As the UK litigation finance industry continues to stay in the public spotlight, discussions continue around what any future regulation might entail and whether it would increase requirements around the transparency or disclosure of funding agreements. For now, a recent judgement from the High Court has ruled in favour of the claimants in a high-profile group claim, by denying a request for the disclosure of any funding agreements.An article in The Law Society Gazette highlights a ruling in the High Court of Justice of England and Wales, Kings Bench Division, that dealt with a request for the disclosure of any funding agreements in the ‘Dieselgate’ group claim. The judgement dealt with two sets of applications, with the second being a funding disclosure application from the defendants that sought to compel the claimants and their lawyers, Pogust Goodhead, to provide ‘information as to their funding position’. The request was sought by the defendants as they stated that they ‘are considering making an application under CPR 25.14(2)(b) for security for costs against the Funders.’In their judgement, Mrs Justice Cockerill and Mr Justice Constable, declined ‘to order disclosure of Pogust Goodhead’s funding agreement, but instead consider that it will be appropriate to revisit the issue relatively shortly, to the extent it is pursued.’ They wrote that this could be done after legal budgets were fixed and once the claimants have had the opportunity to secure ATE insurance, meaning that ‘the question of security against Gramercy would be rendered redundant.’The full judgement can be read here.
Lawdragon has released its 100 Global Leaders in Litigation Finance list for 2024, with the fifth edition of its annual guide ‘dedicated to the leaders of this fascinating – and necessary – avenue of the legal profession.’ The list includes 164 senior executives from all over the glove, representing the entire spectrum of those companies involved in litigation finance, including funders, law firms, insurers, investors, and advisors.Of those companies with leaders included on the list, Burford Capital saw the highest number of executives recognised with 17, with Omni Bridgeway close behind at 12 individuals, and Harbour which had eight of its team listed. Looking at the breakdown by jurisdiction across the 165 litigation finance leaders recognised, the US was the most represented country with 73 individuals listed. The UK came in a close second with 55 leaders recognised, and Australia came behind it with 17 executives profiled.As part of it’s 2024 litigation finance leaders list, Lawdragon has also identified those individuals who are listed in its Hall of Fame, which recognises ‘members and other outstanding lawyers who have made a remarkable contribution to the profession.’ Within litigation finance, three individuals are included in the Hall of Fame:
Louis Young, co-founder & CEO, Augusta Ventures
Stuart Grant, co-founder & managing director, Bench Walk Advisors
Andy Lundberg, managing director, Burford Capital
The full list of individuals recognised in 100 Global Leaders in Litigation Finance list can be found here.
One of the latest critiques of the litigation finance industry is that it represents a potential threat to US national security, due to the possibility of foreign governments and entities by funding lawsuits that target American companies and strategic national interests. Whilst there has been scant evidence of this being a tangible issue, a new investigation has revealed that Russian billionaires have been avoiding international sanctions by financing lawsuits in the West.The detailed investigation by Bloomberg Law focuses on the activities of the investment company A1, its parent corporation Alfa Group, and A1’s directors. Following Russia’s invasion of Ukraine in February 2022, Alfa Group has been sanctioned by both the United States and United Kingdom, as were A1’s billionaire directors Petr Aven, Mikhail Fridman, German Khan, and Alexey Kuzmichev. The US also individually sanctioned A1 in September 2023.Bloomberg’s investigation reveals that A1 has financed and been directly involved in the proceedings of bankruptcy lawsuits in both New York and London, having spent approximately $20 million across these cases. The investigation highlights that A1’s sanctioned directors attempted to avoid the reach of their individual sanctions by selling the company to another of its directors, Alexander Fain, for the miniscule sum of $900. In a witness statement for one of the bankruptcy cases, Fain explained that his directors had sold the company because “it became obvious that A1 LLC would no longer be able to operate normally and that there was a risk of default on its obligations to fund the litigation.”Commenting on the investigation, J. Scott Maberry, partner at Sheppard Mullin, described A1’s funding activities as “a big development in that sense because it kind of puts the US judicial system on par with the New York Stock Exchange and the US dollar as things that we need to start thinking carefully about how to deny access to.” Matt Webb, senior vice president at the Chamber of Commerce’s Institute for Legal Reform, argued that “A1’s actions are an example of the problems that arise when foreign entities can finance litigation.”The full details of A1’s involvement in these cases, as well as the roles played by sanctioned individuals can be read in Bloomberg Law’s article.
Westfleet Advisors has published its fifth annual Litigation Finance Market Report, providing a data-driven overview of the commercial funding industry in the United States from 1 July 2022 to 30 June 2023. Westfleet summarises its findings as ‘indicative of an industry in a state of flux, with some notable players exiting the industry, numerous professionals making lateral moves, and capital commitments to new deals contracting by nearly 14%.’ With regard to the decreasing volume of new capital commitments, Westfleet attributes this trend to the difficult global economic conditions that are affecting all industries, rather than a decline in demand for litigation funding.Despite this contraction on new capital, Westfleet still found that ‘many funders thrived both in terms of new capital raised, capital committed to new deals, growth in their headcount, and profitability.’ Westfleet’s report suggests that the data from 2023 indicates that the market is still favourable for those established funders ‘with strong track records and a proven ability to consistently attract new capital.’Key highlights from the 2023 report include:
$15.2B in assets under management for 2023, representing a small increase from $15.1B in 2022
$2.7B in new commitments to deals in 2023, down from £3.2B in 2022
The average deal size declined from $8.6M in 2022 to $7.8M in 2023
This was driven by a reduction in the average size of portfolio deals from $10.5M in 2022 to $9.9M in 2023
In contrast the average size of single-matter transactions increased from $4.3M in 2022 to $4.8M in 2023
The share of new capital dedicated to claim monetization reached 21% in 2023, continuing the upward trend from 14% in 2022 and 8% in 2021
To read the full report from Westfleet Advisors, click here.
A new piece of analysis by Nick Rowles-Davies, founder and CEO of Lexolent, sheds light on the current state of the litigation funding market post-PACCAR.
As is customary of Rowles-Davies, his analysis pulls no punches. Writing on LinkedIn, he opines that industry stakeholders have varying perspectives on the Litigation Funding Agreements Bill. Despite the Supreme Court's judgement and the industry's claims of adaptability and compliance, not all funders operate transparently, according to Rowles-Davies. The speed of the proposed new legislation and the lobbying efforts to expedite its implementation have also raised concerns.
The litigation funding industry is diverse, with different funders operating in different ways. There is a growing call for regulation, particularly as 90% of the London Solicitors Litigation Association believe it's time for the industry to be regulated. The PACCAR decision has created uncertainty and led to attempts to reopen concluded deals. As a result, a thorough review by the Civil Justice Council is needed.
The proposed 'Litigation Funding Agreements (Enforceability) Bill' aims to restore the pre-PACCAR regime, allowing individuals and small businesses to fund large claims against corporations. While many eyebrows have certainly been raised, the litigation funding industry isn't going anywhere any time soon, even if future regulation is on the horizon.
Michael Perich is a Senior Vice President and Head of Litigation Insurance in the Transaction Liability Practice at Lockton. Prior to joining Lockton, Michael spent much of his career working at the world’s largest litigation finance company, Burford Capital, as well as a Chambers-ranked litigation finance broker, Westfleet Advisors. In these roles, he helped a wide range of clients—including multinational corporations and AmLaw100 firms—use innovative litigation finance structure to achieve their financial objectives.
Michael is also a former litigator, having represented clients on contingency fee, alternative fee, and hourly fee arrangements. He now uses those skillsets to help his clients structure bespoke insurance policies designed to help his clients achieve their financial objectives.
Michael has been recognized by LawDragon as one of the top 100 Global Leaders in litigation finance and is listed in the IAM Strategy 300, a guide listing individuals who innovatively create and action strategies which realize and amplify the worth of IP portfolios.
Company Name and Description: Lockton is the largest privately held global insurance brokerage that provides outstanding risk mitigation and claims management through the application of modern insurance strategies. With expertise in risk management, property and casualty, employee benefits/people solutions, professional and private risk, we help our clients protect what matters to them most: people, property, and their bottom line.
