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Bills Targeting Litigation Finance Disclosure and Foreign Funders Make Progress in Louisiana

By John Freund |

Reporting by Bloomberg Law covers the campaign to introduce new rules governing litigation funding in the state of Louisiana, with proponents of the legislation sensing an opportunity to make progress since the state elected a new governor, Jeff Landry. The two bills making their way through the Legislature are: HB336, which would create a Litigation Financing Disclosure Act, and SB355, which would enact ‘transparency and limitations on foreign third-party litigation funding’. 

In an interview with Bloomberg, Representative Emily Chenevert ,who brought HB336, explained that the turnover in elected representatives provided a fresh opportunity, saying: “The appetite was there already within the legislature and so now it’s like, let’s attempt this and let’s see with a new House and some new senators what could happen.” Dai Wai Chin Feman, managing director at funder Parabellum Capital, spoke out in opposition to Chenevert’s bill but said that SB355 was “acceptable to our industry.”

HB336 would require any party in a civil action to disclose the existence of a litigation financing agreement, whilst redacting the financial details of the agreement, and would make all financing arrangements ‘permissible subjects of discovery’. The bill also prohibits funders from controlling or making any decisions in the proceedings, stating that ‘The right to make these decisions remains solely with the plaintiff and the plaintiff's attorney in the civil proceeding.’

SB355 requires any foreign litigation funder involved in a civil action in Louisiana to disclose its details to the state’s attorney general (AG), and to provide the AG with a copy of the funding agreement. Similarly to HB336, this bill would prohibit the foreign funder from controlling the legal action in any way and also prohibits the funder from being ‘assigned rights in a civil action for which the litigation funder has provided funding’.

HB336 has been approved by the state House and was referred to the Senate Judiciary Committee, whilst SB355 has cleared the majority of procedural hurdles and now awaits a vote by the House.

Stonward’s Demarco: Funding Market Trending Towards Consolidation and Specialization

By John Freund |

In an interview with Leaders League, Guido Demarco, head of legal assets at Stonward, discusses the current state of the litigation funding market. The interview explores recent trends affecting funders, the nuances of the Spanish funding market, and Stonward’s own approach to legal strategy and market specialization.

Beginning with an overview of the global litigation funding industry, Demarco highlights the move towards consolidation, with funders specializing in specific legal sub-sectors or markets. Demarco says that this approach allows funders “to leverage expertise in particular legal domains or jurisdictions, enhancing their ability to assess and manage risks effectively.” He goes on to explain that the cost burden of case origination and due diligence, along with the need for specialized experts for each legal area, means that consolidation allows funders to maximise capital efficiency and scale their operations.

Focusing on the Spanish market, Demarco describes the country as a “promising hub” for litigation finance, pointing to the jurisdiction’s “sophisticated legal market” and its position as “a double gateway to the broader Latin American continent and the EU market.” Referencing his earlier explanation of the trend towards consolidation, Demarco argues that this has benefitted Spain as the market continues to attract specialist funders who can build an on-the-ground footprint in the market. As for Stonward’s exclusive focus on the Spanish funding market, Demarco says that this strategy has allowed the business “to develop an in-depth understanding of local legal intricacies, enabling the team to navigate the unique challenges and opportunities presented by Spanish procedural law.”

Darrow Names Mathew Keshav Lewis As Chief Revenue Officer & US General Manager

By John Freund |

Darrow, the leading AI-powered justice intelligence platform, today announced the appointment of Mathew Keshav Lewis as its first Chief Revenue Officer and US General Manager. Lewis brings over 20 years of experience driving revenue and growth for high-profile legal and technology companies – including SaaS platform Dealpath, alternative investment platform Yieldstreet, and legal services pioneer Axiom Law – and will be responsible for helping Darrow scale as it continues an accelerated growth trajectory. 

"Mathew's arrival at Darrow opens enterprise-level deals to all plaintiff law firms, previously accessible only to a select few,” said Evyatar Ben Artzi, CEO and Co-Founder of Darrow. “His expertise from YieldStreet and Axiom empowers our partners to leverage AI, driving unprecedented growth and innovation.” 

Lewis, who will be based in Darrow’s New York headquarters, joins Darrow after serving as the first Chief Revenue Officer of Dealpath, a real estate deal management platform. He also previously held the role of Chief Revenue Officer and GM, Investments at Yieldstreet, where he drove record revenue and growth for the investment platform. 

“I’m delighted to join a team of tremendously talented individuals at Darrow, who have already disrupted the legal technology space and forged the path ahead,” said Mathew Keshav Lewis, Chief Revenue Officer & US General Manager of Darrow. “I am inspired by Darrow’s progress to date, and I look forward to working alongside Darrow’s growing team to expand the company’s footprint.”

This announcement comes at a period of rapid growth for the company, which completed its $35 million Series B funding round last year. Darrow currently works on active litigation valued over $10 billion across legal domains such as privacy, consumer protection, and antitrust. 

About Darrow: Founded in 2020, Darrow is a LegalTech company on a mission to fuel law firm growth and deliver justice for victims of class and mass action lawsuits. Darrow's AI-powered justice intelligence platform leverages generative AI and world-class legal experts and technologists to uncover egregious violations across legal domains spanning privacy and data breach, consumer protection, securities and financial fraud, environment, and employment. Darrow is based out of New York City and Tel Aviv. For more information, visit: darrow.ai

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Summary of the Lords’ Committee Stage Debate on the Litigation Funding Bill

By John Freund |

Following the second debate of the Litigation Funding Agreements (Enforceability) Bill in the House of Lords, the bill was moved forward to the committee stage for members to propose amendments and undertake a line by line examination. As LFJ reported yesterday, three amendments were proposed in advance of the committee debate, with two being put forward by Lord Stewart of Direlton, the Advocate-General of Scotland, and one by Lord Marks of Henley-on-Thames. 

