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Key Takeaways from LFJ’s Virtual Town Hall: 2024 Recap & 2025 Outlook

By John Freund |

Key Takeaways from LFJ’s Virtual Town Hall: 2024 Recap & 2025 Outlook

Last week, LFJ hosted its final virtual town hall of the year which covered an array of key developments and trends in the legal fundng sector. Panelists included Tets Ishikawa (TI), Managing Director of LionFish, Boris Ziser (BZ), Co-Head of the Finance Group at Schulte Roth and Zabel, William Marra (WM), Director at Certum Group, and Sarah Johnson (SJ), Head of the Litigation Investing Team at The D.E. Shaw Group. The panel was moderated by Rebecca Berrebi (RB), Founder and CEO of Avenue 33, LLC.

Below are the key takeaways from the event.

RB: What are the key changes that have effected the regulatory landscape of litigation finance in 2024, and how do you think those changes have affected deals in the industry this year?

TI: There’s been quite a few symbolic moments over the past two years. There was a proposal [The Voss Report] saying that litigation funding should be regulated and there should be a cap on fees. In the UK, there as a Supreme Court decision in the case of PACCAR that considered litigation funding agreements to be damages-based agreements, basically making a lot of litigation funding agreements unenforceable. And that has triggered an industry-wide review of the litigation funding industry in the UK by the Civil Justice Council. And that is ongoing, with a report expected next year, and the government may act on those recommendations and enact legislation.

In addition to all of that, there was a report written by the European Law Institute, which is probably the most interesting thing to focus on. Rather than the usual high level narratives of what’s good and bad about litigation funding, it actually proposed principles on the back of research and feedback that it got on all sides of the argument. And it was written by some really highly regarded judges and academics. And the report was quite balanced. But what was really interesting about the report was that it set a tone for the direction of how the UK should really be thinking about litigation funding. The key themes coming out of it are that 1) there is no one size fits all solution-litigation funding has many different parts to it, and 2) that regulation is not just something one does, but there needs to be a real identifiable problem that regulation resolves, otherwise there could be a lot of adverse consequences, and that recognition is key. There is also the recognition that funders do run commercial businesses, so there has to be an economically viable solution.

RB: Deal structures evolve as time goes on, and certainly have evolved in our industry. Boris, can you speak to any particular deal structures that have become less popular this year than they were before, or have started to fall by the wayside?

BZ: I wouldn’t say any have fallen by the wayside, I think that there has been a little bit of a shift – if you go back a number of years, you would see there were more debt deals than equity deals, and that was for various reasons, some of it was preference, some was tax-driven, some was based on an analysis of whether you would be splitting legal fees and things like that – and I think over the last couple of years, you have seen more of a shift where more parties are comfortable with equity deals, particularly with the introduction of alternative business structures in Arizona and Utah. So I don’t think that anything has gone by the wayside, but there has been more comfort and more development on the equity side of the business.

RB: Will, do you see that too? What do you think about that?

WM: Yeah I think that’s right. What’s interesting is, there hasn’t been that much development on the question of which provisions in litigation funding contracts may or may not be enforceable, or the big question of tax clarity. I think Boris makes a very good point about Rule 5.4, the debate around that has largely settled. So you do see an increase around law firm deals. I think this question is also tied up with the increasing diversification of products available, and if you start too think about insurance, and insurance-backed debt, and debt plus equity in these deals, we’re seeing a lot of that. We’re also seeing an increase in acquisitions to the extent that claims are alienable and can be acquired. I think that a lot of claim holders are seeing a lot of benefits entering into those sorts of arrangements.

RB: Sarah, what deal structures do you think are growing in popularity, and why do you think that is happening?

SJ: We’ve seen something similar in the shift from debt to equity. I might characterize it though as a move away from debt to law firms, where your collateral is a lot of cases. I think we’ve seen those deals – especially the ones that happened before Covid – there were a lot of different risks that were introduced rather than just the underlying litigation. The amount of OpEx that the law firm needed to survive, and when you’re debt financing for the whole firm, it gets very complicated. So we’ve seen a shift away more to – I won’t say single cases – but perhaps smaller portfolios with a law firm, so you can target your exposure and share more of the risk and OpEx with the law firms themselves.

We’ve also seen a bifurcation in terms of the size of deals. We’re seeing some more very large deals, like $100MM+ deals, and also small single cases, than perhaps we saw in previous years. We’re just seeing a lot of one-off single case deals where funders can share the risk, vs. entire portfolio monetizations.

To view the entire discussion, join the event page on LinkedIn (you must register for the event to view).