Area of Focus: Litigation Funding and Contingent Liability Insurance products
Member Quote: Having ventured into the field of litigation finance almost ten years ago, I remain repeatedly astounded and impressed by the growth and increased sophistication the market has exhibited in recent years. The progress has been truly remarkable, and I feel grateful to be involved in this dynamic industry.
The Post Office scandal, and its rise to the forefront of public attention in the UK, has been repeatedly cited as a prime example of the crucial role that litigation finance plays in securing access to justice for victims. However, arguments over the legal costs and funder’s returns in this case continue to be aired, as a lawyer for one of the subpostmasters is calling on regulators to get involved.Reporting by The Telegraph, and shared by Yahoo Finance, reveals that one of the subpostmasters in the Post Office Horizon litigation is calling for the Solicitors Regulation Authority (SRA) to investigate the legal fees paid out from the £58 million settlement fund. The subpostmaster’s lawyer, Jim Diamond, has written to the SRA after he has repeatedly asked for additional information from Freeths, the firm which represented the victims in the case, about how the settlement was divided between the law firm, litigation funder and the claimants.Mr Diamond explained in his letter that he has twice asked Freeths to provide the information along with supporting documents, but the law firm has rebuffed his outreach and said that as the litigation is now closed, they are not open to engaging on the subject. Diamond is asking the SRA to clarify whether the law firm is obligated to comply with his request and provide the documents to their former client, the postmaster.Mr Diamond also used the letter to criticise the recent article written by Neil Purslow, founder and chief investment officer of Therium Capital Management. In the guest article published in The Times, Purslow had refuted suggestions that Therium’s remuneration accounted for 80% of the settlement fund. In his letter to the SRA, Diamond argued that Therium’s founder should not have discussed the breakdown of costs in public, as these details are ‘private and confidential.’At the recent Brown Rudnick European Litigation Funding Conference, Mr Purslow once again denied the claims about an ‘80% payout’ to Therium and offered a detailed explanation of the funder’s involvement in the case.
As LFJ reported last month, the ongoing saga of Burford Capital and Sysco’s antitrust lawsuits continued, as both parties appealed a Minnesota judge’s denial of a joint request for the substitution of plaintiff in the antitrust case. As we wait to see the outcome of that appeal, Burford and its subsidiary, Carina Ventures, have secured a favourable ruling in another antitrust case in the United States District Court for The Northern District of Illinois.Reporting by Reuters provides the latest update on the Sysco antitrust cases funded by Burford Capital, as U.S. District Judge Thomas M. Durkin granted Sysco’s request to assign the ‘Broiler Chicken Antitrust Litigation’ to Burford’s affiliate company, Carina Ventures. The Illinois judge rejected each of the arguments brought by the defendants who objected to the substitution, stating: ‘An invalid assignment might have been a reason to deny the motion. But the Court has rejected those arguments.’Explaining his decision to grant the substitution of plaintiff in the case, Judge Durkin said that “despite defendants protestations to the contrary, the assignment does not appear to be a very unusual circumstance either.” He further reasoned that “such assignments are a fact of modern litigation”, and therefore he had no reason to “interfere with sophisticated parties’ business decisions."The favourable ruling in this poultry case in Illinois will be welcomed by Burford Capital and Sysco, as their efforts to similarly reassign the pork antitrust claim in Minnesota were denied last month. Whilst the initial denial of their request for substitution of plaintiff in that case was disappointing, Burford will no doubt see Judge Durkin’s ruling as a positive factor in their appeal of the Minnesota court order.
As the litigation funding industry continues to evolve, Louisa Klouda, CEO of Fenchurch Legal shares insights into the sector and Fenchurch Legal’s approach and practices. Below is our LFJ Conversation with Louisa Klouda:
What drew you to the world of litigation funding?
My entry into the world of litigation funding wasn't a direct one, but rather a spark of curiosity during my previous role in corporate finance and the asset-backed lending world. I came across the concept of litigation funding and found myself instantly drawn to its unique characteristics. I discovered a market dominated by large funders focusing on large cases like class actions. However, I noticed a significant gap: a lack of support for smaller claims, particularly in areas like housing disrepair and the challenges the law firms faced in accessing funding for these meritorious claims. Recognizing the gap in the small-claims market, I saw an opportunity to create Fenchurch Legal in 2020. The aim of the business was twofold: to facilitate access to justice for smaller claims and to provide an avenue for investors looking for alternative investment opportunities.
Can you provide an overview of small ticket litigation funding and its significance in the UK legal landscape?
Small ticket litigation funding plays a vital role in the UK legal landscape, offering an alternative approach to financing legal claims. In essence, it involves providing funding to law firms for smaller value cases across various areas like personal injury, housing disrepair, and financial mis-selling, unlike large-ticket funding which targets high-stakes class actions. Small-ticket funders like Fenchurch Legal focus on quantity, funding a high volume of smaller cases. These case types have clear legal precedent, and are protocol-based and process-driven consumer claims, with high success potential. This subset of litigation funding addresses a gap in the legal financing ecosystem created by rising legal costs and resource-intensive cases. Small ticket litigation funding ensures that even modest claims, like housing disrepair receive the backing necessary to navigate the legal process, ultimately facilitating access to justice and contributing to a more balanced and inclusive legal landscape.
How does this subset of litigation funding attract investors?
The appeal of small-ticket litigation funding to investors is multifaceted, driven by three key factors - flexible entry points, portfolio diversification, and unique security features. Firstly, it provides investors with lower entry points compared to larger funders. This is particularly attractive to those moving away from traditional markets and seeking a more balanced investment approach with steady returns. The accessibility of smaller minimum investment amounts aligns with the preferences of investors aiming for a diversified and resilient portfolio. Small-ticket funders focus on quantity, funding a high volume of smaller cases. This diversification approach effectively spreads the risk across various law firms, multiple cases and case types, reducing the reliance on the success of a single case. Investors are drawn to the stability and risk mitigation inherent in this investment strategy. Moreover, investors like the insurance-backed nature of this investment. All cases are supported by an After the Event (ATE) insurance policy, covering all costs and disbursements if the case is unsuccessful. Additionally, upfront interest is charged, debentures are in place and there is an assignment over the case proceeds.
How has Fenchurch emerged and established itself in this market, and what key strategies contributed to its growth?
Our key strategy is to have a niche focus on smaller claims within specific case types where we have a deep understanding and only partnering with fully vetted law firms. Recognizing growing interest in litigation funding as an alternative asset class, Fenchurch strategically lowered investment entry barriers making it a more accessible investment solution. This has enabled us to broaden our investor base, enabling us to raise more capital and support a wider range of law firms seeking funding.
How have you seen the landscape of small ticket litigation funding evolve, and what trends do you anticipate for the future?
There's a noticeable shift towards recognising the significance of smaller-scale claims in the funding market. I anticipate the market to continue its expansion into new case types beyond traditional areas but with that will come changes in the regulatory landscape, potentially impacting market dynamics and requiring adaptation from funders. As a funder specialising in small ticket claims, especially those funded at volume, staying ahead of regulatory changes is important. We remain cautious about specific case types, recognising that shifts in litigation trends could render a case type unviable, as witnessed in the Road Traffic Cases (RTA) cases when fixed costs were brought in. Funders must develop a broad network of contacts to stay informed about evolving market conditions. Another trend I see growing is wider tech adoption within the industry. Technology is playing a pivotal role in streamlining processes, enhancing risk assessment and driving efficiency and scalability. Recognizing the limitations of off-the-shelf solutions, we developed our own loan management software, providing a bespoke platform for managing loan repayments, monitoring, and onboarding. Continued tech integration is needed to enable automation, boost efficiency, enhance risk assessment capabilities, and improve investor reporting. I also see increased awareness and interest from investors. I think small-ticket litigation funding will become increasingly more attractive as investors become more familiar with the potential benefits and opportunities, resulting in a rise in investment inflows. Lastly, the focus on Environmental, Social, and Governance (ESG) considerations is likely to gain prominence, influencing investment decisions and funder strategies. The growing recognition of the value and impact of small-ticket litigation funding aligns with ESG requirements.
What sets Fenchurch Legal apart from other funders? What are your unique value propositions?
