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Lexolent Litigation Fund 1 SP Achieves First Successful Investment Conclusion, Delivering Access to Justice in Landmark DIFC Case

Lexolent Litigation Fund 1 SP Achieves First Successful Investment Conclusion, Delivering Access to Justice in Landmark DIFC Case

Lexolent Litigation Fund 1 SP, the inaugural fund from litigation funding disruptor Lexolent, and the first litigation fund to be based in the UAE, has achieved its first successful investment in a case litigated before the Dubai International Financial Centre (DIFC) Courts. The matter—Claim No. CFI 081/2023, concerned an unpaid commission claim by Dubai based businessman, Michael Forbes.

Absent Lexolent’s funding, Mr Forbes would have been unable to pursue the case and secure the payment to which he was rightfully entitled. The investment, which was concluded over just 21 months, will generate a very high internal rate of return (IRR) for Lexolent’s Limited Partner (LP) investors, showcasing the fund’s ability to deliver both strong financial performance and tangible social impact.

The result was a resounding success for both parties. Lexolent secured a strong return on its investment, while Mr Forbes obtained a substantial and life-changing judgment in his favour.

“Without Lexolent’s help, I would not have been able to right the wrong that was done to me,” said Mr Forbes. “Lexolent gave me access to justice, and I am delighted to have been introduced to them. I have learned through this experience that not all litigation funders are the same. Nick Rowles-Davies is very much one of the original founders of this industry and is exceptionally easy to work with. His expertise and experience made this transaction straightforward and highly professional.”

Lexolent CEO, Dr Nick Rowles-Davies, commented: “This is a perfect example of litigation funding in action. Without our investment, Mr Forbes would not have been able to secure such a substantial and transformative judgment. It was our pleasure to assist him—and, from our perspective, it was also a very strong investment, particularly given the high IRR that will be achieved for our LPs over a short 21-month period.”

This first win for Lexolent Litigation Fund 1 SP marks a significant milestone for the company as it continues to reshape the litigation finance landscape both in the Middle East and globally. The case underscores the vital role litigation funding plays in levelling the playing field between claimants and well-resourced defendants, ensuring that justice is not a privilege but a right accessible to all.

Syed Mujtaba Hussain, founding partner of UAE based boutique law firm Emirates Legal, acted for Mr Forbes and instructed David Parratt KC and William Frain-Bell KC.

Mr Hussain commented: “This was the first time I have used litigation funding but I will certainly do so again. Lexolent were easy to work with and allowed the lawyers to do their job without concern over fees being met. Litigation funding is a valuable tool and it assisted in producing a great result for Mr Forbes. We are all delighted with the outcome.”

About Lexolent:

Lexolent is a globally coordinated network for legal finance professionals and the first litigation fund to be based in the UAE, offering innovative funding solutions and unmatched expertise in litigation finance. Led by industry pioneer Dr Nick Rowles-Davies, Lexolent connects capital providers with high-value legal claims, delivering results for claimants and investors alike.

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Litigation Funding Voided: Bankruptcy Court Underscores Need for Court Approval

By John Freund |

Litigation finance has become an increasingly utilized tool to support valuable claims in financially distressed bankruptcies. However, a recent decision from the Northern District of Texas—voiding a $2.3 million litigation funding agreement between a liquidating trustee and a funder—has reignited scrutiny over how these arrangements are structured and approved.

An article on McDonald Hopkins's website emphasizes best practices in the wake of that ruling, urging parties to proactively ensure enforceability of funding agreements. Even when plan documents appear to authorize litigation funding, it’s strongly recommended that parties secure explicit approval from the bankruptcy court. Such approval enhances certainty, mitigates future challenges, and solidifies the funder's standing against all estate stakeholders.

Key recommendations from the advisory include:

  • Prepare for judicial and stakeholder scrutiny. Courts are likely to closely examine the economics and procedural fairness of funding agreements. Demonstrating that terms are fair, reasonable, and beneficial to the estate and creditors is essential.
  • Review existing agreements carefully. Funders and trustees should verify that their authority is clearly established in underlying plan or trust documents and confirm whether the arrangement has been properly disclosed and court‑approved. If not, consider options like negotiating revised terms or seeking court ratification.
  • Maintain transparency and documentation. Keep detailed records of communications, payments, and disclosures. Monitor developments in the case for challenges to funding arrangements.
  • Engage experienced bankruptcy counsel. Legal guidance is critical to respond to objections and navigate the nuanced landscape of litigation finance in reorganization contexts.

