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Litigation Finance and China’s Belt and Road Initiative

March 1, 2018

Litigation Finance and China’s Belt and Road Initiative

By Mauritius Nagelmueller China is building a multi-trillion dollar trade and infrastructure network – a new silk road – and the legal world is preparing for the disputes that will inevitably arise. What is the Belt and Road Initiative all about, and what impact will it have on litigation finance? Being one of the largest infrastructure and investment projects in history, the Belt and Road Initiative (BRI)[1] will alter the global economy and define China’s role in it. The initiative covers 65% of the world’s population in more than 68 countries, and 40% of the global GDP. An anticipated overall investment of USD 4-8 trillion will connect China with the rest of Asia, Europe and Africa, through six main geographic corridors and a Maritime Silk Road. China’s position is that BRI will improve the infrastructure along the route, providing a network of highways, railways, ports, energy and development projects for trade and cultural exchange. Chinese state-owned banks, the Asian Infrastructure Investment Bank (formed in 2015, but already encompassing 84 approved member states, and with a capital of USD 100 billion – half of the World Bank’s capital), the Silk Road Fund, and investors from the private sector are providing the necessary financing. About USD 1 trillion has already been invested. It seems likely that BRI, if successful, will shift more economic and political power to China. Major concerns surround the environmental impact of the vast project, uncertainties regarding the exact parameters and how much local economies will actually benefit. Security risks along the Belt remain constant. Some even fear a new Chinese “empire”. It remains to be seen which of these fears are justified, but it is interesting to note that China’s president Xi Jinping, who unveiled BRI in 2013 and made the initiative a central tenet of his foreign policy agenda, will likely remain in power, as the Communist Party of China just announced plans to abolish the two-term limit on the presidency. To predict that legal disputes will arise under BRI is to state the obvious, and the legal community in Asia and beyond is preparing accordingly. Jurisdictions are already competing for recognition as the prime venue for BRI related proceedings. In an effort to provide wide-ranging dispute resolution services, China plans to establish an international commercial court in Xi’an for disputes surrounding the land-based transport corridors, another in Shenzhen for the maritime route, and a central court headquartered in Beijing. All three bodies will provide arbitration and mediation services. China’s neighbors share its expectations regarding dispute resolution. In 2017, Hong Kong and Singapore permitted litigation finance in international arbitration, and the legalization for state court procedures may soon follow. Hong Kong passed its law shortly after a BRI Forum in Beijing, and partly also to strengthen its position as a go-to center for BRI related disputes, particularly for the maritime and construction fields. Arbitration institutions around the world, including the ICC (International Chamber of Commerce), SIAC (Singapore), and HKIAC (Hong Kong), encourage the adoption of their rules in BRI deals, and Malaysia’s KLRCA and Seoul’s KCAB are preparing accordingly. Chinese and Singaporean mediation centers (CCOIC and SIMC) have plans to cooperate for BRI related mediation proceedings, while Hong Kong is developing an online arbitration and mediation tool specialized on the initiative. Chinese officials have even publicly floated the concept of an innovative hybrid method combining aspects of arbitration and mediation, with courts playing a central role as well. Many legislators view litigation finance as a vital component in their jurisdiction’s status as a prime dispute resolution center, and litigation finance firms are aggressively seizing on the new opportunities presented. Select funders have already opened offices in Asia, others will soon follow, or plan to be involved from abroad. Entities who plan to invest along the Belt, including many Chinese companies, will not only face complex regulatory challenges, but also disputes with foreign governments, possibly in multiple jurisdictions. In addition to first-rate legal advice, parties will sometimes require external financing to pursue their claims under BRI. Both investors and law firms will utilize the benefits of litigation finance, and seek tailored financing solutions for their cases arising under BRI related projects. This will include single cases, as well as multiple disputes from investments being bundled into portfolios of claims. BRI will have a significant impact on litigation finance in the coming years, as a host of challenges and new opportunities present themselves. As has occurred previously, litigation finance will support meritorious claims which could not be brought without the assistance of external financing, help businesses and law firms diversify and boost their portfolios without increasing risk, and continue to promote access to justice. Litigation finance will benefit from this unprecedented trade and infrastructure initiative. It has already become part of the legal world, and it will soon be part of BRI. [1] Originally called One Belt and One Road Initiative.   Mauritius Nagelmueller has been involved in the litigation finance industry for more than 10 years.
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Case Developments Commercial

Uber Told £340m Group Claim Must Follow Costs Budgeting Rules

By John Freund |

In a notable ruling, the High Court has directed that a £340 million group action against Uber London Ltd will be subject to costs budgeting, despite the claim’s substantial size. The decision was handed down in the case of White & Ors v Uber London Ltd & Ors, where the total value of the claim far exceeds the £10 million threshold above which costs budgeting is typically not required under the Civil Procedure Rules.

According to Law Gazette, Mrs Justice O’Farrell chose to exercise judicial discretion to apply the budgeting regime. Her decision marks a significant moment for large-scale group litigation in England and Wales, underscoring the court’s growing interest in ensuring proportionality and transparency of legal costs—even in high-value cases.

An article in the Law Society Gazette reports that the ruling means the parties must now submit detailed estimates of incurred and anticipated legal costs, which will be reviewed and approved by the court. This move imposes a degree of cost control typically absent from group claims of this scale and signals a potential shift in how such cases are managed procedurally.