LFJ has read through the full transcript of the committee stage debate and has provided a summary, highlighting key takeaways from the contributions made by each of the members of the House.

Yesterday’s debate was opened by Lord Stewart, who began by responding to issues raised by other members during the second reading of the bill. With regards to the retrospective nature of the bill, Lord Stewart acknowledged the potential issues that this could raise for claimants who negotiated new funding arrangements post-PACCAR, and told the House that “the Government are looking into the questions raised and hope to provide a further update on Report.” 

Lord Stewart then went on to introduce the two amendments on behalf of the government, starting with Amendment 1 which was described as a “technical amendment” and was designed to close a small gap in the definition of litigation funding agreements (LFAs). He explained that the amendment would ensure that an LFA “which is used to fund items of expenditure where the litigant is unrepresented” will be rendered enforceable by the new legislation. He stated that this amendment “reflects the policy object of the Bill”, and would avoid any LFAs being missed in the government’s efforts to reverse the impact of the PACCAR ruling.

Amendment 2 was also described as another technical change, which Lord Stewart said would “make it clear that the payment of adverse costs the litigant may be required to pay to another party, which would be funded under an LFA, includes the payment of costs following court, tribunal or arbitration proceedings, or as part of a settlement.”

Following on from Lord Stewart’s introduction of the government’s amendments, Lord Marks began by covering the arguments in favour of the introduction of regulation for the litigation funding market. Among these arguments, the most prominent point raised by Lord Marks was the idea that “in an unregulated market, litigation funders can effectively impose their terms on clients”, thereby reducing the amount of compensation that claimants may receive from any settlement. He also pointed to the question posed by others that, “if regulation of DBAs is appropriate for lawyers, why is it not for litigation funders?”

Lord Marks then continued on to address the issue of “retrospectivity” in the bill, noting that concerns had been raised that the retrospective nature of the bill and that any legislation attempting to include such a measure, must demonstrate “special justification”. Lord Marks said that he had concluded that in order to avoid “confusion and uncertainty”, this was one such situation that demonstrated special justification because it would ensure  that “in the case of LFAs between the PACCAR decision and the commencement of this Bill, such LFAs should be in the same position as LFAs entered into in the interregnum or in the interim period.”

Moving on to his own probing amendment, which called for a review into third-party funding and laid out the scope of the proposed review’s focus, Lord Marks acknowledged that “it has been comprehensively and well answered” both by letters from the Secretary of State and Lord Stewart, and by the publishing of the terms of reference for the Civil Justice Council (CJC) review. He went on to say that he was “pleased to see that the Government realise that this is urgent and that the whole question of looking at the field of litigation funding is both important and urgent.”

Speaking briefly about the CJC’s planned review, Lord Marks expressed that he was pleased to see the breadth of the review’s remit, including the issue of “whether there should be regulation and how, if there is to be regulation , it should be framed.” Among the other important issues that the review will be exploring, Lord Marks highlighted areas including the idea of a cap on funder’s returns, the recoverability of funder’s costs, and the potential conflicts of interest between funders, law firms and their clients.

Lord Marks closed his contribution by voicing his support for both of the government’s amendments.

Lord Carlile of Berriew was the next member of the House to speak, addressing the questions previously raised around the bill’s potential to violate the Human Rights Act and whether the retrospective quality of the bill. Lord Carlile spoke succinctly in saying that the arguments about the Human Rights Act were “not strong, and the Government are perfectly entitled to act as they are in that regard.” Furthermore, he went on to say that this legislation “would be absolutely pointless if it were not retrospective”, arguing that the purpose of the bill was to “right a wrong that nobody expected, and it is simply restoring to people the legal rights which they already had.”

Lord Carlile also took time to briefly endorse the CJC review and its terms of reference, going on to praise the choice of the CJC as the reviewing body. He explained that he would not be “an enthusiast for an independent reviewer in this situation”, and that the CJC would have the ability to be flexible whilst also retaining the ability to “change the law in small ways to ensure that appropriate procedures are followed.”

Baroness Bennett of Manor Castle followed Lord Carlile but rose to voice opposition to the current approach to this legislation and said that it “is still not an adequate solution to the problems at hand.” She argued that the government is actually facing “a structural problem”, arguing that the current legal system demonstrates a “huge inequality of arms”. She concluded by saying that under this existing system, which the bill does not attempt to deal with, “there is far too much justice denied to individuals in our society when they are crushed by the weight of corporations or the state.”

Lord Sandhurst joined Lord Carlile in supporting the government’s amendments, arguing in favour of the retrospective nature of the bill whilst this opens up the possibility of “a spate of future litigation of the wrong satellite nature”, the government cannot afford to allow the current situation to continue. Considering the issue of a challenge by the ECHR, Lord Sandhurst argued that when crafting this type of legislation, “There may be no perfect answer, but this is the right route—or the least bad.”

Lord Thomas of Cwmgiedd spoke briefly in support of the bill and the CJC review, noting that the reviewer will be able to draw upon the lessons learned during Australia’s review of litigation funding regulations and the research completed by the European Law Institute. He argued that the example of Australia may demonstrate that the best strategy is not “the creation of yet another regulatory body” but instead giving the courts “the powers and guidance necessary to deal with the issues.”

Lord Ponsonby of Shulbrede was the final peer to join the debate and took the time to address the real world use cases for litigation funding, highlighting its value to small and medium-sized companies to manage their cashflow whilst pursuing meritorious litigation. He argued that the use of LFAs is an ideal “way of managing risk”, and that the UK should not fall behind other jurisdictions such as Singapore, Australia, and Dubai, which would happily take up this share of the global litigation funding market.