Our core strength lies in our deep understanding of the small-ticket claims landscape. We have developed a rigorous and data-driven selection process tailored to this specific segment, allowing us to identify top-tier law firms and high-potential case types with lower individual risk profiles. Through discussions, we've learned that law firms often face challenges with other funders, including issues like complex drawdown procedures, undisclosed fees, and the non-funding of crucial costs like WIP capital or case acquisition expenses. Recognizing these pain points, we've developed an offering specifically designed to avoid these issues. As mentioned before having access to our own proprietary software has been a game-changer. It has significantly enhanced our whole business operations, driving efficiency and enabling us to scale. This technological edge not only sets us apart but also positions us as an innovative and forward-thinking player in the industry. Additionally, our team is a vital component of our unique value proposition. Made up of experienced professionals who understand the industry, our team ensures we look thoroughly at both legal merit and financial viability. This dual expertise ensures that every funding decision is based on a thorough understanding of the legal intricacies and financial soundness of each case.
Could you elaborate on your approach to case selection and investment criteria?
Our selection process is multi-layered, considering both legal merit and financial viability. In the initial stages, we conduct an in-depth evaluation of case strength, law firm expertise, financial strength and claim history, while also examining the specific legal and procedural landscape surrounding each claim. After completing the underwriting process, we grant each firm a facility limit. They can regularly draw down against this limit, as long as they adhere to the terms of the agreement, including providing a list of claims for auditing and granting us access to their systems. We also employ robust financial modelling and stress testing to evaluate potential returns and manage risk effectively. This approach ensures we invest in case types with strong success potential and manageable risk profiles. So far, we’ve funded various case types with strong merits, including Plevin, Motor Finance Mis-selling (PCP), Tenancy Deposit Schemes, and Housing Disrepair claims. Our compliance criteria for each case type involve thorough vetting, examining details such as case referrals, fee earners, and the experience of law firms. This process enables us to partner with trusted law firms, further mitigating risks associated with our investments. Importantly, Fenchurch Legal only provides funding for cases where After the Event (ATE) insurance has already been obtained. This insurance covers costs and disbursements in the event of an unsuccessful claim. By advancing the premium directly to the ATE Insurer, we ensure that each policy is live at the time of funding, adding an extra layer of security to our investment strategy. This unique security feature enhances the attractiveness of funding ATE claims, aligning with our commitment to minimising associated risks.
The recent PACCAR ruling in the UK has sparked discussions about the future of litigation funding. What are your thoughts on its implications and potential impact on the industry?
The recent PACCAR ruling didn’t impact Fenchurch as our small ticket business model is focused on charging a fixed return per case, regardless of the outcome and not a percentage of damages recovered. However, whilst the ruling presents certain challenges, I believe it ultimately presents an opportunity for the industry to strengthen its practices and regulations.
Could you share your vision for Fenchurch Legal's future growth and expansion plans?
We plan to maintain our focus on small-ticket litigation funding, leveraging our experience, growing our loan book, and onboarding new borrowers. As the business grows, we plan to deploy more capital aiming to reach a loan book value of £75 million within the next two years. We will also recruit key roles to bolster our team.
Lastly, for investors considering small ticket litigation funding, what key factors should they take into account, and how can Fenchurch Legal add value to their investment strategies?
For investors contemplating small ticket litigation funding, several key factors should be carefully considered to make informed and strategic decisions. Firstly, understand the specific criteria and due diligence processes the litigation funder uses and pay attention to their track record in managing and funding small ticket claims. Risk management is vital and investors should seek funders with robust strategies in place. This includes an assessment of how the funder mitigates risks associated with smaller claims and adapts to changing circumstances. In the case of Fenchurch Legal, our approach to small-ticket litigation funding is grounded in a commitment to comprehensive due diligence, case assessment, and risk management. We have created an offering suitable for investors seeking diversification, lower risk profiles, access to a broader market, and lower entry points.
A Manchester firm has signed a groundbreaking €25 million deal to support a pioneering Spanish legal tech company, renowned for its expertise in handling claims related to cartel price fixing.
In a bid to increase access to justice across Europe, IQuote Limited will provide financial backing to Málaga based Cartel.es as it looks to expand across the continent. The Spanish company, which is the trading name of LegalTech Ventures S.L, was founded to tackle the vehicle cartel price-fixing scandal, which implicated 23 vehicle manufacturers from 2006 - 2013.
For two decades, Spain has seen a rise in these cartels involving companies in the same sector covertly fixing prices, sharing territories and customers, and exchanging sensitive commercial data.
The scandal, brought to light by the National Markets and Competition Commission (CNMC) in 2015, is thought to impact about 9.7 million consumers in Spain. This latest agreement to supply a funding facility of up to €25 million, is aimed to support Cartel.es in its expansion across Europe.
Craig Cornick, IQuote’s CEO and founder, said the investment is a strategic move to help more people across Spain obtain the justice they deserve. “Cartel.es is doing a very important job for the people affected by these corporate cartels and we couldn’t be prouder to be supporting the firm’s mission. The investment will not only provide financial backing to the company but also make justice a tangible reality for those in Spain and beyond.”
Cartel.es has made significant investments in proprietary technology allowing it to assess and quantify each claimant before court proceedings, facilitating faster resolutions. Co-founder and Chief Investment Officer, Adam Peake, said: “We are very proud of the work that we do. These types of claims are not easy to approach so we are very excited to be partnering with IQuote, which has such a track record when it comes to complex legal matters.
“We’ve seen tremendous success so far and we’re looking forward to IQuote’s support and expertise in making lasting contributions to the European legal landscape, bringing justice closer to more people.”
Founded in 2016, IQuote Limited, specialises in legal asset and opex capital loans, with a primary focus on legal asset investing. The firm is constantly pushing for inventive solutions and investment opportunities to firms in the legal, technology and customer service sectors.
Mr Cornick added: “It is very important for us to champion businesses that put in great effort to help people access justice, it’s the core of what we do. With this investment and future expansion into Europe we are committed to bridging the gap between individuals and their right to legal resource. We’re hoping to keep growing the company and continue our mission to break down barriers to justice across the globe.”
Earlier this month, the UK government announced that it would introduce legislation to protect litigation funding by reversing the impact of the Supreme Court’s decision in PACCAR. Whilst it was uncertain at the time of the announcement how quickly the government would move forward with these plans, we have now seen that no time has been wasted to introduce simple legislation to Parliament.Earlier this week, the Litigation Funding Agreements (Enforceability) Bill 2024 was introduced in the House of Lords, delivering on the government’s promise to roll out new legislation to reverse the effects of the Supreme Court’s PACCAR ruling. HL Bill 56, ‘a Bill to amend section 58AA of the Courts and Legal Services Act 1990 to make provision about the enforceability of litigation funding agreements’, was introduced by Lord Evans of Rainow on 19 March 2024.The text of the bill is succinct and only makes two amendments to subsection (3) of section 58AA of the Courts and Legal Services Act, with the first being to insert the following text after paragraph (a): “an agreement is not a damages-based agreement if or to the 5 extent that it is a litigation funding agreement.” The second amendment, which is to be inserted after subsection (3), provides a straightforward definition of a litigation funding agreement with regards to the roles of the funder and the litigant within such agreements. The bill states that these amendments ‘are treated as always having had effect.’ The second section of the draft legislation also clarifies that this act applies solely to England and Wales, and that it ‘comes into force on the day on which it is passed.’The bill was introduced on 19 March and had its first reading in the House of Lords, and according to the UK Parliament website, it now has a second reading scheduled for 15 April 2024. The second reading of the bill allows for a general debate on the details of the bill.
Ziad Mouallem is the Founder & Operator of Practiclaim. Ziad is a Legal Entrepreneur, International Dispute Resolution Specialist, and Legal Innovator & Strategist, with a specific experience in Litigation Finance, Arbitration, ISDS, Enforcement, ADRs, ClaimTech, Legal Systems Design & Engineering, Legal Ops & Products Advisory, and Claim Management & Strategy.
Company Name and Description: Practiclaim
Practiclaim is a multidisciplinary Alternative Legal Claims Service Provider (ALCSP), offering comprehensive end-to-end solutions on a mandate-led basis.
We act as a claims incubator, aiding companies, their in-house functions, claim funders and service providers in efficiently sourcing, managing, optimizing, and realizing legal claims, with a particular focus on international arbitration, cross-border, and multi-jurisdictional business disputes.
