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Commercial

PIB Group expands its MGA division acquiring market-leading specialist litigation insurance MGA Litica

By Harry Moran |

PIB Group Ltd (‘PIB’ or ‘the Group’), the specialist insurance intermediary group, has acquired market-leading litigation insurance provider Litica. 

Managing General Agent (MGA) Litica specialises in a range of insurance-backed solutions for private and corporate clients involved in litigation or arbitration.

Litica was founded in London in 2019 by co-founding directors Stephen Bolster and Steve Ruffle. It has since expanded its operations to Australia, the United States and Germany. The company has a large panel of insurer backers and is a Lloyd’s coverholder. This access to significant insurance capacity enables them to underwrite a range of complex and high value litigation types. 

Charles Burgess, CEO of Underwriting and Schemes at PIB Group, said: “Having Litica join PIB Group marks an exciting milestone, enabling our MGA division to enter the next phase of growth. Liticia’s operations in Australia and the United States provide our MGA business with a strong foothold in these markets, bringing a wealth of opportunity to the wider Group. We’re excited to have Stephen, Steve and their team join us – their experience will be invaluable.”

Stephen Bolster, co-founding director at Litica, said: “At Litica we have spent the last six years establishing ourselves as the UK’s leading provider of specialist litigation insurance, and we are beginning to replicate that success across international markets. Joining an entrepreneurial and ambitious Group provides us with the capabilities we need to continue growing, while still providing our clients with the professional and diligent services we are known for.”

Steve Ruffle, co-founding director at Litica, said: “Being part of an ambitious, bold and fast-paced international Group will ensure we are positioned well to make the most of the opportunities the market continues to present. We are looking forward to leveraging PIB Group’s wide range of products, solutions and expertise in insurance and risk management.”

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Harry Moran

Harry Moran

Commercial

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Case Developments Commercial

Funding of Investor-State Disputes Attracts Criticism

By Harry Moran and 4 others |

Whilst litigation funders can provide the financial resources for individuals and companies to gain access to justice, the benefits that this service provides do not shield the industry from criticism; especially where lawsuits can be portrayed as putting business interests over social or environmental progress.

An in-depth article in The Guardian covers the growing trend of third-party funding supporting investor-state disputes focused on environmental regulations. In these cases funders are often backing companies who have seen their profits harmed by ‘green laws’, with a large potential upside for the funder due to the sizeable awards in play and the diminished risk of counterclaims being brought by governments.

Analysing the publicly available data from over 1,400 of these cases brought against nation states, The Guardian’s investigation details more than $120 billion in awards through claims in investor-state dispute settlement (ISDS) courts. As the article notes, this figure may be a severe underestimation of the true total, as only 34% of cases where a settlement or award was made had disclosed the financial value of the award.  Similarly, whilst the involvement of third-party funders is not always disclosed, The Guardian found at least 75 ISDS cases where such a party was involved, with more than half of those backed by investors in the UK, US or Canada.

This trend has been the target of some criticism from lawyers and arbitrators involved in these disputes, with Muthucumaraswamy Sornarajah noting that it is often “developing countries” that are the targets of claims backed by investors who see the ISDS system as “big business.” Lisa Sachs, director of the Columbia Center on Sustainable Investment, also argued that the risk mitigation offered by having a funder cover the legal costs is effectively “removing a key deterrent to bringing weak or speculative claims.”

In response to its investigation, Burford Capital was the only funder who agreed to speak with The Guardian. The funder rebuffed the idea of supporting frivolous claims, pointing out that “legal finance provides a vetting function and weeds out meritless cases: we only get paid when our clients win their cases”. Burford’s CEO, Christopher Bogart, questioned whether these kinds of cases were unique, saying that he does not think “ISDS is any more high potential or lucrative than lots of other areas of litigation.”

Commercial Deals

Nera Capital Reaches $100m Milestone for Investor Returns

By Harry Moran and 4 others |

For any litigation funder, success is measured in favourable outcomes for the cases they support, as well as in their ability to deliver on the returns for investors who provide the foundational capital needed for these businesses.

An article on Insider Media highlights a new landmark for Nera Capital, as the litigation funder announces that it has now exceeded $100 million in repayments to its investors. This latest milestone comes off the back of a strong run of case investments, with the funder spotlighting its backing of a major hernia mesh claim in the United States where Nera supported claimants who suffered complications from defective mesh implants.

In addition to the successful mesh claim, Nera has also built a track record of investing in commercial cartel cases and personal injury claims, with two European anti-trust claims that have settlement values of over $20 billion. Building upon these investments, Nera is anticipating the launch of a new $75 million fund that will support the funder’s ambitious growth plans.