Lord Stewart returned to the floor to close out the debate, taking the time to address issues and concerns raised by each of the members and reiterate the objectives of the government’s bill. Of primary importance procedurally, Lord Stewart focused on Lord Marks’ amendment requiring a review of the third-party funding sector, stating that in the face of the CJC review “his amendment is not necessary and will duplicate efforts.” Therefore, he requested that Lord Marks not press the amendment at this stage.

At the close of the debate, both of the government’s amendments were agreed and as Lord Marks had decided not to press his amendment, the debate was ended. The amended version of the bill can be read here.

The bill now moves to the report stage, which provides an opportunity for members of the Lords to further examine the bill and propose any additional amendments to the text. 

The full transcript of the committee stage debate can be read here.

Omni Bridgeway Releases Investment Portfolio Report for 3Q24

By John Freund |

Omni Bridgeway Limited (ASX: OBL) (Omni Bridgeway, OBL, Group) announces the key investment performance metrics for the three months ended 31 March 2024 (3Q24, Quarter) and for the financial year to date (FYTD).

Summary

  • Investment income of A$296 million FYTD; A$56 million provisionally attributable to OBL.
  • 23 full completions, 17 partial completions FYTD, with an overall multiple on invested capital (MOIC) of2.0x.
  • A$333 million of new commitments FYTD with a corresponding A$447 million in new fair value, on track to achieve our A$625 million target.
  • Pricing remains at improved levels, up 32% for the FYTD compared to FY23.
  • Strong pipeline, with agreed term sheets outstanding for an estimated A$212 million in new commitments.
  • OBL cash and receivables of A$101 million plus A$60 million in undrawn debt at 31 March 2024.
  • A$4.4 billion of possible estimated portfolio value (EPV) in completions over the next 12 months. 
  • Further simplification and enhancement of our disclosures as announced at the Annual General Meeting, comprising non-IFRS OBL-only financials and non-IFRS fair value on a portfolio basis and OBL-only basis.
  • These new disclosures and metrics, as well as a valuation framework for our existing book and platform, were presented at our investor day on 27 March 2024.

Refer to https://omnibridgeway.com/investors/investor-day.

Key metrics and developments for the Quarter

Income and completions

  • Investment income of A$296 million generated from A$193 million income recognised and A$103 million income yet to be recognised (IYTBR), with A$56 million provisionally attributable to OBL FYTD (excluding management and performance fees). 
  • During the Quarter, 11 full completions and 11 partial completions (excluding IYTBR), resulting in 23 full completions and 17 partial completions (excluding IYTBR) FYTD, and one secondary market transaction, with a FYTD overall MOIC of 2.0x.

New commitments

  • Our stated targets for FY24 include A$625 million in new commitments or equivalent value, prioritising value over volume to reflect potential for improved pricing of new commitments.
  • FYTD new commitments of A$333 million at 31 March 2024 (from matters that were newly funded, conditionally approved or had increased investment opportunities). 
  • The fair value associated with these commitments is $447million, 72% of the full year value generation target.
  • Pipeline of 37 agreed exclusive term sheets, representing approximately A$212 million in investment opportunities, which if converted into funded investments is a further 34% of our FY24 commitments target.  
  • In addition to the regular new commitments to investments in the existing funds FYTD, an additional A$11.5 million of external co-fundings were secured for these investments to manage fund concentration limits. OBL will be entitled to management fees as well as performance fees on such external co-funding.

Portfolio review

  • A$4.4 billion of EPV is assessed to possibly complete in the 12 months following the end of the quarter. This 12 month rolling EPV is based on investments which are subject to various stages of (anticipated) settlement discussions or for which an award or a judgment is expected. All or only part of these may actually complete during the 12 month period.
  • We anticipate replacing these final EPV metrics with fair value metrics by the end of this financial year.

Cash reporting and financial position

  • At 31 March 2024, the Group held A$100.7 million in cash and receivables (A$62.8 million in OBL balance sheet cash, A$2.0 million in OBL balance sheet receivables and A$35.9 million of OBL share of cash and receivables within Funds) plus access to a further A$60 million in debt.
  • In aggregate, we have approximately A$161 million to meet operational needs, interest payments, and fund investments before recognising any investment completions, secondary market sales, management and transaction fees, and associated fund performance fees.
  • Post Quarter-end and as per the date of this report, in anticipation of the expiry of the availability period of the debt facility, OBL has drawn down the A$60 million in undrawn debt and received the funds.

Investor day

The investor day presentation and Q&A which took place on 27 March 2024 can be viewed at https://omnibridgeway.com/investors/investor-day.

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Litigation Funding Support Ensures Law Firm Can Continue MoD Lariam Claims

By John Freund |

A frequent talking point among claimant law firms and litigation funders is the use of delaying and prolonging tactics by defendants, hoping to continually increase the financial cost of bringing a case until it is no longer viable to do so. However, as a recent example demonstrates once again, third-party litigation funding provides a significant weapon in the claimant’s arsenal when it comes to combating this type of strategy.

An article in The Law Society Gazette covers ongoing developments in the group action being brought against the Ministry of Defence over claims that its prescription of Lariam, an anti-malarial drug, caused harmful side effects to armed forces personnel. The law firm leading these claims, Hilary Meredith Solicitors, has denied reporting that it is facing bankruptcy due to the large costs involved in the case, and told the Gazette that its financial backing is secure.

In a statement to the Gazette, the law firm stated that its “bank and litigation funders have confirmed their ongoing financial support”, which will allow the law firm to continue with the Lariam cases without fear of bankruptcy. Hilary Meredith Solicitors admitted that whilst it had been necessary “to borrow millions of pounds to fund this David and Goliath type action”, the law firm’s financial footing was secure with the support of outside lenders.