This ruling serves as a clear reminder: litigation funding in bankruptcy requires far more than a signed agreement—it demands judicial scrutiny and explicit approval. Stakeholders must prioritize transparency, heavy documentation, and procedural integrity to ensure arrangements are respected.

LCJ Calls Out Burford, Fortress for Control Provisions in TPLF Contracts

By John Freund |

A new salvo has been fired in the debate over transparency in litigation finance. Lawyers for Civil Justice (LCJ) has submitted a comment letter to the Advisory Committee on Civil Rules exposing what it says are extensive control provisions in third-party litigation funding (TPLF) contracts—contradicting funders’ public assertions of passivity.

A press release from Lawyers for Civil Justice highlights excerpts from nearly a dozen funding agreements, including contracts involving Burford Capital and a Fortress Legal Assets affiliate, that purportedly grant funders authority to select counsel, approve or reject settlements, and even continue litigation after the plaintiff exits the case. These “zombie litigation” provisions, LCJ argues, represent de facto control by financiers—despite repeated funder claims that they do not direct litigation strategy.

At stake is a proposed federal rule requiring disclosure of litigation funding agreements in civil cases. LCJ’s letter offers ammunition to supporters of mandatory disclosure, citing examples such as a Burford-Sysco agreement that bars settlement without funder consent, and an International Litigation Partners contract that allows the funder to issue binding instructions to attorneys. In one instance, a funder retained the right to continue litigation in its own name even after the plaintiff had withdrawn—raising red flags over who actually drives case outcomes.

Funders like Burford, Parabellum, and Statera have long argued they are “passive investors” and do not “control legal assets.” But the LCJ analysis directly challenges these claims, suggesting a significant gap between public narrative and contractual reality.

If adopted, a federal disclosure rule would mark a seismic shift in how courts assess conflicts of interest and strategic control in funded litigation. For the legal funding industry, the debate underscores a pivotal question: can funders claim passivity while retaining the contractual tools of influence?

Burford’s Law-Firm Equity Pitch Meets BigLaw Resistance

By John Freund |

Initial reactions from major US law firms suggest that Burford Capital’s push to invest in firm-side operations via managed services organizations (MSOs) will be a tougher sell than the funder’s splashy rollout implied. While the model aims to channel outside capital into back-office functions like billing, HR, and tech — leaving the lawyer-owned entity to practice law — several BigLaw leaders question the need for new money and the wisdom of ceding any control to non-lawyer investors, however indirectly.

Bloomberg Law reports that Burford, which has deployed roughly $11 billion in traditional litigation finance since 2009, is courting select US firms with minority-stake proposals modeled on structures common in healthcare and accountancy. Hogan Lovells CEO Miguel Zaldivar flagged cultural and control concerns, while other leaders said partner capital and bank lending already cover priorities — including AI investments — without the governance trade-offs an MSO may entail.

Burford’s chief development officer, Travis Lenkner, countered that MSOs would be passive, contract-bound investors and could “unlock” equity value and free cash flow for tech, laterals, or even acquisitions. Notably, US megafirms have not publicly embraced the idea; investor appetite may skew toward boutiques and mid-sized firms, where a $25 million Catalex Network fund is already targeting MSO-style plays.

For litigation finance, the stakes are high. If MSOs catch on, funders could extend beyond case-by-case or portfolio deals into durable, annuity-like firm relationships that complement core financing. If BigLaw continues to demur — citing Model Rule 5.4 sensitivities and “who’s in charge” worries — the immediate opportunity could migrate to smaller platforms or remain centered in more permissive jurisdictions (e.g., the UK), where Burford previously took a 32% stake in PCB Litigation. Either way, today’s pushback underscores a growing question: will US law-firm ownership rules evolve fast enough for funders’ equity ambitions to move from pitch deck to practice?