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John Freund

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Harris Pogust Joins Bryant Park Capital as Senior Advisor

By John Freund |

Bryant Park Capital (“BPC”) a leading middle market investment bank and market leader in the litigation finance sector, is pleased to announce that Harris Pogust has joined the firm as a Senior Advisor.  Harris (Mr. Pogust) is one of the best known and prominent attorneys in the mass tort and class action fields, he was the founding partner and Chairman of Pogust Goodhead worldwide until early 2024 and is currently working with Trial Lawyers for a Better Tomorrow, a charity Harris founded, to help children reach their educational potential all over the world.  Harris’ life work has been to deliver justice for those who have been damaged or injured through the negligence or bad faith of others.

“We are thrilled to have Harris as part of our team.  His knowledge, experience and relationships in the litigation finance sector are of great value to Bryant Park and our clients.  As the litigation finance world becomes more competitive, complex and challenging, having an expert like Harris on our team is invaluable,” said Joel Magerman, Managing Partner of Bryant Park.

Harris’ efforts, in conjunction with Bryant Park will focus on assisting law firms and funders in developing strategies to more efficiently fund their operations and cases and assist them in establishing the right relationships for future growth.  Harris commented, “I have been fortunate to have been a practicing attorney and partner in law firms for over 35 years focused on building and growing a worldwide book of business in the class action/mass tort field.  That required significant capital and throughout my career I have raised over $1 billion for my firms.  I have learned what works and what doesn’t.  I have seen both the risks and rewards in this industry.  I look forward to being able to work with law firms and funders to assist them in putting the right strategies in place with Bryant Park and bringing capital and liquidity to help them grow and flourish.”

About Bryant Park Capital

Bryant Park Capital is an investment bank providing capital raising, M&A and corporate finance advisory services to emerging growth and middle market public and private companies. BPC has deep expertise and a diversified, well-founded breadth of experience in a number of sectors, including specialty finance & financial services. BPC has raised various forms of credit, growth equity, and assisted in mergers and acquisitions for its clients. Our professionals have completed more than 400 assignments representing an aggregate transaction value of over $30 billion.

For more information about Bryant Park Capital, please visit www.bryantparkcapital.com.

20 Legal Firms and Groups Calling on UK Government for Urgent Legislation to Reverse PACCAR

Despite a government-commissioned independent review recommending priority standalone legislation to reverse PACCAR, the Government has failed to act, the letter to the Lord Chancellor says.

“As a highly respected member of the legal community, the Prime Minister rightly often speaks of ‘following the evidence’.

“The independent experts have provided the evidence that this issue needs fixing, yet this Government refuses to act, delaying justice for some and denying justice for future claimants.

“We call on the Government to act swiftly and legislate for the sake of claimants and the reputation of the UK’s justice system.”

The letter follows earlier calls on the Government from claimants to reverse PACCAR urgently, including from Sir Alan Bates , truck hauliers and the lead claimant in a mass action case against six water suppliers for alleged customer overcharging.

This comes amid a drop off in collective proceeding cases in the Competition Appeal Tribunal this year according to Solomonic, as reported in the Financial Times this morning (link). 

Neil Purslow, Chairman of the Executive Committee of ILFA, said:

“We’ve been warning successive governments for more than two years about the potential impact this uncertainty will have on consumers and small businesses’ ability to access justice.

“These figures show that stark reality. Meritorious claims are going unfunded, alleged wrongdoers are unchallenged and competition - one of the great drivers of growth - is not being enforced.

“The Government must act before this small trickle of cases dries up altogether.”

Martyn Day, co-founder of Leigh Day and co-president of the Collective Redress Lawyers Association (CORLA) which signed the letter, said: 

“This issue has created a great deal of uncertainty that is blocking access to justice for ordinary people taking on powerful corporations accused of wrongdoing. 

“The system simply cannot work without litigation funding, and this is a timely reminder to government to fix this issue, and urgently.”

In July 2023, the Supreme Court ruled in the PACCAR judgment that litigation finance agreements were unenforceable unless they met the requirements of Damages-Based Agreements, rendering many ongoing cases invalid and causing delays in the pursuit of justice for millions of claimants. 

The Civil Justice Council (CJC) concluded its comprehensive review of the funding sector four months ago, after the Government had promised to review what legislation might be needed to address PACCAR once the review was complete. The CJC’s review urged priority standalone legislation to reverse the damaging effects of PACCAR. Yet, despite earlier promises, the Government has said the review would merely “help to inform the approach to potential reforms” in “due course”. 

The letter highlights how the Government’s continued inaction contradicts the Prime Minister's own commitment to "following the evidence”.