The identity of the litigation funder supporting Hilary Meredith Solicitors is not specified by the law firm’s statement or the Gazette’s reporting.

The firm also confirmed that with 10 lead cases scheduled for trial at the High Court next year, they are now “close” to agreeing a settlement with the MoD. The Gazette also cites its reporting from last year, which revealed that the MoD had spent £20 million on its legal budget to defend against the claims brought between 2021 and 2022.

Three Amendments to the Litigation Funding Bill Discussed at Committee Stage

By John Freund |

As the Litigation Funding Agreements (Enforceability) Bill is subject to a line by line examination during the committee stage today, we can analyse the amendments that have been put forward by members of the House of Lords. Of the three amendments that were discussed during the committee stage, two were put forward by Lord Stewart of Direlton and one by Lord Marks of Henley-on-Thames.

Both of Lord Stewart’s amendments deal with the section of the bill that provides a definition of a litigation funding agreement.

The first of Lord Stewart’s amendments calls for the following line to be inserted at the end of the Clause 1, page 1, line 14: “(ia) where the litigant is a litigant in person, expenses incurred by that litigant, or”. In his explanatory statement, Lord Stewart said that this language “ensures that the definition of litigation funding agreements includes agreements under which a funder agrees to fund expenses incurred by a litigant in person.” 

The second of Lord Stewart’s amendments relates to Clause 1, page 1, line 16, which would take the following sentence: “the payment of costs that the litigant may be required to pay to another person by virtue of a costs order”, and would now be followed by: “, an arbitration award or a settlement agreement”. Lord Stewart explained that this would ensure that the bill’s definition of an LFA would also include “agreements under which a funder agrees to pay costs relating to litigation that arise by virtue of an arbitration award or a settlement agreement, as well as by virtue of a costs order.”

Lord Marks’ “probing amendment” would follow Clause 1 and would be titled “Review: enforceability of litigation funding agreements”. The language of the amendment requires the Lord Chancellor to “establish an independent review of the impact of provisions in this Act” and lays out the scope of such a review. This would include a review of safeguards for claimants, regulation of third-party funding, funders’ returns, and alternatives to LFAs. The amendment dictates that the review must be completed by 31 August 2025, and that the Lord Chancellor must then provide a response before Parliament within three months of receiving the review.

The full text of the amendments can be read here.

The current version of the bill can be read here.

LFJ will be providing a summary of the committee stage hearing once the Hansard transcript is available.

Member Spotlight: David Harper

By John Freund |

With over two decades of experience in technology and Business Process Outsourcing (BPO), David Harper has made significant strides in the UK's BPO landscape, particularly noted for scaling one of the fastest-growing BPO businesses focused on enhancing customer experience and retention. 

David's expertise in navigating complex outsourcing and insourcing strategies has helped numerous top-tier law firms boost efficiencies and cut costs, effectively integrating transformative legal technologies into their operations.

As co-founder and CEO of Legal Intelligence Ltd., David is pioneering the utilisation of Generative AI, Machine Learning, and Robotic Process Automation to demystify advanced technologies for Litigation Funders and Law Firms. His vision is to craft a suite of powerful AI assets that provide clients with a formidable competitive edge, simplifying complex processes and empowering them to excel in a highly competitive environment.

Beyond his professional achievements, David is a devoted family man, enjoying quality time with his partner and two sons. Beyond his professional life and proud patron of The Prince's Trust, dedicating time to charitable causes. Recently, he ventured into farming by purchasing a farm, and is enthusiastically navigating the steep—and often muddy—learning curve that comes with rural management.

Company Profile: Legal Intelligence Ltd

At Legal Intelligence, our mission is to empower legal firms and litigation funders to expand and innovate in a risk-managed environment. Our expert team, comprising AI, software, and data science specialists alongside seasoned professionals in litigation and finance, excels in developing and deploying cost-effective AI solutions that transform inefficiencies into robust efficiencies at scale.

Our clients benefit from rapid capital deployment, streamlined client onboarding, and unparalleled book-building capabilities. Automation drives our processes, ensuring reduced overheads and top-tier operational and customer service delivery, allowing our clients to scale confidently and maintain service excellence.

Understanding the economic dynamics of litigation funding and their partnered law firms has led us to develop a unique cost model for our suite of AI tools. We align our model with the risk and reward dynamics often seen in funded arrangements, truly partnering with our clients—your success is indeed our success.

Legal Intelligence is setting new standards for excellence and innovation in the legal sector. Let us be your partner in driving digital transformation. Together, we'll redefine what's possible in the legal industry, achieving outcomes that are efficient, risk-aware, and client-focused.

Welcome to the future of litigation—and yes, we're really nice people too!

Websitewww.legalintelligence.ai

"Generative AI is not about replacing human expertise but enhancing it. Our suite of AI assets ensures a seamless integration of human judgment with advanced AI capabilities, providing a synergy that is unmatched in the industry," says David Harper.

Year Founded: 2024
Headquarters: London and Gateshead, operating globally.
Area of Focus: Legal Technology and AI Outsourcing Solutions

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Carpentum Capital Launches Aurigon Litigation Risk Consulting (LRC)

By John Freund |

The team around former Carpentum Capital has launched AURIGON LITIGATION RISK CONSULTING (LRC), a litigation funding intermediary based in Switzerland with a special focus on Latin America. 

Founder and Managing Director Dr. Detlef A. Huber comments: ”AURIGON LRC is combining two worlds, litigation finance and insurance. Both areas are increasingly overlapping. Insurers offer ever more litigation risk transfer products and funders recur to insurance to hedge their risks. Hence complexity and advisory requirements are increasing, especially in still developing markets like Latin America. With our team of lawyers and former re/insurance executives trained in Latin America, the US, UK and Europe we are perfectly suited to advice our clients in any stage of the funding process or in related insurance matters. Our goal is to become the preferred partner for litigation and arbitration funding projects out of Latin American jurisdictions and I am looking forward to this new adventure.”

