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LFJ Dealmakers Panel: Opportunities at the Intersection of Funding, Mass Torts & ABS

The panel discussion consisted of Jacob Malherbe, CEO of X Social Media, Sara Papantonio, Partner at Levin Papantonio Rafferty, and Ryan Stephen, Managing Partner of Pine Valley Capital Partners. The panel was moderated by Steve Nober, CEO of Consumer Attorney Marketing Group (CAMG),

The discussion spanned the following topics:

  • Who’s doing what in mass torts? How about funding?
  • How funders are evaluating and working with firms
  • Examples of the ABS framework in action & challenges
  • Pre- and post-settlement funding and time to disbursement

The conversation began around the integration of litigation funders into the mass torts sector. There are a lot of variables to consider around mass torts which typically don’t exist in other case types. These include marketing ethics, use of proceeds, claimant access and relationship building, where the call center is located, firm operations at an administrative level, etc.

These are all aspects of a law firm that litigation funders need to understand if they are going to partner with a mass torts law firm. The degree of diligence is vast, and will require a years-long commitment.

What’s more, there is now a focus on unethical marketing practices, with Congress taking a look at the tactics being used. The question for funders is, how can you protect yourself from unethical marketing efforts (funders might be named in a suit against the law firm). Funders need to mitigate these risks by asking more questions at the outset: What kind of advertising is being used, where are the clients coming from, how do I know that the clients are real (ad tracking)?

Too many funders are pouring money into this lucrative space, and run the risk of encountering scammers who set up a business looking to raise money for a mass torts claim, when they have no ability to secure claimants or conduct the proper marketing outreach. What this comes down to at its core is relationships—understanding and knowing who you’re working with. Funders need to feel that the law firm they partner with us trustworthy, but of course should still conduct their own diligence to verify that all activities are on the up and up.

On this last point, the panel recommends creating more nuanced tracking—not just ‘cost per case.’ Track advertising costs, medical records, other marketing materials. Really understand how money is moving at a granular level.

The discussion then pivoted over to the Camp Lejeune case. Sara Papantonio feels that there will be one more opportunity to make a push for cases when payouts start happening. The question is, will there be enough time to advertise and file a claim before the statute of limitations runs out?

Papantonio also noted that many clients won’t qualify for the elective option, and those that do probably won’t take it because of how undervalued it is. So likely, we will see more cases move into litigation. Values are starting to be presented for Tier 1 and Tier 2 injuries, which will help push this into litigation as well. She believes around May of 2024 will be an opportunity to advertise, but the statute of limitations runs out in August.

Papantonio explained that Tier 1 injuries are far less risk for funders and litigators. Tier 2s and Tier 3s will have to move through a process, and some won’t be approved, so there is more risk there. Papantonio also believes the fees will be capped at 20-25%, which was the DOJs recommendation. So funders and law firms should plan for that.

One final point Papantonio made, was that these mega mass torts are sucking up all the oxygen in the space, but there are plenty of smaller torts that are very meritorious and present opportunities for funders and law firms. The panel concurred, given that $1 billion has spent on Camp Lejeune already, so any new entrants into that claim are coming in late stage.

Panelists Ryan Stephen and Jacob Malherbe added that torts such as Tylenol, Roundup part two, paraquat, PFAS claim (which the panel believes might become the biggest case ever), anti-terrorism cases, and others.

Malherbe even recommended ‘The Devil We Know,’ a documentary on Netflix about the PFAS claim—so anyone interested can follow up with some binge watching!

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Case Developments Commercial

CAT Rules in Favour of BT in Harbour-Funded Claim Valued at £1.3bn

By Harry Moran |

As LFJ reported yesterday, funders and law firms alike are looking to the Competition Appeal Tribunal (CAT) as one of the most influential factors for the future of the UK litigation market in 2025 and beyond. A judgment released by the CAT yesterday that found in favour of Britain’s largest telecommunications business may provide a warning to industry leaders of the uncertainty around funding these high value collective proceedings.

An article in The Global Legal Post provides an overview of the judgment handed down by the CAT in Justin Le Patourel v BT Group PLC, as the Tribunal dismissed the claim against the telecoms company following the trial in March of this year. The opt-out claim valued at around £1.3 billion, was first brought before the Tribunal in 2021 and sought compensation for BT customers who had allegedly been overcharged for landline services from October 2015.

In the executive summary of the judgment, the CAT found “that just because a price is excessive does not mean that it was also unfair”, with the Tribunal concluding that “there was no abuse of dominant position” by BT.

The proceedings which were led by class representative Justin Le Patourel, founder of Collective Action on Land Lines (CALL), were financed with Harbour Litigation Funding. When the application for a Collective Proceedings Order (CPO) was granted in 2021, Harbour highlighted the claim as having originally been worth up to £600 million with the potential for customers to receive up to £500 if the case had been successful.

In a statement, Le Patourel said that he was “disappointed that it [the CAT] did not agree that these prices were unfair”, but said that they would now consider “whether the next step will be an appeal to the Court of Appeal to challenge this verdict”. The claimants have been represented by Mishcon de Reya in the case.

Commenting on the impact of the judgment, Tim West, disputes partner at Ashurst, said that it could have a “dampening effect, at least in the short term, on the availability of capital to fund the more novel or unusual claims in the CAT moving forward”. Similarly, Mohsin Patel, director and co-founder of Factor Risk Management, described the outcome as “a bitter pill to swallow” for both the claimants and for the law firm and funder who backed the case.