Aisling Byrne, director and co-founder of Nera Capital, said that “surpassing $100 million in repayments is a testament to the firm’s disciplined investment strategy and commitment to delivering on promises.” Speaking to the philosophy behind the company’s investment strategy, Byrne stated: “We are not just funding litigation; we are helping people achieve justice while ensuring our investors benefit from well-structured, high-value opportunities.”

Read more about Nera Capital in LFJ’s Community Spotlight with Aisling Byrne.

Announcements Commercial

ILFA and ALF publish summary response to Civil Justice Council review

By Harry Moran and 4 others |

ILFA and the Association of Litigation Funders of England and Wales have submitted a joint response to the Civil Justice Council’s consultation on litigation funding.

Legal experts, representative bodies and law firms have also made their submissions public. While there are - of course - a range of views about the sector and possible reforms, there are two common threads: 

  • Firstly, all contributors are in unanimous agreement that litigation funding is a critical tool in the UK for enabling access to justice, from Sir Alan Bates and the subpostmasters in the Post Office scandal to equal pay for supermarket workers.
  • Secondly, the uncertainty facing the sector because of the 2023 PACCAR judgment is jeapordising that access to justice and must be urgently reversed. In their submission to the CJC, leading Oxford University civil justice academics said “there is a compelling and urgent need to reverse the effects”. The City of London Law Society said “this is an ongoing unsatisfactory state of affairs”. The Class Representatives Network said the current state of uncertainty is “untenable”. The Forum of Complex Injury Solicitors wants to “reinstate the position of prePACCAR”. It goes on. 

ILFA and ALF joint response 

ILFA and ALF’s submission is based on the views of its members who are among the largest and most experienced funders in England and Wales. 

In summary, the views of ILFA and ALF are as follows: 

  1. Litigation funding plays a critical role in enabling access to justice. For many claimants, including consumers and SMEs, it provides the only route to redress. For others, litigation funding allows businesses to use their capital to grow their core business and create jobs instead of tying up budgets for litigation costs.
  2. Litigation funding has worked well in England and Wales. As well as providing access to justice, litigation funding promotes equality of arms between parties. Funding also brings other benefits such as promoting the public interest through exposing corporate wrongdoing, driving good litigation behaviour and supporting the development of English jurisprudence. Commonly stated concerns about litigation funding supporting frivolous or vexatious claims are not supported by evidence; in fact, the evidence is that funders are highly selective in the cases they fund, providing a reality check which benefits parties beyond the funded client and helping direct resources towards meritorious claims.
  3. As well as enabling access to justice, litigation funding has developed into a crucial pillar supporting the UK’s leading global role as a legal and financial centre. To ensure this continues, urgent legislation is needed to address the uncertainty caused by the PACCAR judgment.
  4. In the absence of evidence of harm that needs to be addressed and given the detriment that would be caused by additional regulatory burdens, the current self-regulatory approach strikes the right balance. It will continue to evolve by, for example, potential updates to the ALF Code of Conduct in consultation with the CJC.
  5. Funders’ returns should not be capped. The existing, competitive funding market is best placed to assess and price the many risks involved and the practical effect of an (inflexible) cap would be to make fewer meritorious cases fundable and have a negative effect on access to justice.
  6. Litigation funding helps to control costs (via funder scrutiny and oversight of budgets) but costs are subject to many factors including the defendant’s conduct of the case. Arbitrators have discretion to order that the cost of litigation funding should be recoverable as a cost in proceedings. The courts should have the same discretion.
  7. Recoverability of adverse costs and security for costs applications increase the costs of litigation, costs that are ultimately borne by successful claimants. These costs restrict access to justice and diminish claimants’ net recovery. Permitting flexibility in how adverse cost risk is addressed is beneficial for access to justice.
  8. Funders have less control over proceedings than other third parties that provide economic support for litigation. Concerns relating to control by litigation funders are unfounded.
  9. Beyond representative proceedings in the CAT, there is no need to incur the cost, delay and uncertainty of having the court approve settlements of funded proceedings.
  10. Claimants in funded cases are always represented by lawyers, who owe duties to their client alone, which provides protection for claimants when entering a litigation funding arrangement and throughout their litigation. Measures to address conflicts are adequately reflected in best practices and professional regulation.

About the International Legal Finance Association

The International Legal Finance Association (ILFA) represents the global commercial legal finance community, and its mission is to engage, educate and influence legislative, regulatory and judicial landscapes as the voice of the commercial legal finance industry. It is the only global association of commercial legal finance companies and is an independent, non-profit trade association promoting the highest standards of operation and service for the commercial legal finance sector. ILFA has local chapter representation around the world. 

For more information, visit www.ilfa.com and find us on LinkedIn and X @ILFA_Official.