ABOUT AURIGON

AURIGON Advisors Ltd. is operating as re/insurance consultancy since 2011 with a special focus on dispute resolution and auditing. With AURIGON LRC an intermediary for litigation funding has been launched servicing our clients out of Argentina, Chile, Brazil and Switzerland in Spanish, English, Portuguese and German. With our experience setting up the first Swiss litigation fund dedicated to Latin America (founded 2018), and in the insurance advisory area (since 2011), we are bringing together knowledge of processes and mindsets of the funding and the insurance world. 

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Key Highlights from the Inaugural LF Dealmakers European Edition

By John Freund |

Last week, the LFJ team attended the inaugural LF Dealmakers European Edition, held across two days at the Royal Lancaster in London. Building on the longstanding success of Dealmakers’ New York event, the first edition of the European conference brought together an impressive selection of leaders from across the industry.

Spread across two days, LF Dealmakers featured an agenda packed with insightful conversations between some of the most prominent thought leaders in the European litigation finance market. An array of panel discussions covered everything from the looming potential of regulation to the increasing corporate adoption of third-party funding, with these sessions bolstered by a keynote interview between two of the key figures in the Post Office Horizon litigation.

A long road to justice for the postmasters

In a conference that managed to fill every single panel discussion with speakers engaged in some of the largest and most influential funded disputes taking place in Europe, the standout session of the two days provided unparalleled insight into one of the most famous cases of recent years. The keynote interview on ‘The Future of Litigation Funding in the Wake of the Post Office Horizon Scandal’ saw James Hartley, Partner and National Head of Dispute Resolution Freeths, and Neil Purslow, Founder & CIO, Therium, offer up a behind-the-scenes tale of the sub-postmasters campaign for justice.

Going back to their first involvement with the case, James Hartley reminded attendees that whilst those looking at the case post-judgement “might think it was a slam dunk”, this was not the viewpoint of the lawyers and funders who first agreed to lead the fight against the Post Office. As Hartley described it, this was a situation where you had “a government owned entity who would fight to the end”, with a multitude of potential issues facing the claimants, including the existence of criminal convictions, the limited amounts of documented evidence, and the fact that the Post Office was the party that had ninety percent of the data, documents, and evidence.

Hartley also offered his own perspective on the legal strategy adopted by the Post Office and its lawyers, noting that at every stage of the litigation, “every single issue was fought hard.” He went on to explain that whilst he was “not critical” of the defendant’s strategy in principle, there remains the underlying issue that “the arguments they made were not consistent with the evidence we were seeing.” Hartley used this particular point to illuminate the issues around defendant strategies in the face of meritorious litigation that is being funded. He summarised the core issue by saying: “There is nothing wrong with fighting hard, but it’s got to be within the rules, and in a way that helps the court get to a just outcome.”

Offering praise for the support provided by Purslow and the team at Therium to finance the case, Hartley stated plainly that “without Therium’s funding it would not have gone anywhere, it would not have even got off the ground.” Both Purslow and Hartley also used the case to highlight problems around the lack of recoverability for funding costs and how that incentivises defendants such as the Post Office to prolong litigation and inflate legal costs. Hartley said that he would welcome a change to rules that would allow such recoverability, arguing that in this case “it would have neutralised the Post Office’s strategy to just keep driving up costs on the claimants side.”

What problem is regulation solving?

It was unsurprising to find that questions around the future of regulation for the litigation funding industry were a regular occurrence at LF Dealmakers, with the event taking place only a few days on from the House of Lords’ debate on the Litigation Funding Agreements (Enforceability) bill. From the opening panel to conversations held in networking breaks between sessions, speakers and attendees alike discussed the mounting pressure from government and corporate opponents of third-party funding.

The view from the majority of executives at the event seemed to revolve around one question, which was succinctly put by Ben Moss from Orchard Global: “What are the specific issues that require regulation, and what is the evidence to support those issues?”

This question became somewhat of a rallying cry throughout the conference, with suggestions of increased scrutiny and oversight being turned back on the industry’s critics who make claims of impropriety without citing evidence to back up these claims. Whilst several speakers referenced the recent LFJ poll that found a broad majority are open to the potential for new regulation, Ben Knowles from Clyde & Co described a lot of the discourse around the issue as “a fairly partisan debate.”

Among the few speakers in attendance who offered a contrasting view on regulation, Linklaters’ Harriet Ellis argued that “regulation done right would be good for the industry.” However, even Ellis acknowledged that any rules would have to be carefully crafted to provide a framework that would work across the wide variety of funded disputes, saying that a “one size fits all approach does raise issues.”

Regarding the government’s own approach to the issue through the draft legislation making its way through parliament, all of the executives in attendance praised lawmakers’ attempts to find a solution quickly. Alongside these government-led efforts, there was also a feeling among legal industry leaders that funders and law firms have to be part of the solution by promoting more education and understanding about how litigation finance works in practice. Richard Healey from Gately emphasised the need for firms to engage in “hearts and minds work” to change wider perceptions, whilst Harbour’s Maurice MacSweeney emphasised the need to “create the environment where law firms and funders can flourish.”

Innovation through collaboration

Outside of the narrow debate around legislation and regulation, much of the conference was focused on the speed at which litigation finance continues to evolve and create new solutions to meet complex demands from the legal industry. This was perhaps best represented in the way speakers from a variety of organisations discussed the need for a collaborative approach, with executives from funders, insurers, law firms, investors and brokers, all discussing how the industry can foster best working practices.