The decision carries important implications for the litigation funding industry. Funders underwriting group claims can no longer assume exemption from cost control measures based on claim size alone. The presence of court-approved cost budgets may impact the funders’ risk analysis and return expectations, potentially reshaping deal terms in high-value group actions. This development could prompt more cautious engagement from funders and a closer examination of litigation strategy in similar collective proceedings moving forward.

Commercial

Will Law Firms Become the Biggest Power Users of AI Voice Agents?

By Kris Altiere |

The following article was contributed by Kris Altiere, US Head of Marketing for Moneypenny.

A new cross-industry study from Moneypenny suggests that while some sectors are treading carefully with AI-powered voice technology, the legal industry is emerging as a surprisingly enthusiastic adopter. In fact, 74% of legal firms surveyed said they are already embracing AI Voice Agents , the highest adoption rate across all industries polled.

This may seem counterintuitive for a profession built on human judgement, nuance and discretion. But the research highlights a growing shift: law firms are leaning on AI not to replace human contact, but to protect it.

Why Legal Is Leaning In: Efficiency Without Eroding Trust

Legal respondents identified labor savings (50%) as the most compelling benefit of AI Voice Agents.  But behind that topline number sits a deeper story:

  • Firms are increasingly flooded with routine enquiries.
  • Clients still expect immediate, professional responses.
  • Staff time is too valuable to spend triaging logistics.

Kris Altiere, US Head of Marketing at Moneypenny, said:
“Some companies and callers are understandably a little nervous about how AI Voice Agents might change the call experience. That’s why it’s so important to design them carefully so interactions feel personal, relevant, and tailored to the specific industry and situation. By taking on the routine parts of a call, an AI agent frees up real people to handle the conversations that are more complex, sensitive, or high-value.”

For the legal sector, that balance is particularly valuable.

A Look At Other Industries

Hospitality stands out as the most reluctant adopter, with only 22% of companies using AI-powered virtual reception for inbound calls and 43% exploring AI Voice Agents.
By contrast, the legal sector’s 74% engagement suggests a profession increasingly comfortable pairing traditional client care with modern efficiency.

The difference stems from call types: whereas hospitality relies heavily on emotional warmth, legal calls hinge on accuracy, confidentiality, and rapid routing areas where well-calibrated AI excels.

What Legal Firms Want Most From AI Voice Agents

The research reveals where legal sees the greatest potential for AI voice technology:

  • Healthcare: faster response times (75%)
  • Hospitality: reducing service costs (67%)
  • Real estate: enhanced call quality and lead qualification (50%)
  • Finance: 24/7 availability (45%), improved caller satisfaction (44%), scalability (43%)

Legal’s top future use case is appointment management (53%).

This aligns neatly with the administrative pain points most firms face,  juggling court dates, consultations and multi-lawyer calendars.

Each industry also had high expectations for AI Voice Agent features, from natural interruption handling to configurable escalation rules.
For legal, data security and compliance topped the list at 63%.

This security-first mindset is unsurprising in a sector where reputation and confidentiality are non-negotiable.

Among legal companies, 42% said that integration with existing IT systems like CRM or helpdesk tools was critical.

This points to a broader shift: law firms increasingly want AI not just as a call handler but as part of the client-intake and workflow ecosystem.

The Bigger Trend: AI to Protect Human Time

Across every industry surveyed, one theme is emerging: companies don’t want AI to replace humans ,they want it to give humans back the time to handle what matters.

For legal teams, this means freeing lawyers and support staff from constant call-handling so they can focus on high-value, sensitive work.

Why This Matters for Law Firms in 2025

The AI adoption race in legal is no longer about novelty; it’s about staying competitive.

Clients expect real-time responses, yet firms are constrained by staffing and increasing administrative load. Well-designed AI Voice Agents offer a way to protect responsiveness without compromising on professionalism or security.

With compliance pressures rising, talent shortages ongoing, and client acquisition becoming more competitive, the research suggests law firms are turning to AI as a strategic solution and not a shortcut.

Moneypenny’s Perspective

Moneypenny, a leader in customer communication solutions, recently launched its new AI Voice Agent following the success of an extensive beta program. The next-generation virtual assistant speaks naturally with callers, giving businesses greater flexibility in how they manage customer conversations.

Commercial Regulatory Issues

LSB Launches Oversight Programme Targeting Litigation Growth

By John Freund |

The Legal Services Board (LSB) has unveiled a new consumer‑protection initiative to address mounting concerns in the UK legal market linked to volume litigation, law‑firm consolidators and unregulated service providers. An article in Legal Futures reports that the regulator cited “clear evidence” of risks to consumers arising from the dramatic growth of volume litigation, pointing in particular to the collapse of firms such as SSB Law.

Legal Futures reports that under the programme, the LSB will explore whether the current regulatory framework adequately protects consumers from harm in mass‑litigation contexts. That includes examining: whether all litigation funding – especially portfolio funding models – should fall under the supervision of the Financial Conduct Authority (FCA); whether co‑regulation arrangements should be established between the FCA and the Solicitors Regulation Authority (SRA); and whether the list of reserved legal activities needs revision to account for the rise of unregulated providers and AI‑enabled legal services.

On the law‑firm side the initiative spotlights the consolidation trend — especially accumulator or “consolidator” firms backed by private equity and acquiring large numbers of clients. The LSB flagged risks around viability, quality of client care and short‑term investor‑driven growth at the expense of compliance and long‑term service stability.

For the litigation‑funding sector, the message is unmistakable: the regulator will be more active in mapping the relationships between funders, law firms and client outcomes. It intends to use its market‑intelligence function to monitor whether misaligned incentives in the funding‑chain may harm consumers, and to obtain data from frontline regulators where necessary.