scrutiny, because the lawyers acting for clients are going to have to review their positions. This is not a decision which is making new law, this is a statement of existing law as it has always been, so that review will have to be dealt in the light of the decision.

The bigger impact is going to be on concluded cases. That may cause some difficulties. I’m already hearing that there are ongoing discussions on matters that have already concluded, where an agreement that provided for a percentage to be paid to the funder is now being discussed as to whether it should have been paid. That is going to be a distraction, it is going to be an ongoing issue, and I suspect that there will be opportunistic attempts on the part of defendants, in terms of challenging existing litigation funding agreements. So how that concludes, one can only guess, but the reality is, it’s a distraction and disruption, and will be an ongoing issue.

PP: Tets, you’re running a fund. You’ve concluded agreements, you’ve got ongoing agreements. How are you proposing to deal with all of this? 

TI: Ultimately we are in the business of funding litigation cases, so the world goes on. We can’t stop doing it just on the basis of what may be a speculative risk. What we’re trying to understand here, is the key risks we have. In terms of our book, we don’t have any percentage share of the awards, in relation to proceedings in the CAT. So we’re safe in that regard. But in terms of enforceability, there are some agreements that we’ve had to refute. But obviously, that’s a commercial conversation, and the reality is, people are generally appreciative that they’ve got funding, not ungrateful, so there’s a lot of cooperation.

I agree with Nick that generally speaking, the ongoing cases and cases going forward are more manageable. The big distraction will be the concluded cases. My position is slightly more nuanced than Nick’s, in that I think it is a distraction, but I think it’s going to be far less of a risk, partly because the reality is that a lot of funding agreements are entered into in the first place with the purpose of helping claimants that are impecunious. If the claimants have got damages out of it, they are certainly very grateful. Granted, there are some who may not have gotten as much as they wanted because of funding arrangements. But there is the fact that they’ve gone through a very long litigation process. If it was all about money, then some might very well pursue that course of action. But the reality is, most will think twice about going after a funder, and if they do, the chances are that they’ll probably need funding anyway. So if they have to go back to funders, only funders with no interest or claims or willingness to back the industry in the UK would fund those claims. So I think it’s more of a distraction than a real risk.

PP: Do you see any consolidation or direct impacts on the consolidation piece, from this judgement? 

NJ: I suspect there will be anyway. This comes at a time that is difficult for all funders given the larger macro-environment. This comes at unfortunate timing. However, the hardest knives are forged in the hottest fires. I do think you will see not just consolidation within the industry, but funders looking at where they can best add value, such as portfolio funding or other strategies, so they have a proper niche within the market.

Overall, it’s not terminal for the industry by any stretch. It is a bump in the road that is inherent in any growing industry. But I do think that regulatory clarity would help the industry a lot. There is a lot of useful ammunition for ILFA in Lady Rose’s dissenting judgement and in previous judicial comments making well-worded judicial criticism of the legislative patchwork we have in the UK. And I think there could be a very good argument to put forth to a government that I hope could be sympathetic to wishing this industry continues. London is a legal and financial capital of the world, and this industry sits at that nexus. So long term, there is nothing to particularly worry about.

To listen to the full panel discussion, please click here.

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Omni Bridgeway Funds Fresh Paint-Peel Claim Against Toyota Australia

By John Freund |

Omni Bridgeway has stepped in to bankroll a newly-filed Federal Court class action alleging that certain 2010-14 Toyota Corolla models suffer from a manufacturing defect that causes factory “040 white” paint to flake under UV exposure. Lead plaintiff Mary Elizabeth Fabian seeks compensation for diminished vehicle value and associated distress.

An article in Lawyerly says William Roberts Lawyers lodged the claim late Wednesday in Sydney, with Omni providing “no-win-no-pay” financing and an adverse-costs indemnity. The suit covers consumers who bought affected sedans or hatchbacks after 1 January 2011.

Plaintiffs allege Toyota breached Australia’s Consumer Law guarantee of acceptable quality, citing a 2022 Toyota bulletin that acknowledged adhesive degradation between primer and base metal. Class members face no out-of-pocket exposure; Omni recoups costs and takes a court-approved commission only from any recovery. Registration is open nationwide, and Omni’s portal details eligibility tests based on VIN build plates and paint codes.

The case exemplifies funders’ deepening appetite for high-volume consumer-product claims. Success here could spur similar “cosmetic defect” suits—particularly in Australia’s active class-action market—further diversifying funders’ portfolios beyond financial-services and securities disputes.

Burford Capital Faces Fresh Argentine Pushback in YPF Turnover Battle

By John Freund |

Argentina’s legal team has fired its latest salvo in the long-running, Burford-backed YPF litigation, lodging two emergency briefs with U.S. District Judge Loretta Preska that seek to halt her 30 June order compelling the country to transfer its 51 percent stake in the oil major to a BNY Mellon escrow within 14 days.

An article in Infobae reports that the Treasury Solicitor’s Office argues immediate compliance would violate Argentina’s hydrocarbon-sovereignty statute, trigger cross-default clauses, and irreversibly strip state control of a company central to the Vaca Muerta shale programme. The briefs also insist the $16.1 billion judgment—won by Petersen Energía and Eton Park after Burford Capital financed their claims—presents “novel questions” on sovereign immunity and extraterritorial asset execution, meriting a stay pending Second Circuit review.

Burford’s creditors countered earlier this week, citing Governor Axel Kicillof’s public remarks as proof of obstruction. Argentina retorted that Kicillof holds no federal brief, seeking to neutralise that leverage while underscoring the U.S. Justice Department’s past reservations about enforcing foreign-sovereign turnovers. Judge Preska is expected to rule on the stay motion within days; absent relief, the share transfer clock runs out on 15 July.

A stay would underscore enforcement risk, even after a blockbuster merits win. Funders will watch Preska's decision, and capital-providers hunting sovereign-risk cases may calibrate pricing accordingly.

Palisade, Accredited Specialty Secure $35 Million Legal Risk Cover

By John Freund |

Specialty managing general underwriter Palisade Insurance Partners has taken a significant step to scale its fast-growing contingent-legal-risk book, striking a delegated-authority agreement with Accredited Specialty Insurance Company. Including the Accredited capacity, Palisade has up to $35 million in coverage for legal risk insurance products. The New York-headquartered MGU can now offer larger wraps for judgment preservation, adverse-appeal and similar exposures—coverages that corporates, private-equity sponsors and law firms increasingly use to de-risk litigation and unlock financing.

An article in Business Insurance reports that the deal provides Palisade's clients with the comfort of carrier balance-sheet strength while allowing the insurer to expand its program portfolio. The capacity tops up Palisade’s existing relationships and arrives at a time when several traditional markets have retrenched from contingent legal risk after absorbing a spate of outsized verdicts, leaving many complex disputes under-served.

Palisade leadership said demand for robust limits has “never been stronger,” driven by M&A transactions that hinge on successful appeals, fund-level financings that need portfolio hedges, and secondary trading of mature judgments. Writing on LinkedIn, Palisade President John McNally stated: "Accredited's partnership expands Palisade's ability to transfer litigation exposures and help facilitate transactional and financing outcomes for its corporate, law firm, investment manager and M&A clients."

The new facility aligns the MGU’s maximum line with those of higher-profile peers and could see Palisade participate in single-event placements that have historically defaulted to the London market. For Accredited, the move diversifies its program roster and positions the insurer to capture premium in a niche with attractive economics—provided underwriting discipline holds.