The interplay between the insurance and funding industry was one area that offered plenty of opportunity for insightful discussions around innovation. Andrew Mutter from CAC Speciality noted that even though “insurers are not known for being the fastest and moving the most nimbly,” within the world of litigation risk “the insurance markets are surprisingly innovative.” This idea of an agile and responsive insurance market was backed up by the variety of off the shelf and bespoke products that were discussed during the conference, from the staples of After-The-Event and Judgement Preservation Insurance to niche solutions like Arbitration Default Insurance.

Delving into the increasingly bespoke and tailored approach that insurers can take when working with funders and law firms, Jamie Molloy from Ignite Speciality Risk, described how there are now “very few limits on what can be done by litigation insurers to de-risk.” Whilst there is sometimes a perception that insurers are competing with funders and lawyers for client business, Tamar Katamade at Mosaic Insurance offered the view that it is “more like collaboration and synergy” where all these parties can work together “to help the claimant and improve their cost of capital and reduce duration risk.”

Class action fervour across Europe

Throughout both days of the LF Dealmakers conference, the volume and variety of class actions taking place across the European continent was another hot topic. However, in contrast to an event focused on the American litigation finance market, the common theme at last week’s forum was the wideranging differences between large group claims across individual European jurisdictions. In one of the most insightful panels, the audience were treated to an array of perspectives from thought leaders practicing across the UK, Spain, and the Netherlands.

The example of Spanish class actions provided an incredibly useful view into the nuances of European claims, as a country that is still in the process of implementing legislation to comply with the EU’s collective actions directive, but has already evolved routes for these types of actions over the last decade. Paul Hitchings of Hitchings & Co. described how the initiative to innovate has come “more from the private sector than the legislature”, with domestic law firms having become “experienced with running massive numbers of parallel claims” as an inefficient, yet workable solution. Hitchings contrasted Spain’s situation with its neighbouring jurisdiction of Portugal, which he argued has been comparatively forward thinking due to the country’s popular action law.

Speaking to the Dutch class actions environment, Quirijn Bongaerts from Birkway, argued that the “biggest game changer” in the country was the introduction of a real class actions regime in 2020. Bongaerts explained that the introduction of this system allowed for “one procedure that fits all types of claims”, which allows not only claims for damages, “but also works for more idealistic cases such as environmental cases and ESG cases.”

LFJ would like to extend our thanks to the entire Dealmakers team for hosting such an engaging and insightful event, which not only offered attendees a view into the latest developments in litigation finance, but also created a plethora of networking opportunities throughout both days. LFJ has no doubt that after the success of the inaugural LF Dealmakers European edition, a return to London in 2025 will cement the conference as a must-attend feature in the litigation funding events calendar.

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The Dangers of Retrospective Legislation in Litigation Funding

By John Freund |

The debate around whether the Litigation Funding Agreements (Enforceability) Bill should be retrospective is a complex one, with valid arguments on both sides. A recent op-ed makes the case that retrospectivity poses significant dangers and unfairness.

Writing in LegalFutures, Jeremy Marshall, Chief Investment Officer of Winward UK, argues that the core issue is whether it is unfair to allow litigation funders to rely on contractual agreements that were freely entered into by both parties, even if those agreements were based on a mistake of law.

Marshall claims that the common law right to recover money paid under a mistake only applies when the mistake led to one party receiving an unintended benefit. In the case of litigation funding, the only benefit that has accrued is the one that was explicitly drafted into the contract. Allowing retrospectivity would open the door to satellite litigation and unreal counterfactuals, according to Marshall.

Claimants who have already received funding and won their cases are now arguing for the "right" to renegotiate and keep all the proceeds for themselves. But what about the funders' arguments that cases may have gone on longer or become more expensive than intended? Fairness demands that both sides' positions be considered.

Marshall insists that the true drawback in retrospectivity is the inherent danger of prejudicing one party to the exclusion of the other, or conferring an unexpected benefit to one party at the expense of the other. Ironically, this is precisely what those challenging the bill are attempting to do. So while the debate is a complex one, one can make a compelling case that retrospectivity in litigation funding poses significant dangers and unfairness.

ReplyForward

The CJC’s Review of Litigation Funding Will Have Far-Reaching Effects

By John Freund |

The following is a contributed piece by Tom Webster, Chief Commercial Officer at Sentry Funding.

Reform is on its way for the UK’s litigation funding sector, with the Civil Justice Council firing the starting gun on its review of litigation funding on 23 April.

The advisory body set out the terms of reference for its review, commissioned by lord chancellor Alex Chalk, and revealed the members of its core working group.

The review is working to an ambitious timetable with the aim of publishing an interim report by this summer, and a full report by summer 2025. It will be based on the CJC’s function of making civil justice ‘more accessible, fair and efficient’.

The CJC said it will set out ‘clear recommendations’ for reform in some areas. This includes consideration of a number of issues that could prove very significant for funders and clients. These include:

  • Whether the sector should be regulated, and if so, how and by whom;
  • Whether funders’ returns should be subject to a cap; and if so, to what extent;
  • The relationship between third party funding and litigation costs;
  • The court’s role in controlling the conduct of funded litigation, including the protection of claimants and ‘the interaction between pre-action and post-commencement funding of disputes’;
  • Duties relating to the provision of funding, including potential conflicts of interest between funders, lawyers and clients;
  • Whether funding encourages ‘specific litigation behaviour’ such as collective action.