Our services include cost-efficient Enterprise Legal Services (ELS) and Legal Process Outsourcing (LPO), ranging from free initial prevention and assessment, through optimized multi-sourced due diligence, to flexible-value-based-fee legal representation, enforcement, and financing/monetization options.
Area of Focus: Claim and dispute management and advisory, claim due diligence, pre-contentious risk management, legal representation support, international arbitration, ISDS, complex litigation, cross-border disputes, enforcement, recovery, international law, dispute resolution, early case assessment, legal tech, claim tech, justice tech, enterprise legal process outsourcing, legal help, claim value maximization, corporate & consumer access to justice, expert in-house support, legal claims solutions, managed legal services, value-driven fee optimization, decentralized justice, know your claim, team aggregation & resources allocation, legal procurement solutions.
Member Quote: "In the dynamic realm of legal claims and dispute resolution, funding solutions serve as the linchpin for ensuring access to justice for corporations and consumers alike. Subject to ongoing economic market adjustments, they enhance accessibility, ensure equitable legal support, facilitate legal mobility for claims, and evolve further into merged service offerings within claim service providers. These endeavors collectively reinforce the foundation of a genuinely just society."
In a strategic move to bolster its litigation finance and loan servicing capabilities, Counsel Financial welcomes Nicholas (Nick) D’Aquilla, Esq. as its new Managing Director. With over a decade of experience in the mass tort industry and as a former civil defense litigator for the Louisiana Department of Justice, D’Aquilla brings a wealth of knowledge and a proven track record of success to the Counsel Financial leadership team.
D’Aquilla has distinguished himself as a leading figure in administering complex settlements, contributing to the administration of more than $20 billion in mass tort settlements across many high-profile cases. His expertise in solution design and oversight services has contributed to the resolution of more than 40 mass tort and class action litigations, spanning environmental, pharmaceutical, medical device, and sexual assault matters.
D'Aquilla will focus on enhancing Counsel Financial's mass tort underwriting processes and loan servicing offering, enhancing the development of valuation models based on historical settlement data. He will also leverage his experience as a consultant for multiple legal technology companies to help drive continued refinement of the company's servicing platform.
“Adding Nick to our team marks a significant enhancement of our litigation finance and loan servicing offerings,” said Paul Cody, President & CEO of Counsel Financial. “Coupling our team’s 200+ years of legal, financial and litigation experience with Nick’s knowledge and insight into the mass tort sector provides unparalleled resources that can be leveraged by both our law firm clients and institutional investors utilizing our servicing platform.”
Before joining Counsel Financial, D’Aquilla played a pivotal role in a complex settlement fund advisory team for a national bank, where he developed innovative underwriting methodologies that enabled credit extensions to mass tort plaintiffs’ firms. There, he also analyzed and valued over $1.5 billion in loan collateral derived from mass tort dockets.
About Counsel Financial
Counsel Financial is an industry leader in originating, underwriting and servicing loans and other financing solutions for contingent fee law firms. For over two decades, Counsel Financial has provided more than $2 billion in capital investments across 300+ law firms. These investments have financed the growth of firms in every area of plaintiffs’ litigation, including personal injury, mass torts, class action and labor and employment.
Last week, Brown Rudnick hosted its third annual European Litigation Funding Conference, proving once again to be one of the premier gatherings of industry thought leaders and executives. The one-day event featured an agenda full of insightful discussions, as senior representatives from funders, law firms, insurers, and other industry firms, all provided their perspectives on the most pressing issues facing the European funding market. The conference served as a reminder of the growing interest in litigation finance, as the venue was packed with attendees and without an empty seat in sight at the start of proceedings.Before the panel discussions began, the event kicked off with a keynote speech from Camille Vasquez, partner and co-chair of the brand & reputation management group at Brown Rudnick. Vasquez, who gained international recognition for her involvement in the Depp v. Heard trial, offered an alternative perspective on litigation funding, exploring its potential use in defamation cases brought by high-profile individuals or companies. As Vasquez explained, whilst it is commonly assumed that celebrities and other public figures have access to large amounts of liquid capital, this is often not the case. In such situations, Vasquez suggested that litigation funders may be able to play a crucial role in supporting high-profile plaintiffs who are eager to pursue defamation litigation but lack the funds to seek justice.A Post-PACCAR World and the Future of RegulationUnsurprisingly, the hottest topic at the litigation funding conference was the ongoing impact of the Supreme Court’s PACCAR ruling and the recent announcement by the UK government that it would introduce legislation to reverse the effects of that decision on litigation funding. Looking at the long-term impact of the Supreme Court’s decision, Susan Dunn from Harbour provided the quote of the morning, when she emphatically stated that the PACCAR ruling would be remembered as “a footnote in history, not a chapter.” Similarly, Nicholas Bacon KC of 4 New Square Chambers, described it as “a blip in the landscape” of the UK funding market, and pointed out that the situation had in some ways had positive effects as it had brought wider public attention to litigation funding.However, speakers across the day recognised that PACCAR had created unnecessary uncertainty for investors considering engaging with the UK market, and had created fresh talking points for the most vocal opponents of third-party funding. NorthWall Capital’s Alexander Garnier reported that the Supreme Court’s judgement had “made people more nervous about investing in the UK and London”, because it had increased the risk of investments or had increased the perception of those risk levels. According to Professor Rachael Mulheron KC, another negative side-effect of the decision has been the “unfortunate conflation between regulation and PACCAR,” which has made productive discussions around the future of industry oversight more challenging.As the event’s participants discussed the effects of PACCAR, these exchanges naturally turned to the government’s announcement of new legislation and a potential review into the litigation funding market. With the review suggesting the possibility of enhanced regulation of third-party funding, Woodsford’s Charlie Morris admitted that this aspect of the government’s announcement was unfortunate, as it had “given an opportunity for the anti-funding lobby” and compared it the “politically motivated campaign” that took place in Australia to crack down on litigation funders.As to what future regulations could (or should) look like, speakers at the conference were divided on certain issues such as a potential cap on the level of returns a funder could take from any award or damages. Morris once again emphasised the need to avoid “broad brush statutory prohibitions”, whilst Dunn firmly argued that a cap on funders’ returns “should not be part of any regulation.” In contrast, Garnier expressed an openness to some form of cap, explaining that he would “welcome clarity” on industry regulations, “even if it involves a regime that includes a cap on damages.”Offering the most succinct perspective on the funding industry’s view of new legislation, Matthew Lo from Exton Advisors argued that there is “nothing to be afraid of about regulation in general, but the devil is in the detail.” On a similar note, Professor Mulheron suggested that the most important thing for any government plans to introduce new regulations is that “funders have to be around the table” for these discussions.The Impact of the Post Office ScandalClosely tied to the UK government’s ongoing attempts to soften the blow of PACCAR, is the role played by the Post Office scandal and the impact it had on bringing the vital role of litigation funding in securing access to justice to the public’s attention. One of the highlights of the day’s discussions was the insight provided by Neil Purslow of Therium, who offered a fascinating account of the funder’s involvement in the sub-postmasters litigation and expressed some frank reflections on the ways it had highlighted the nefarious tactics of defendants.Purslow described the case as a perfect example of a defendant “spending money on lawyers rather than doing the right thing”, and noted that the Post Office had spent £100 million to fight the case rather than actually providing compensation to the victims upfront. Purslow emphasised this fact in combination with a rebuttal of the oft-repeated claim that Therium had taken 80% of the damages awarded to the sub-postmasters, explaining that the actual return for the funder was around 41%. In light of these facts, Purslow described the arguments in favour of a broader cap on funders’ fees as “nonsense”, and instead highlighted the case as yet another instance of defendants taking “a scorched earth approach to litigation.”Purslow concluded his contribution to the day’s discussion by recognising that whilst the PACCAR decision had been “a self-inflicted wound”, the industry and government’s reaction has clearly demonstrated that the UK “is a jurisdiction that is supportive to litigation finance.” Furthermore, Purslow praised his fellow litigation funders for “working together collaboratively and sharing ideas” to protect the UK funding industry, and highlighted the value of institutions like ILFA in providing a powerful voice that could “address the issue and get the government to act.”Economic Pressures, Corporate Cases and Law Firm FundingDuring the day’s panel discussions, speakers offered their views on the trends, opportunities and challenges that industry participants have seen over the last twelve months. As many industry leaders have spoken about in the last year, whilst litigation funding is broadly seen as an uncorrelated asset class, that does