The CAT’s full judgment and executive summary can be accessed on the Tribunal’s website.

Commercial Fundraising

Sandfield Capital Secures £600m Facility to Expand Funding Operations

By Harry Moran |

Sandfield Capital, a Liverpool-based litigation funder, has reached an agreement for a £600 million facility with Perspective Investments. The investment, which is conditional on the identification of suitable claims that can be funded, has been secured to allow Sandfield Capital to strategically expand its operations and the number of claims it can fund. 

An article in Insider Media covers the the fourth capital raise in the last 12 months for Sandfield Capital, with LFJ having previously covered the most recent £10.5 million funding facility that was secured last month. Since its founding in 2020, Sandfield Capital has already expanded from its original office in Liverpool with a footprint established in London as well. 

Steven D'Ambrosio, chief executive of Sandfield Capital, celebrated the announced by saying:  “This new facility presents significant opportunities for Sandfield and is testament to our business model. Key to our strategy to deploy the facility is expanding our legal panel. There's no shortage of quality law firms specialising in this area and we are keen to develop further strong and symbiotic relationships. Perspective Investments see considerable opportunities and bring a wealth of experience in institutional investment with a strong track record.”

Arno Kitts, founder and chief investment officer of Perspective Investments, also provided the following statement:  “Sandfield Capital's business model includes a bespoke lending platform with the ability to integrate seamlessly with law firms' systems to ensure compliance with regulatory and underwriting standards.  This technology enables claims to be processed rapidly whilst all loans are fully insured so that if a claim is unsuccessful, the individual claimant has nothing to pay. This is an excellent investment proposition for Perspective Investments and we are looking forward to working with the management team who have a track record of continuously evolving the business to meet growing client needs.”

Announcements Case Developments Commercial

Australian Google Ad Tech Class Action Commenced on Behalf of Publishers

By Harry Moran |

A class action was filed on 16 December 2024 on behalf of QNews Pty Ltd and Sydney Times Media Pty Ltd against Google LLC, Google Pte Ltd and Google Australia Pty Ltd (Google). 

The class action has been commenced to recover compensation for Australian-domiciled website and app publishers who have suffered financial losses as a result of Google’s misuse of market power in the advertising technology sector. The alleged loss is that publishers would have had significantly higher revenues from selling advertising space, and would have kept greater profits, if not for Google’s misuse of market power. 

The class action is being prosecuted by Piper Alderman with funding from Woodsford, which means affected publishers will not pay costs to participate in this class action, nor will they have any financial risk in relation to Google’s costs. 

Anyone, or any business, who has owned a website or app and sold advertising space using Google’s ad tech tools can join the action as a group member by registering their details at www.googleadtechaction.com.au. Participation in the action as a group member will be confidential so Google will not become aware of the identity of group members. 

The class action is on behalf of all publishers who had websites or apps and sold advertising space using Google’s platforms targeted at Australian consumers, including: 

  1. Google Ad Manager (GAM);
  2. Doubleclick for Publishers (DFP);
  3. Google Ad Exchange (AdX); and
  4. Google AdSense or AdMob. 

for the period 16 December 2018 to 16 December 2024. 

Google’s conduct 

Google’s conduct in the ad tech market is under scrutiny in various jurisdictions around the world. In June 2021, the French competition authority concluded that Google had abused its dominant position in the ad tech market. Google did not contest the decision, accepted a fine of €220m and agreed to change its conduct. The UK Competition and Markets Authority, the European Commission, the US Department of Justice and the Canadian Competition Bureau have also commenced investigations into, or legal proceedings regarding, Google’s conduct in ad tech. There are also class actions being prosecuted against Google for its practices in the ad tech market in the UK, EU and Canada. 

In Australia, Google’s substantial market power and conduct has been the subject of regulatory investigation and scrutiny by the Australian Competition and Consumer Commission (ACCC) which released its report in August 2021. The ACCC found that “Google is the largest supplier of ad tech services across the entire ad tech supply chain: no other provider has the scale or reach across the ad tech supply chain that Google does.” It concluded that “Google’s vertical integration and dominance across the ad tech supply chain, and in related services, have allowed it to engage in leveraging and self-preferencing conduct, which has likely interfered with the competitive process". 

Quotes 

Greg Whyte, a partner at Piper Alderman, said: 

“This class action is of major importance to publishers, who have suffered as a result of Google’s practices in the ad tech monopoly that it has secured. As is the case in several other 2. jurisdictions around the world, Google will be required to respond to and defend its monopolistic practices which significantly affect competition in the Australian publishing market”. 

Charlie Morris, Chief Investment Officer at Woodsford said: “This class action follows numerous other class actions against Google in other jurisdictions regarding its infringement of competition laws in relation to AdTech. This action aims to hold Google to account for its misuse of market power and compensate website and app publishers for the consequences of Google’s misconduct. Working closely with economists, we have determined that Australian website and app publishers have been earning significantly less revenue and profits from advertising than they should have. We aim to right this wrong.” 

Class Action representation 

The team prosecuting the ad tech class action comprises: 

  • Law firm: Piper Alderman
  • Funder: Woodsford
  • Counsel team: Nicholas de Young KC, Simon Snow and Nicholas Walter