The review’s core working group will be co-chaired by CJC members Mr Justice Simon Picken, a Commercial Court judge, and barrister Dr John Sorabji. The four other members are:

  • High Court judge Mrs Justice Sara Cockerill, who was judge in charge of the commercial court 2020 – 2022, and who is currently involved in a project on third party funding for the European Law Institute;
  • Academic and former City lawyer Prof Chris Hodges, chair of independent body the Regulatory Horizons Council which was set up to ensure that UK regulation keeps pace with innovation;
  • Lucy Castledine, Director of Consumer Investments at the Financial Conduct Authority; and
  • Nick Bacon KC, a prominent barrister and funding expert who acts for both claimants and defendants

The CJC had said that it may also bring in a consumer representative, as well as a solicitor experienced in group litigation.

In a sign that the review seeks to be informed by a wide range of views, the CJC has also extended an invitation for experts to join a broader consultation group, which will directly inform the work of the review and provide a larger forum for expert discussion. Meanwhile the advisory body has said there will also be further chance ‘for all to engage formally with this review’ later this year.

Given the broad remit of the review and significant impact that its recommendations may have on the litigation funding industry, litigation funders, lawyers and clients would be well advised to make the most of these opportunities to contribute to the review.

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Balancing Risk and Reward in Litigation Finance: Lessons from High-Profile Case

By John Freund |

The following is a contributed piece by Jeff Manley, Chief Operating Officer of Armadillo Litigation Funding.

The allure of substantial returns from mass tort litigation has historically tempted law firms and their third-party financiers to commit resources to speculative cases. While investing strongly in speculative torts certainly has its time and place, prevailing trends highlight the necessity of certain risk management practices. The unpredictable outcomes of high-profile cases, like the Camp LeJeune water contamination lawsuits, accentuate the imperative for a discerning approach to case selection and the strategic diversification of portfolios.

Balancing Opportunity and Prudence in Speculative Torts

Early-stage speculative torts like the Zantac litigation represent a blend of potential and caution. (In re Zantac (Ranitidine) Products Liability Litigation, 2021). Initially, Zantac cases drew significant attention from law firms with projections of substantial compensation figures. However, the legal complexities and subsequent valuation adjustments highlighted the disparity between initial projections and actual compensation figures realized, reinforcing the need for meticulous risk assessment in speculative torts. While similar cases have captivated law firms and financiers with their substantial projections, they also underscore the importance of an exhaustive risk assessment—demonstrating how initial excitement must be tempered with diligent legal analysis and realistic valuation adjustments.

Navigating the Complex Terrain of Camp Lejeune Litigation

The Camp Lejeune water contamination lawsuits represent promising ventures for financiers and mass tort firms to affirm their moral duty by advocating for those who served our country. However, these cases also carry lessons on the pitfalls of overzealous investment without careful scrutiny. The drawn-out nature of the litigation serves as a reminder that while the pursuit of justice is noble, it must be balanced with sound risk management to ensure long term firm stability.

Endurance in Talc Litigation: A Testament to Long-Term Vision

The protracted legal battles surrounding talcum powder’s health risks underscore the necessity for long-term strategic planning in mass tort litigation. Firms must factor in the operational demands and the financial foresight to manage compounded interest on borrowed capital over extensive periods. Simultaneously, it’s critical to sustain investment in new torts, ensuring a balanced portfolio that accommodates both ongoing cases and emerging opportunities. This balanced approach underpins the stamina needed to endure through a decade-long commitment, as exemplified by the talc litigation.

Understanding Returns in the 3M Earplug Litigation

The 3M earplug litigation concluded within a standard timeframe, yet the distribution of settlements spans several years, offering more modest financial returns than many anticipated. This outcome serves as a pragmatic reminder of the nuanced nature of mass tort settlements, where significant payouts are not always immediate or as substantial as predicted. Nonetheless, this reinforces the value of prudent risk management strategies that account for longer payout terms, ensuring a stable financial forecast and the firm's resilience in the face of lower-than-expected returns.

Strategic Portfolio Diversification

Given these varied experiences, it is imperative that law firm owners and financial backers craft a robust case portfolio strategy. By balancing the mix of cases from speculative to those with a more established settlement trajectory, firms can better manage risk and ensure operational stability. Strategic diversification is not just wise—it’s a vital tactic to maintain resilience in the evolving landscape of the mass tort industry.

The Value of Expert Financial Partnerships

Choosing a reputable and experienced litigation finance partner is essential for law firms aiming to effectively balance their case portfolios. A seasoned funding partner provides invaluable guidance in evaluating potential cases, assessing financial risks, and optimizing investment strategies. Their expertise in navigating the nuanced terrain of litigation finance is a critical asset.

Adopting a balanced portfolio strategy—carefully curated to include a variety of torts at different development stages—provides a more stable foundation than pursuing an "all-in" strategy on a single high-potential tort. This method not only reduces dependency on the success of any single case but also positions the firm more favorably in the eyes of prudent lenders.

Recent high-profile cases in the mass tort arena, like those mentioned above, serve as potent reminders of the inherent uncertainties in litigation finance. For law firm owners and their financial backers, the path forward demands a nuanced view of risk, underscored by strategic portfolio diversification and the cultivation of partnerships with experienced financing entities. By adopting these principles, stakeholders can safeguard their investments against the capricious nature of mass litigation, securing a resilient and prosperous future in the challenging yet rewarding domain of legal finance.

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Westfleet Advisors Announces James Batson as New Chief Operating Officer

By John Freund |

Westfleet Advisors, the premier U.S. litigation finance advisory firm, is delighted to announce the appointment of James "Jim" Batson as its new Chief Operating Officer. Mr. Batson, widely recognized as a leader in litigation finance, brings an extensive portfolio of expertise, including nearly a decade at Omni Bridgeway, most recently as its US Co-CIO, and a former partnership at Liddle & Robinson.

