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The Litigation Finance 2017 Year-in-Review

The Litigation Finance 2017 Year-in-Review

Evolution. Maturity. Growth spurt. Those are the terms one might use to describe Litigation Finance in 2017.  The industry saw a flurry of activity that would make any beehive jealous: Markets opened, funds raised, legal precedents established, and a host of new entrants already looking to disrupt the lit fin industry, which itself is in the midst of disrupting one of the oldest institutions on the planet. So let’s take a look back at how Litigation Finance ‘took off the training wheels,’ and properly came of age in 2017… First, let’s state the obvious: As litigation costs have soared globally, more and more companies and law firms are turning to third party funding to finance their legal claims. While legal questions remain over issues concerning disclosure, enforceability, privilege, and costs and security for costs, generally courts have held a favorable view towards third party funding, with rare exceptions. Globally, litigation finance is on the march. New markets opened in Singapore and Hong Kong, international arbitration is cementing its presence in Brazil, and funders are opening shop in countries all around the world, from New Zealand to Canada and everywhere in between. In terms of the funding specifics, Burford Capital – the world’s largest litigation funder – conducted a 2017 Litigation Finance Survey. Their findings show the most requested types of financing by practice area:
  1. IP/Patents
  2. Contract
  3. Business Torts
  4. Asset Recovery
  5. International Arbitration
  6. Monetization Of Pending Legal Receivables
  7. Bankruptcy/Insolvency
  8. Antitrust/Competition
  9. Securities
  10. Fiduciary Duty
  11. Fraud
  12. Tax Disputes
Notably, over the last 12 months, among AmLaw 100 ranked firms, 74 made at least one request for financing from Burford or represent a client who did. Burford also tops the list in terms of fundraises, having launched a $500MM investment vehicle in 2017. Not to be outdone, Chicago-based Longford Capital also raised $500MM, the largest such fund in North America. IMF Bentham raised an aggregate $350MM over 3 fundraises – all taking place in 2017. And other firms such as LexShares and Pravati Capital both raised investment vehicles. New entrants, both large and small, also made a splash in 2017. Nick Rowles-Davies launched his long-awaited fund, Chancery Capital, and boutique shops like TownCenter Partners expanded their presence nationwide. Meanwhile, 2017 also saw the expansion and launch of potential industry disruptors, like CrowdJustice (which expanded from the UK into the US), Facebook Personal Fundraising (which launched this year and has the potential to disrupt consumer legal funding), and of course, Legalist, which has been making highly-publicized moves to attract attention and gain market share. Peter Thiel – the ‘Godfather of Litigation Finance(I’m trying to coin that… if it catches on, you heard it here first!) – invested in the Silicon Valley-based startup, which aims to disrupt the lit fin industry by using algorithms instead of lawyers. Think about that: Litigation Finance is disrupting the world’s legal system, and now a startup is trying to disrupt the disruptor! But wait – I’ve saved the best for last! 2017 is also the year that the FIRST AND ONLY dedicated news source to the litigation finance industry opened its doors. Any idea who I’m talking about…? NO??? Well here’s a nifty article that might help jog your memory… All said, 2017 was a turning point. This is the year that lit fin finally went mainstream. Everyone from in-house counsel to private practice litigators to Wall Street investors to lawmakers around the world are perking up and taking notice. We’re excited for what 2018 has in store, and eagerly anticipating the industry’s inevitable expansion both in the United States and globally. Here’s to a memorable 2017, and to even bigger news stories on the horizon… Happy 2018 everyone!!

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Nera Capital Secures £50M Asset Mandate

By John Freund |

Nera Capital has strengthened its litigation finance platform with the onboarding of a new South America-based funding partner committing £50 million across litigation finance and legal assets. The mandate not only expands Nera’s available capital base but also sees the firm formally appointed as asset manager for the new funds, reinforcing its growing role as both originator and portfolio steward within the UK litigation market.

In a press release, Nera Capital announced that the £50 million commitment will be deployed across a range of UK-based claims, with the firm responsible for underwriting, structuring, capital deployment, and ongoing portfolio management. The capital will be allocated in line with Nera’s established investment criteria and risk management framework, targeting carefully selected legal assets. The funding partner, described as having an “extensive track record” in high-yielding special situations investments uncorrelated to traditional asset classes, brings prior experience in litigation finance across South America.

Robin Grant, CFO at Nera Capital, emphasized that the partnership aligns with the firm’s disciplined approach to litigation finance and enhances its ability to deliver attractive, risk-adjusted returns to investors. Aisling Byrne, Director at Nera Capital, highlighted the funder’s blend of financial and legal expertise, noting that the asset manager appointment reflects international confidence in Nera’s ability to identify viable claims and manage them through to resolution.