not mean that it has been, as Matthew Lo put it, “immune to the wider economic environment”. The majority of panellists agreed that the rise in interest rates had continued to apply pressure on funders’ pricing, which then increased cost of financing creating challenges for those funders looking to raise capital.However, due to these challenging economic conditions, speakers noted that there has been an increase in demand for funding from law firms and corporations, both of whom are facing similar budget pressures whilst still looking to manage their litigation strategies. As Christiane Deniger of Burford Capital explained, many listed companies are actively seeking funding for a portfolio of cases and are “ready and willing to not spend their own money if they can take ours.” Rocco Pirozzolo from Harbour Underwriting added that these corporate cases were often attractive, because key decision makers at these companies share the funder’s perspective that “they have to be commercial and they have to be reasonable.”When it came to working with corporate GCs and CFOs, there was a broad consensus among the industry leaders present that there was still plenty of work to do around educating these inhouse decision-makers on the nuances of litigation funding. Ayse Yazir from Bench Walk noted that there is often still “concern over the control of the case”, with critics of the litigation finance industry contributing to fears that funders would seize control of the litigation process. Nathaniel Cortez of Moelis acknowledged that whilst these corporate leaders “don’t need to be experts on litigation finance”, it was clear that many GCs and financial directors did not “understand the breadth and depth of the industry”.The discussions focused on law firm funding proved to be some of the most enlightening exchanges of the conference, with funders and lawyers alike sharing their perspectives on some of the unique challenges and opportunities that this avenue of investing entailed.Hugo Lestiboudois from SYZ Capital made a clear delineation between straightforward litigation financing and the process of lending directly to law firms. He explained that law firm funding “is not as commoditised as litigation finance is today”, with investors needing to approach it from a business perspective and often having to “compete on terms, rather than on price.” Reinforcing this viewpoint, Chris Benson from Leigh Day argued that this type of funding crucially involves “getting lawyers to think like economists”, and acknowledged that this can be challenging as “a lot of lawyers have no interest in finance.”Looking at the practical steps involved in law firm funding, both in terms of the due diligence undertaken pre-funding and the ongoing monitoring and reporting that must take place post-funding, the speakers once again provided useful insights. Joshua Katz from Gramercy said that from his firm’s perspective, part of the journey was understanding the law firm’s wider strategic objectives, saying that Gramercy recognised that for a firm there are “some cases you should pursue even if they’re not economical, for the greater good.” Similarly when it came to the ongoing relationship between the funder and law firms, it was not only crucial for practical issues like reporting systems to be in alignment, Lestiboudois highlighted the need for a “cultural fit” between firms.A High Benchmark for Industry ConferencesBy the end of the day, the event’s attendees had been treated to a plethora of engaging discussions across seven separate panels, bolstered by plenty of opportunities for networking and connections between sessions. The full scope and detail of every speaker’s insights could not be encompassed in this single overview of the day’s proceedings, but by the time the agenda concluded with informal refreshments, the conference had succeeded in providing an impressively diverse array of perspectives on litigation funding in Europe.Brown Rudnick’s third European Litigation Funding Conference proved to be an enlightening experience for those in attendance, with the proceedings expertly guided by the conference chair Elena Rey and fellow moderators from Brown Rudnick, who skilfully guided the event’s packed schedule. LFJ’s team were delighted to meet with fellow attendees who expressed their enjoyment of the event, and we are already looking forward to covering next year’s iteration of Brown Rudnick’s conference.
A leading litigation finance firm is investing circa £2m into AI technology as the company looks to continue its meteoric global growth. Nera Capital, which has offices in Dublin, Manchester and a newly established presence in The Netherlands, plans to significantly enhance its process optimisation and strengthen data analytics. The investment is expected to significantly benefit the various law firms across Europe, UK and the US that are currently partnered with the company as it seeks to expedite the legal process and ultimately create greater access to justice. Director Aisling Byrne highlighted the impact of technology on the company’s future plans: "Our investment in AI shows our commitment towards efficiency and innovation. "We believe this increase in investment will enhance our entire operations, revolutionising further the way we approach various aspects of our business. By leveraging advanced AI technologies, we aim to further streamline processes, boost efficiency, and drive innovation across the board. The decision is a huge step forward, and I am proud of our continued commitment to staying at the forefront of advancement in legal technology.” Since the company’s inception in 2011,Nera Capital has grown to become a major global player in the world of litigation finance, with operations across several European locations. The company is a specialised funding provider catering to law firms by extending support across diverse claim portfolios such as financial mis-selling, data breach, Cartel damages, personal injury and Antitrust.
It previously announced the creation of 10 new jobs in key areas including legal,auditing, finance and origination, after opening a new office in Weert, Netherlands. Aisling added: “I take immense pride in witnessing the remarkable growth of Nera Capital as it expands worldwide.
“In the face of a rapidly evolving world, our industry has oftenbeen considered slow to adaptin relative terms. We are determined to break free from that inertia and lead the charge towards meaningful change. By embracing cutting-edge AI technology, we have entered a transformative chapter for our firm. The fusion of innovation and data-driven insights empowers us to navigate legal landscapes with even greater efficiency, ensuring our partnered law firms receive the swift and insightful solutions they deserve which can hopefully speed up the justice process for those that need it.”
Nera Capital are expected to look at further expansion into new locations in the near future.
About Nera Capital
Established in 2011, Nera Capital is a specialist funding provider to law firms.
Provides Law Firm Lend funding across diverse claim portfolios in both the Consumer and Commercial sector.
Headquartered in Dublin, the firm also has offices in Manchester and The Netherlands.
Louisa Klouda is the founder and CEO of Fenchurch Legal. She set up the business in early 2020, after identifying a gap for additional small-ticket litigation funders in the UK market.
Louisa is responsible for day-to-day operations, strategic direction and capital raising. Louisa's expertise in sourcing, underwriting and managing borrowers, as well as attracting investor capital has been instrumental in Fenchurch Legal's growth.
Prior to setting up Fenchurch Legal, Louisa worked within corporate finance, specializing in the asset backed lending industry. She managed the broking and dealing desk for secured debt securities, structured various investment products and facilitated some large M&A transactions.
About Fenchurch Legal: Fenchurch Legal is a UK-based litigation financier, specialising in providing disbursement funding to small to medium-sized law firms in the UK. The financing funds small ticket ATE (“After the Event”) cases and covers associated disbursements, all backed by ATE insurance policies. Their focus on smaller claims, often overlooked in traditional funding, ensures that even modest claims, like housing disrepair claims receive the backing necessary to navigate the legal process, ultimately facilitating access to justice and contributing to a more balanced and inclusive legal landscape. Understanding law firm needs, Fenchurch Legal delivers solutions to remove pain points and has developed an offering to avoid problems such as complex drawdown procedures, undisclosed fees, and non-funding of crucial costs like WIP capital. In addition to collaborating with borrowers, we extend the opportunity to investors to invest in this unique market. Fenchurch Legal sets itself apart with a focus on smaller-ticket claims, flexible entry points, and robust security features, making it an accessible and attractive choice for those seeking alternative investment opportunities. The company continues to innovate and has recently developed its own loan management software, providing a bespoke platform for managing loan repayments, monitoring, reporting and onboarding – significantly enhancing the whole business operations, driving efficiency and enabling the business to scale. Company Website:https://www.fenchurch-legal.co.uk/Year Founded: 2020 Headquarters: London Area of Focus: Fenchurch Legal is solely focused on funding smaller cases with an established legal precedent at high volumes. These protocol-driven consumer claims (housing disrepair, Plevin, PCP, financial mis-selling) offer a high potential for success.Member Quote: “The funding market is increasingly recognising the importance of smaller claims. Small ticket litigation funding plays a vital role in the UK legal landscape, offering an alternative approach to financing legal claims. Small-ticket funders like Fenchurch Legal focus on quantity, funding a high volume of smaller cases. Our core strength lies in our deep understanding of the small-ticket claims landscape. We have developed a rigorous and data-driven vetting process tailored to this specific segment of litigation funding, allowing us to identify top-tier law firms and high-potential case types with lower individual risk profiles. At Fenchurch Legal, we believe in the transformative power of small-ticket disbursement funding, and our commitment extends to both law firms and investors. Small-medium law firms can take on cases that might otherwise go unfunded whilst providing an avenue for investors looking for alternative investment opportunities within the litigation funding market.”
