Trending Now

Key Takeaways from LFJ’s Virtual Town Hall: Spotlight on Australia

By John Freund |

Key Takeaways from LFJ’s Virtual Town Hall: Spotlight on Australia

On Wednesday October 16th (Thursday the 17th, in Australia), LFJ hosted a virtual town hall titled ‘Spotlight on Australia.’ The event featured Michelle Silvers (MS), CEO at Court House Capital, Stuart Price (SP), CEO and Managing Director of CASL, Maurice Thompson (MT), Global Head of Litigation Funding at HFW, and Jason Geisker (JG), Head of Claims Funding Australia. The event was moderated by Ed Truant, Founder of Slingshot Capital.

Unfortunately, Jason Geisker was unable to join the panel due to technical difficulties. However, the other three panelists covered a broad range of topics relating to litigation funding in Australia. Below are key takeaways from the event:

ET: Australia is a pioneer in the use of litigation finance. Can you provide an overview of the Australian market?

MS: Australia has been involved in litigation funding for over 20 years, since the late 1990s. At the moment it’s an interesting environment, we have listed and private funders, hedge funds, law firms and private insurers. Our market is dominated by litigation funders, not necessarily alternative capital sources, which is what tends to happen overseas. We’ve witnessed the market globalizing with offshore funders entering, and local funders expanding abroad, but a lot of the offshore funders have withdrawn from the market in recent years.

The market is small – Australia’s population is 25-28 million, so you can imagine that the way we operate here is quite different than overseas. We have about 10 players operating in the Australian market at the moment. Our environment is quite different than overseas, it’s smaller and well-knit. We all know each other quite well, we compete for the same cases. It’s fierce competition, and an exciting environment.

ET: In terms of return profile, I ‘ve been privy to a lot of litigation finance resolutions on a global basis, and in my review of the data, it strikes me that Australian funders are some of the best in terms of producing consistent returns, albeit the quantum of financing is a little bit smaller than what you might find in the US. Generally speaking, do you agree with that? And to what would you attribute the performance of Australian funders?

SP: I attribute that to the predictability of outcomes, and that really comes from the jurisdiction being established for a long time. Some of the growing pains that other jurisdictions are having, are dealing with new issues and new laws. Most of our bench that deals with litigation funding and new actions, they were senior and junior lawyers, partners, barristers, and now have become judges. So there is an ingrained knowledge of the system, and an appreciation of the importance of litigation funding to provide access to justice.

That in itself also goes with the Australian civil justice system, which is an absolute Rolls Royce. It is gold-plated, it is costly, so you need to be able to navigate that in a way where duration risk doesn’t become an issue to you. So when you talk about performance, I absolutely agree Australia is up there as one of the better performing markets in the world. We select our cases well and we settle cases before trial (about 95% of cases settle before trial – that brings duration risk down). That combination of factors are all a reflection of the 25 years-plus of existing in this market.

ET: Up until recently, outside of the class action space, lawyers have not been able to engage in contingent fee arrangements, but jurisdictions like Victoria have changed this dynamic. Can you discuss the current state of contingent fee arrangements and its likely trajectory, and the implications for the litigation funding market?

MT: Everything Stuart mentioned about this being an isolated part of the world, and the impacts that has on doing business here, is absolutely correct. A flip on that though, is that degree of isolation that we’ve had as a nation has always had us looking closely outside of our borders. So we observe what’s happening in other parts of the world and that influences how we think.

Some of the comments you’ve heard might suggest that we’re a slightly immature legal market, in the sense that politics have impacted the courts and there has been some degree of uncertainty since 2020. But I’d flip that and say that this is a case of us looking hard at what we need moving forward and what will suit Australia. The largest differential between us and the United States, for instance, is that we never want to see a situation in Australia where the overweight child might sue the fast food chain because some lawyer provides contingent fee arrangements, all those sorts of things. We’ve laughed at that scenario overseas, and we don’t want that here. So the whole idea of contingent fees stirs up all sorts of feelings in our legal environment, and in having to deal with those negative perceptions, we have to think very carefully about how we structure things moving forward.

In the period between 2020 and now, there’s been a proliferation of class actions in Victoria to take advantage of the contingent fee arrangements. Not all law firms have done that – my law firm, for instance, we’re running three large plaintiff class actions at the moment, we’ve got a few others in the pipeline. We’re currently not fixated on Victoria, because among other things, the way it’s been dealt with – generally if you want to take full advantage of a contingent arrangement sanction by the court and legislation, you have to bear all the risk of the costs and a security for costs order against the law firm. And most law firms won’t stomach that at all (because this is so new). But other law firms see this as an opportunity – particularly large national firms like Maurice Blackburn for instance. Large firms like that will take advantage because they can finance the risk. If I’m going to sell that to my partners in London, Asia or elsewhere, it’s a different proposition.

So we are inching closer to a wider opportunity for law firms to take on contingent risk, but we’re not there yet. I don’t think it’s going to be the free for all that people have been concerned about. That’s not to say there hasn’t been class actions flooding into Victoria as opposed to other states, but I think that will slow down. And so a firm like us is looking beyond the Victoria borders.

To view the entire 1-hour discussion, please click here.

Secure Your Funding Sidebar

About the author

John Freund

John Freund

Commercial

View All

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.