The signatories, representing firms including Mishcon de Reya, Stewarts, Freeths, and Scott+Scott UK, highlight the “pivotal role” of group actions. They call on the Government to “act swiftly” to adopt the CJC’s recommendation to reverse PACCAR to protect the reputation of the UK’s justice system. The firms also include those who have provided legal representation for Sir Alan Bates, hauliers ripped off by truck manufacturers (link), and leaseholders fighting secret insurance charges (link).

Since the ruling, crucial investment into the UK economy is rapidly being lost. Litigation funders like Burford Capital are taking their funds elsewhere, with CEO Chris Bogart, stating his firm has begun ‘migrating some dispute resolution away from London’, following PACCAR. 

Litigation funding enables claimants with limited means to access justice, enabling landmark cases including those brought by the subpostmasters, retail workers, and small business owners, to hold multinational corporations accused of serious wrongdoing to account, while promoting fair, competitive markets and securing investment into the UK.

--

Below is the letter to the Lord Chancellor, in its entirety:

Rt Hon David Lammy MP
Lord Chancellor and Secretary of State for Justice
Ministry of Justice
102 Petty France
London
SW1H 9AJ

Dear Lord Chancellor,

Congratulations on your new role as Lord Chancellor and Justice Secretary. While we recognise the many challenges you'll face stepping into this role, we wanted to highlight a critical issue that is undermining access to justice and stifling investment in the UK's legal system. But it's an issue with a quick and simple fix.

Group actions in the UK play a pivotal role in enabling individuals to come together to bring claims against those accused of wrongdoing - often multinational corporations with significant resources. It has helped claimants like the subpostmasters, shopworkers, retail investors, and small business owners access justice.

The regime is underpinned by claimants’ abilities to access finance - often through litigation funding where funders provide financial backing for an agreed return of any settlement. However, as you know, the future of this mechanism and the regime is under threat thanks to the disruptive effects of the 2023 PACCAR judgment, and subsequent challenges to the enforceability of funding arrangements.

Claimants with limited means are struggling to access funding to bring their cases, and investment from funders is draining away from the UK legal system.

The Government promised to review what legislation might be needed to address PACCAR once the Civil Justice Council’s review had concluded. 

The CJC reported back 4 months ago with a thorough and nuanced perspective on the funding sector. As members of the legal community, we are sympathetic to sensible reforms and are reassured that the Government is considering these carefully. 

But one unequivocal and pressing recommendation from the CJC was for urgent standalone legislation to reverse the effects of PACCAR to end the uncertainty damaging access to justice. Disappointingly, the Government has so far failed to hear that call, saying only that the review would “help to inform the approach to potential reforms” in “due course”, despite its previous promises.

As a highly respected member of the legal community, the Prime Minister rightly often speaks of “following the evidence”. The independent experts have provided the evidence that this issue needs fixing, yet this Government refuses to act, delaying justice for some and denying justice for future claimants. 

We call on the Government to act swiftly and legislate for the sake of claimants and the reputation of the UK’s justice system.

Signed

The Collective Redress Lawyers Association (CORLA).
Stewarts
Group Actions & Competition, Stephenson Harwood
Scott+Scott UK LLP
Backhouse Jones
Freeths 
Humphries Kerstetter LLP
Mishcon de Reya LLP
Velitor Law
Milberg London LLP
Fladgate LLP
Geradin Partners
Harcus Parker
Tim Constable, Bates Wells
Phi Finney McDonald
Keidan Harrison LLP
Asserson
Leigh Day
Cooke, Young & Keidan LLP
KP Law

Shai Silverman Departs CAC Specialty, Joins Litica as U.S. Head of Underwriting

By John Freund |

After four years helping to build CAC Specialty’s contingent risk insurance practice from the ground up, Shai Silverman is departing the firm to join litigation risk insurer Litica as its Head of Underwriting – U.S.

In a LinkedIn post, Silverman reflected on his time at CAC, where he joined in the early days of the firm’s efforts to turn contingent risk insurance into a mainstream product. Alongside colleagues Andrew Mutter, Michael B. Wakefield, and David Barnes, Silverman helped develop insurance solutions for a wide array of legal risks, crafted bespoke products for hundreds of clients, and played a key role in launching the first-ever contingent risk insurance conference.

Silverman now moves to Litica, a UK-headquartered specialist insurer focused on litigation and contingent risks, to lead its U.S. underwriting function. His move signals not just a personal transition but also the growing transatlantic ambitions of insurers operating in this once-niche corner of legal risk.

Silverman’s departure marks a broader inflection point for contingent risk insurance—a sector now poised for significant expansion. As underwriting talent like Silverman shifts into leadership roles at specialist firms, questions emerge around how traditional insurers will respond, and whether contingent risk insurance will continue its trajectory toward becoming a standard risk-transfer tool for litigation and arbitration.