Litigation Capital Management (LCM) has announced that Zachary Segal has joined the team as an Investment Manager. In a post on LinkedIn, LCM announced the new hire to their over 3,600 followers. Segal has more than 20 years of experience in the legal profession, specializing in all forms of dispute resolution, and in particular international arbitration, including investor-state disputes, and commercial litigation. LCM hopes that with his impressive background, he will play a key role in driving LCM’s growth and success. The team at LCM wrote: "We are thrilled to have Zach onboard and look forward to the valuable contribution he will make to our team."
Delta Capital Partners Management, a global private equity firm specializing in litigation and legal finance, is pleased to announce that Jonathan Patrick has joined the firm as its Chief Financial Officer and Chief Compliance Officer. Patrick will be based in the firm’s Chicago headquarters. Patrick will oversee Delta’s finance, accounting, compliance, human resources, and administrative functions; and will work closely with senior management on all capital market activities, tax and valuation matters. Prior to joining Delta, Patrick served for over 10 years as the Controller of EnCap Investments, a leading provider of private equity growth capital (over $20 billion of AUM) to independent energy companies, focusing on treasury, fund operations and management company financial reporting. Additionally, Patrick spent over five years in public accounting, including time at Deloitte in their Audit and Enterprise Risk Services practice, and has experience in the Treasury and SEC Financial Reporting functions for Ares Management in Los Angeles. Christopher DeLise, Delta’s Founder, CEO, and Co-CIO stated that “Delta is incredibly pleased to have someone of Jonathan’s caliber and expertise join the firm as we continue to scale our business to increase market share and better serve our investors and customers across the globe. Jonathan’s experience and responsibilities at EnCap will enable him to bring best practices in the areas of private equity, capital markets, and finance to Delta in anticipation of our significant planned growth in 2024 and beyond.” “I am excited to join and look forward to applying my experience and skillset to Delta Capital Partners. Collaborating with the established team here is such a great opportunity and I am eager to be part of this growth.” said Patrick. About Delta Delta Capital Partners Management LLC is a US-based, global private equity firm specializing exclusively in litigation and legal finance, judgment and award enforcement, and asset recovery. Delta creates bespoke financing solutions for professional service firms, businesses, governments, financial institutions, investment firms, and individual claimants to enable them to investigate claims, pursue litigation or arbitration, recover assets, enforce judgments or awards, and more effectively manage their risks, cash flow, and capital expenditures.
Delta Capital Partners Management, a global private equity firm specializing in litigation and legal finance, is pleased to announce that effective March 1, 2024, Anthony Donofrio has joined its Board of Advisors. Prior to joining Delta, Donofrio spent 16 years as the Managing Director, Head of Legal Transactions, and Chief Operating Officer of Co-Investments at Hamilton Lane Advisors, one of the world's leading private markets investment management firms with over $900 billion of assets under management and supervision. In his capacity as Head of Legal Transactions, Mr. Donofrio led a team of attorneys in the negotiation and execution of thousands of private equity primary, secondary, and co-investment transactions and private market credit investments. As the Chief Operating Officer of Co-Investments, Mr. Donofrio oversaw all operational aspects of Hamilton Lane’s $5 billion co-investment strategy, with both the team and assets under management of the program more than doubling in size during his tenure. Christopher DeLise, Delta’s Founder, CEO, and Co-CIO stated that “Delta is honored to have such a respected and accomplished private equity and asset management professional join its Board of Advisors. One of the things that sets Delta apart from other litigation funders is the strength, depth, and accomplishments of its Board. Anthony is a welcomed addition to such an esteemed group and we very much look forward to benefitting from his wisdom, experiences, and talents for many years to come.” “It is an incredible privilege to join Delta’s Board of Advisors. I am energized to work alongside Chris and the rest of Delta’s best-in-class team, and I look forward to contributing my private equity and legal experience as Delta continues to execute its global growth strategy,” said Donofrio. About Delta Delta Capital Partners Management LLC is a US-based, global private equity firm specializing exclusively in litigation and legal finance, judgment and award enforcement, and asset recovery. Delta creates bespoke financing solutions for professional service firms, businesses, governments, financial institutions, investment firms, and individual claimants to enable them to investigate claims, pursue litigation or arbitration, recover assets, enforce judgments or awards, and more effectively manage their risks, cash flow, and capital expenditures.
Florida is one of the latest US states to see the introduction of draft legislation focused on the regulation of litigation finance. Whilst the bill is currently stalled within the Florida legislature, it is important to consider what impact such a piece of legislation would have, if it is eventually signed into law in its current form.An insights piece from John J. Hanley, partner at Rimon Law, examines the current draft legislation making its way through the Florida legislature, which aims to place new guidelines and restrictions on the use of third-party litigation funding in the state. Hanley begins his analysis by noting that this bill has been the subject of intense lobbying, with 67 lobbyists from interest groups and industry associations contributing to the debate over the legislation.Looking at the core features of the Litigation Investment Safeguards and Transparency Act (LISTA), Hanley points out that the idea the bill is designed to protect consumers is misguided, as the focus of the legislation is directed towards commercial litigation finance arrangements. Hanley also explains that whilst the bill prohibits various ways funders could control the litigation process, these are largely superfluous measures, given that every funding agreement that Rimon has reviewed already contains these provisions. Similarly, the legislation’s prohibition on funders paying commissions or referral fees is not expected to have a significant impact on the industry, because these commissions ‘are paid by the party receiving funding and not the funder.’On the bill’s requirement that funders should not receive a larger portion of any damages or award than the plaintiffs themselves, Hanley states that ‘this is a good idea’ and highlights that many ‘reputable funders are already striving to achieve this.’ In contrast, Hanley says that the legislation’s ban on the assignment or securitization of funding agreements ‘is probably the worst feature of LISTA.’ He argues that if such a prohibition were enacted, it would ‘kill liquidity and make it difficult for funders to allocate capital which in turn will drive up pricing and further hurt small business in Florida seeking to fight deep pocketed defendants.’
Burford Capital Limited ("Burford"), the leading global finance and asset management firm focused on law, today announces its fourth quarter and full year 2023 results.In addition, Burford has made available an accompanying fourth quarter and full year 2023 results presentation, a shareholder letter and capital provision-direct and capital provision-indirect asset data tables on its website at http://investors.burfordcapital.com.Christopher Bogart, Chief Executive Officer of Burford Capital, commented:"Burford had an extraordinary year. Our earnings per share rose 19x to $2.74, driven by a tripling of consolidated total revenues to $1.1 billion in 2023 due to significant growth in capital provision income, with and without our YPF-related assets. We achieved a Burford-only net income margin of 63%. With the courts fully back in business, we had an active year and we anticipate further substantial levels of activity in 2024 and 2025. Increased portfolio velocity was reflected in record core legal finance realizations, cash receipts and realized gains, as well as sizeable unrealized gains arising from the portfolio moving forward. Our ROTE soared to 32% in 2023 from 2% in 2022, and we increased tangible book value by 34% to $9.85."