Established in 2011 and headquartered in Dublin, with offices in Manchester and Holland, Nera Capital provides law firm lending across consumer and commercial claim portfolios and is a member of the European Litigation Funders Association.

Longford Capital Doubles Down to Support American Innovation

By John Freund |

Longford Capital Management, LP today announced that it has launched the Longford Capital American Innovation Initiative to help American inventors protect their legal rights, access the U.S. legal system, and advance American innovation.

America is the greatest country in the world and Americans are achieving advancements in every facet of our lives, including healthcare, artificial intelligence, clean energy, technology, aerospace, cybersecurity, transportation, wireless communications, and many others. Intellectual property is critical to American exceptionalism and national security. American inventors are systematically the victims of intellectual property theft at the hands of foreign and domestic bad actors. Well-financed multi-national corporations steal the innovations of small and medium size American companies leaving them will little options to protect their legal rights in the expensive U.S. legal system. For more than a decade, Longford has been supporting American inventors, investing approximately $500 million to support nearly 100 intellectual property owners trying to defend their assets. These efforts have resulted in recoveries of more than $1.5 billion from patent infringers.

Take, for example, Malcolm Beyer, Jr., a graduate of the United States Naval Academy, retired Captain in the U.S. Marines, and small business owner. His company developed a communication system that increases safety and operational effectiveness for the U.S. military, law enforcement, and first responders. When his patented technology was infringed by foreign companies, he didn’t have the money to defend his legal rights in court. He turned to Longford Capital. Longford provided millions of dollars to pay his legal fees, which allowed Mr. Beyer to successfully defend his legal rights and protect his innovation. Without access to litigation finance, Malcolm Beyer’s company would not have survived.

Today, we are ramping up our efforts to support our country, American inventors, small and medium size businesses, and the advancement of American exceptionalism. The ability to protect innovation through the patent system and the U.S. legal system is essential to attract investment and encourage the best and brightest Americans to dedicate their careers to improving our lives. Longford’s funding empowers American innovation and makes America stronger. Members of Longford’s legal team are perennially recognized as leading IP strategists with an established record of developing and implementing world-class IP value creation programs for American companies.

About Longford Capital

Longford Capital is a leading private investment company that provides capital to leading law firms, public and private companies, research universities, government agencies, and other entities involved in large-scale, commercial legal disputes. Longford was one of the first litigation funds in the United States and is among the world’s largest litigation finance companies with more than $1.2 billion in assets under management. Typically, Longford funds attorneys’ fees and other costs necessary to pursue meritorious legal claims in return for a share of a favorable settlement or award. The firm manages a diversified portfolio, and considers investments in subject matter areas where it has developed considerable expertise, including, business-to-business contract claims, antitrust and trade regulation claims, intellectual property claims (including patent, trademark, copyright, and trade secret), fiduciary duty claims, fraud claims, claims in bankruptcy and liquidation, domestic and international arbitrations, claim monetization, insurance matters, and a variety of others.

Legal-Bay Expands Pre-Settlement Funding Services

By John Freund |

Legal-Bay announced an expansion of its legal funding services, aiming to offer clients more flexible options for pre-settlement funding. The move reflects rising demand from plaintiffs who need interim cash while cases progress and highlights the competitive dynamics in consumer legal funding.

According to the company, the initiative is intended to broaden availability of non-recourse advances and to streamline decisioning so applicants can access funds more predictably during litigation. Although the funder did not disclose detailed terms, the emphasis on flexibility suggests adjustments to how advances are sized and timed relative to case milestones, as well as potential enhancements to intake and support. For claimants, the changes could translate into more tailored funding paths during a period of financial strain.

A press release in PR Newswire states that Legal-Bay is expanding its legal funding services to provide clients with more flexible options for pre-settlement funding, signaling a renewed focus on access and responsiveness. The release characterizes the update as a client-centric step and reiterates the company’s commitment to supporting plaintiffs seeking bridge financing while their matters are pending. It does not enumerate product features, timelines or pricing, but it frames the initiative as an effort to meet a wider range of circumstances and case timelines.

For the litigation finance industry, expansions like this reinforce steady demand among cash-constrained plaintiffs and continued product iteration by consumer funders. If flexibility becomes a wider theme, expect tighter competition on approval speed, disclosures and service quality, alongside ongoing attention to compliance in states evaluating consumer legal funding rules.