As the UK government accelerates its efforts to implement new legislation to address the impact of the Supreme Court’s PACCAR ruling on litigation funding, the courts continue to deal with ongoing attempts to revise litigation funding agreements to comply with PACCAR.An article in Legal Futures provides an overview of activity in the CAT in 2024, which has granted permission for a number of revised litigation funding agreements (LFAs) to go before the Court of Appeal in the wake of the Supreme Court’s PACCAR ruling. The CAT’s latest decision is the third time this year that the CAT has sent funding agreements to the Court of Appeal, after the terms of the funder’s remuneration in each agreement had been reworked to comply with the PACCAR judgement.The first of these decisions from the CAT was in January and related to the collective proceedings brought against Sony over allegations that it overcharged customers through its distribution of videogames in the Playstation Store. In that case, the CAT ruled that the revised funding agreement which allowed for the funder to receive a percentage of the damages only if this was “enforceable and permitted by applicable law” did not violate the PACCAR ruling. Permission was granted to send the funding agreement to the Court of Appeal, with the CAT saying that a “conclusive” decision was required.The second permission granted for an LFA was in the case of Kent v Apple, where the funding agreement’s terms had been revised to specify that the funder’s returns would be calculated based on a multiple of costs rather than a percentage of damages. The latest example cited by Legal Futures is the CAT’s decision on the funding agreements on the dual opt-in and opt-out collective proceedings which have been brought against Mastercard and Visa. In these proceedings, the returns for funders in the LFAs were revised from a percentage-based recovery to one based on the funder and ATE insurer’s costs, and a multiple of the funder’s spend. Once again, the CAT ruled in favour of sending the revised agreements to be reviewed, stating that the continuing uncertainty about these issues of funding enforceability arising in a series of cases before the tribunal is unlikely to be resolved without determination of the issues by the Court of Appeal”.
In what appears to be the final word on the long-running dispute between Woodsford and Hosie Rice, a Delaware judge has ruled in favour of the litigation funder in its efforts to recoup $1.8 million from the law firm.An article in Legal Newsline covers the decision by U.S. District Judge Colm Connolly to rule in favour of Woodsford’s subsidiary Frome Wye, upholding the prior court order from a magistrate judge requiring Hosie Rice to pay $1.8 million to the funder. In his ruling, Judge Connolly said that Hosie Rice’s objections were “without merit” and found that they were not protected by Delaware’s usury law with regards to the law firm’s obligations to remunerate the funder.The origins of this dispute date back to Woodsford providing around $800,000 in funding for Space Data’s case against Google, with Space Data refusing to pay Hosie Rice after it reached a settlement with Google in 2020. After an arbitrator ruled that Space Data owed the law firm up to $4 million in costs but no contingency fee, Hosie argued that it was not required to award Woodsford any additional fee beyond the original loan repayments. The $1.8 million award was handed down by an arbitration panel as a result of Woodsford’s subsequent lawsuit against Hosie Rice, in which the funder argued that it was owed additional remuneration as the $4 million client payment constituted a ‘revenue event’ for the law firm.
The issue of disclosure in regards to litigation funding has been most associated, in recent years, with patent infringement litigation in the United States, as defendants and judges have probed the nature of the financiers backing lawsuits. However, an ongoing case in the High Court has brought this issue to light in a very different manner, after a claimant said that even they did not know the identity of their litigation funder.Reporting by International Tax Review highlights the case of Webster v HMRC in the High Court, where Justice Rowena Collins Rice ruled against the claimant’s application to strike out an abuse of process defense, over HMRC’s attempts to identify Webster’s litigation funder. Jennifer Webster, the claimant in the case, has stated that she does not know who is funding her case, as the funder has only backed the claim on the condition that its identity remains anonymous and would withdraw from the litigation if its identity was made public. According to the judge’s ruling, Mishcon de Reya, the law firm representing Webster, are aware of the litigation funder’s identity.The ruling came about after HMRC successfully sought a court order to force the claimant to disclose their funder’s identity, which led Webster’s legal team to attempt to have this defence struck out. In her ruling, Justice Collins Rice explained that the funder’s identity was relevant as it addresses concerns over this mystery financier’s motivations for the case. The judge stated: “Funder identity goes, on HMRC’s case, to the core issue of whether this is a genuine private law claim, albeit a test case, generously funded by a disinterested and publicity-shy benefactor with a commitment to human rights, or whether the court’s processes are being abused by an unregulated attack, on a government department exercising statutory public functions in the public interest, made in the service of agencies whose own commitment to the UK public interest, and the interests of justice, is unapparent.”Commenting on the judgement, Dan Neidle, director of Tax Policy Associates, argued that despite the judge’s ruling being “very strange”, it was unlikely that the claimant would be successful if they appealed the decision. As for the mystery funder’s reasons for seeking anonymity, Neidle suggested that it could be a benign motivation or “possibly something more sinister: a person with something to hide, using this litigation to block the rules that prevent its secrets from being uncovered”.
The following article was contributed by Jeff Manley, Chief Operating Officer of Armadillo Litigation Funding. In the competitive landscape of litigation, the strategic use of litigation financing has become a vital tool for law firms to manage cash flow, mitigate risk, and level the playing field. However, the infusion of external capital into the legal process brings forth intricate ethical considerations, particularly concerning client confidentiality. The Imperative of Confidentiality At the heart of the attorney-client relationship lies the paramount duty of confidentiality, a cornerstone enshrined in the American Bar Association (ABA) Model Rules of Professional Conduct Rule 1.6. The Rule obligates attorneys to not reveal information related to the representation of a client without the client's informed consent or unless the disclosure is otherwise permitted by the Rules. This duty persists beyond the attorney-client relationship and extends to all members of a law firm. Ethical Complexities in Litigation Financing Litigation financing requires attorneys to navigate a delicate balance: providing sufficient information to secure funding while safeguarding the sanctity of client confidences. The process typically involves disclosing case merits, potential outcomes, and strategies—details that, if not handled correctly, could jeopardize client confidentiality. Crafting the SafeguardsNon-Disclosure Agreements (NDAs): Prior to any discussion, law firms must insist on stringent NDAs with financing entities. These NDAs must be tailored to explicitly protect any information that may relate to a client's case. De-identification of Data: Information shared during the funding process should be stripped of any identifiers that can link it to a specific client. This step ensures that financiers can evaluate the investment on its merits without risking a breach of confidentiality. Use of Aggregated Data: Where possible, firms should rely on aggregated statistics and data analytics that provide an overview of the firm’s track record and the types of cases they handle, rather than details of individual cases. Informed Consent: In scenarios where the disclosure of identifiable information is unavoidable, the law firm must obtain explicit, informed consent from the client. This consent should be thorough, documenting the specific information to be disclosed, the purpose of the disclosure, and the parties to whom it will be disclosed. The ethical obligations surrounding confidentiality are not mere guidelines but are anchored in legal and regulatory frameworks that govern the practice of law. Violations can lead to disciplinary actions by state bar associations, potential disqualification from cases, and even civil liability. Continuous Ethical Vigilance The journey towards ethical compliance in litigation financing is not one that a law firm undertakes alone. It is a collaborative endeavor that greatly benefits from the engagement of a respected and knowledgeable funding partner. Such a partner brings to the table a deep understanding of the legal landscape and the specific nuances of confidentiality laws that govern attorney conduct. Selecting the Right Partner: A reputable litigation finance partner will have stringent ethical standards in place and will be well-versed in the ABA Model Rules, state bar directives, and relevant case law. This expertise is invaluable in helping to structure financing agreements that are not only beneficial but also fully compliant with legal ethics. Joint Compliance Efforts: A trusted funding partner contributes to the law firm's efforts by engaging in joint compliance checks and due diligence. They will proactively work with the firm to ensure that all shared information adheres to the principles of confidentiality and that any potential ethical pitfalls are identified and mitigated early on. The landscape of legal ethics is not static; it evolves with new rulings and regulations. A knowledgeable funding partner remains abreast of these changes and works alongside the law firm to adapt practices and agreements accordingly. This dynamic approach ensures that the firm's operations remain compliant over time. In the intricate process of litigation finance, a law firm's dedication to maintaining confidentiality must be matched by the acumen of its financial allies. The right funding partner does not merely provide capital; they contribute to the ethical fortitude of the funding process. Through continuous vigilance and a partnership grounded in mutual respect for the law, firms can navigate the complexities of litigation financing while upholding the sacred duty of client confidentiality.
Juris Capital, an investment manager specializing in innovative financial solutions for commercial litigants and law firms, is delighted to announce that Dane Lund has joined as a Managing Director. As Juris begins to expand its offerings of tailored financial solutions for commercial claimants, top-tier law firms and litigation boutiques, Lund will play a leading role in developing and executing new strategies for the firm. With the addition of Lund, Juris will offer more bespoke solutions for a wide range of cost needs, whether in the hundreds of thousands or millions. With over a decade of legal and financial experience, Dane brings valuable insight to Juris Capital. Dane has worked across a breadth of industries, including legal services, banking, litigation finance, and blockchain services, providing unique perspectives that can propel Juris’ business forward. "I am honored to join Juris Capital, an industry pioneer and one of the most successful firms in legal finance," said Lund. "I look forward to furthering Juris Capital's mission of providing innovative, client-focused solutions. I envision Juris growing to become not only a commercial litigation funder of choice, but also a balance sheet partner to the most innovative law firms in the country." About Juris Capital: Juris Capital is a capital partner to commercial litigants and law firms that has led financings ranging from $250k-$29mm. Since 2009, Juris has set a standard for ethical and collaborative legal financing. Juris helps commercial claimants and law firms manage litigation risk, pursue meritorious claims despite high litigation costs, and reallocate capital to core business purposes. Juris also works directly with law firms to help optimize their balance sheets, enable thoughtful growth and expand firm offerings. Dane Lund: dlund@juriscapitalcorp.com Juris Capital: www.juriscapitalcorp.com
While engaging quantum computing across the legal spectrum is still in its infancy, litigation funders are increasingly looking to manage financial risk exposure with in-house data analytics systems. A new article pressure tests the most evident matters concerning quantum data and litigation finance. Mondaq reports on how litigation financiers are integrating algorithmic data tools into their decision making. With the potential of billions of dollars in proceeds, it is important to understand the impact of data architecture through self inventory, extraction and analysis. Spotting holes in data systems is essential, and should be encouraged to promote a nimble innovation strategy within an organization. Current popular uses of data analysis in litigation finance include quantifiable forecasts of economic harm caused by defendant actions, and contemplation of settlement proposals. Devising solutions to mitigate data disasters is also a prime concern for third party funding. For example, some litigation funders are compiling “data literacy” manuals to increase and enhance engagement between colleagues. The future of quantum data analysis in litigation finance will belong to those who conceptualize systems that maximize ROI and improve operational efficiencies.
LegalPay, India's leading litigation finance company, has been named the BEST LEGALTECH STARTUP OF THE YEAR by Entrepreneur India at the prestigious Tech and Innovation Summit 2024. This recognition underscores LegalPay's unwavering commitment to revolutionizing the legal finance landscape and empowering businesses with innovative solutions.
LegalPay tackles the chronic issue of delayed payments faced by businesses. Their groundbreaking financing solution, QuickSettle, offers a lifeline to thousands of businesses struggling with cash flow. QuickSettle provides immediate funding to creditors, allowing them to receive their dues upfront. Simultaneously, debtors benefit from flexible repayment plans, easing financial strain and facilitating a win-win outcome for all parties involved.
"In today's dynamic economic climate, access to flexible financing solutions is vital for businesses to thrive," says Mr. Kundan Shahi, Founder & CEO of LegalPay. "We are incredibly honored to be recognized by Entrepreneur India. This award is a testament to our steadfast dedication to pushing the boundaries of innovation in the legal finance industry. We remain committed to empowering businesses and fostering a culture of faster dispute resolution in India."
LegalPay’s innovation transcends traditional boundaries. By bridging the gap between creditors and debtors, QuickSettle fosters collaboration and trust, reducing the need for costly litigation. In today’s dynamic business landscape, access to working capital is paramount. QuickSettle liberates working capital, allowing businesses to focus on growth and expansion.
The recognition from Entrepreneur India serves as a testament to LegalPay's dedication to pushing the boundaries of innovation in the legal and financial technology sector. As businesses continue to seek efficient and sustainable solutions to recover their dues, LegalPay remains steadfast in its mission to empower businesses and drive positive change in the industry.
About LegalPay:
Founded in 2019 by Kundan Shahi, LegalPay has emerged as India's largest litigation funding company, currently managing over USD 400 Million worth of claims. Through innovative solutions like QuickSettle, LegalPay empowers businesses to navigate financial hurdles seamlessly and unlock their true potential.
Earlier this week, LFJ covered the announcement by the Ministry of Justice (MOJ) that it would introduce new legislation to reverse the effects of the Supreme Court’s PACCAR ruling, and protect access to third-party litigation funding. As part of this announcement, the government also revealed that it would be conducting a review of litigation funding, to ensure that claimants who access funding receive an adequate share of any compensation secured through funded litigation.Since the announcement, we have seen a variety of responses from litigation funders and legal professionals, as the industry looks towards the future of litigation finance in the UK.Reacting to the announcement on Monday,Factor Risk Management’s managing director, Mohsin Patel, described it as ‘very welcome news to funders, claimants and lawyers alike’, adding that the proposed law ‘will provide much needed certainty and clarity for stakeholders in future.’ However, he voiced caution around the Government’s plans for reform of litigation funding in the UK, emphasising that it should not ‘take any steps that may jeopardise its development.’The president of the Law Society of England and Wales,Nick Emmerson said that his organisation welcomed ‘the UK government’s aim of helping the public achieve access to justice.’ With regards to the planned review of the litigation finance market, he acknowledged that ‘there could be merit in a review,’ but suggested that the government should consider ‘the risk of the funding arrangement rendering any victory hollow for the consumers affected.’A statement from Martyn Day, co-president ofThe Collective Redress Lawyers Association (CORLA), described the government’s plans as ‘a very sensible and welcome development’ and suggested that the new legislation would prevent ‘corporations tying up court time and money in trying to unpick the funding agreements that make the claims possible.’ Similarly to other industry figures, Day argued that any planned reforms around the funding of collective actions ‘must build on today’s welcome announcement and not undermine it.’ Furthermore, he expressed CORLA’s willingness to ‘work closely with government on any reform that gives clarity, certainty and fairness to claimants and those who support them in bringing their claims.’In a letter to theFinancial Times, Steven Friel, chief executive of Woodsford, focused on the Lord Chancellor’s suggestion that as part of the review of litigation funding, it would consider a cap on the fees paid to litigation funders. Friel stated that instituting a cap ‘would be a mistake’, arguing that with a competitive market already providing a measure of self-regulation on fees, ‘a cap that will inevitably be lower than the market is prepared to go on some cases will cause many meritorious claims to become economically unviable to fund.’ Instead, Friel suggested that the government should ‘redirect the obligation to pay some or all of the litigation funding fees from the victims to the wrongdoers.’Tets Ishikawa, managing director of LionFish Litigation Finance, offered a similar verdict on the government’s intention to conduct a review into third-party funding, arguing that recoverability of funders’ fees is the best solution. Ishikawa suggested that ‘allowing recoverability would allow the funding industry to support the many impecunious clients with cases smaller than the Post Office matter that we currently have to turn away.’Jack Bradley-Seddon, partner and litigation funding specialist at Thaxted Capital, celebrated the ‘positive tone in the announcement’ and highlighted that it was a welcome contrast with ‘a lot of the negative sentiment that has been printed about the industry previously.’ He went on to caution that ‘the devil will be in the detail’ of the proposed legislation, noting that there is ‘a big difference between positive soundbites before an election, and a precise and carefully worded piece of legislation that actually fixes the problem.’
The strength of litigation funding for class actions in Australia continues to be demonstrated, as a class action representing underpaid hospitality workers has reached a multimillion dollar settlement with the employer.An article in the Australian Financial Review covers the resolution of a class action brought against hospitality company, Merivale, who has agreed to a without-admission settlement of $18 million. If approved by the Federal Court, $8.6 million of the settlement will be distributed to cover the legal costs and the commission for the class action’s litigation funder, ICP Funding.The class action was brought against the hospitality giant over allegations that it had underpaid around 14,000 employees, with the total amount of unpaid wages amounting to $129 million. The lawsuit alleged that Merivale had been relying on an outdated ‘WorkChoices’ agreement from 2007, which had not been legitimately approved and failed to meet the industry award. Despite agreeing to settle the case, Merivale’s spokesperson said that the company “strongly denies these allegations and continues to do so.”The group action’s members were represented in the case by Adero Law, with the costs of the case covered by ICP Funding. The terms of the settlement agreement would see the funder receive roughly 25% of the total amount, with $2.5 million for costs and $4.4 million as commission. Adero would receive $1.25 million for its deferred costs, plus $500,000 to cover its administration costs for distributing the remaining settlement.
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