"We are thrilled to welcome Jim to Westfleet," said Charles Agee, Founder and CEO of Westfleet Advisors. "His impressive track record and deep industry knowledge align perfectly with our strategic goals. Jim's leadership is set to drive significant growth, reinforcing Westfleet's role as an essential advisor in the increasingly complex litigation finance market."

"At a time when the litigation finance industry has reached a critical juncture, requiring sophisticated understanding to navigate its complexities, I am excited to join Westfleet Advisors," said Mr. Batson. "The industry's growth and the diversification of funding options have made it imperative for clients to seek knowledgeable and experienced advisors. Westfleet's long-established expertise in advising on deal structures, pricing, and market trends positions us uniquely to guide our clients to the most advantageous outcomes. I look forward to advancing our mission to deliver unmatched advisory services in this dynamic sector."

Mr. Batson's prior roles have honed his skills in developing growth strategies and enhancing client services, with a strong focus on operational excellence and strategic advisory for complex legal disputes.

"Jim's deep understanding of the industry's needs and his proven leadership abilities will be instrumental as we expand our advisory services and deepen our engagement with the market," added Agee.

About Westfleet Advisors

Westfleet Advisors is the leading litigation finance advisor in the United States. Founded in 2013, the company has been instrumental in promoting transparency and efficiency in the litigation finance market. With a team of seasoned experts active since 1998, Westfleet provides clients and their attorneys with essential resources and insights necessary for navigating successful litigation financing.

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Legal-Bay Legal Funding Announces Dedication to Focus on Securities Fraud and FINRA Arbitrations

By John Freund |

Legal-Bay LLC, The Lawsuit Pre Settlement Funding Company, announced today its focus on funding Securities Fraud and FINRA Arbitration cases for the remainder of 2024 and beyond. The legal funding firm has noticed a major deficiency in the legal funding sphere for specialized funding options for Securities Fraud cases and FINRA arbitrations, as these are some of the toughest cases to approve and understand within legal funding.

However, with two decades of experience in funding complex cases of all natures with creative yet straightforward funding solutions, Legal-Bay is widely recognized throughout the lawsuit funding industry as one of the "best lawsuit loan companies" or "go-to funder" for securities fraud cases and FINRA arbitrations against major brokerage firms.

Whether you are a plaintiff that lost a good majority of assets or a law firm looking for case costs to fight a large brokerage firm, or someone who lost assets due to fraud and needs money now, Legal-Bay can help you. Please visit our website geared specifically toward these types of cases, at: https://lawsuitssettlementfunding.com/securities-fraud.php 

Legal-Bay's team of experts and underwriting department can quickly evaluate the validity of your claim(s) and potential case value and provide you with the capital you need to see your case through. Too often, plaintiffs or lawyers simply cannot wait all the years these complex fraud cases can drag out without obtaining some sort of large cash advance in the meantime.

It is for this reason that Legal-Bay has committed extensive capital to funding plaintiffs and law firms that find themselves in dire financial situations due to instances of securities fraud. To learn more, feel free to call Legal-Bay today to speak with one of our courteous and knowledgeable staff, at: 877.571.0405.

Chris Janish, CEO, commented, "Securities or stock brokerage fraud cases are some of the most difficult in the legal finance industry to evaluate and fund. It is without question that our firm is one of the few niche funders in this space that has the expertise to evaluate your FINRA arbitration case quickly and accurately for settlement value and for needed cash advance approval."

To apply right now for your Securities Fraud pre-settlement cash advance or FINRA arbitration settlement cash advance, please visit Legal-Bay's page dedicated solely to these types of cases, at: https://lawsuitssettlementfunding.com/securities-fraud.php 

You don't have to wait for the money you deserve. Clients only have to pay back the Securities Fraud advance or FINRA Arbitration case loan if and when they win their case, meaning the money is risk-free. All you need in order to apply for the quick and immediate cash relief—typically provided within 24-48 hours following approval—is a lawyer. Even if you don't yet have a lawyer, Legal-Bay can help you with that too, as Legal-Bay works with the country's top Securities Fraud attorneys who will fight for you to ensure you receive the compensation you deserve.

Legal-Bay is a leader in personal injury lawsuit loans or commercial litigation settlement loans, as commonly referred to by plaintiffs. Although referred to as loans for settlements, the legal funding advances are not pre settlement loans at all, as they only need to be paid back if your case is won. FINRA arbitrations are considered commercial settlement funding and most typical litigation funding firms do not even consider these cases, however, Legal-Bay is happy to freely evaluate your case for funding. Funds can be used for personal use or for paying for expert witnesses or trial costs prior to an arbitration hearing.

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Geradin Partners Opens Paris Office with the Hire of Partner Marc Barennes

By John Freund |

After opening offices in Brussels in 2015, London in 2021, and Amsterdam in 2023, Geradin Partners continues its European expansion with the launch today of its Paris office with the hires of former EU official and competition litigator Marc Barennes and his team. 

Founding partner, Damien Geradin comments: 

“We’re delighted that Marc accepted our offer to open our Paris office. France is a key jurisdiction in Europe, and Marc and his team will help us achieve three goals. First, it allows us to bolster our competition and digital regulation practice. The Paris office will allow us to better serve our clients in France, in particular those in need of strategic advice regarding the DMA (Digital Markets Act), DSA (Digital Services Act) and EU competition law. It will also assist our international clients in interactions with the French competition authority. Second, given his unique experience within the competition authorities and courts, Marc adds further strength to our ability to pursue high-stakes appeals and interventions in relation to competition authority decisions at the French and European levels. Third, Geradin Partners has brought major private actions in the courts, in particular against large tech firms in the United Kingdom and the Netherlands, while Marc has been a frontrunner in bringing collective actions in France. With Marc onboard, we will offer a choice between bringing a competition and DMA actions before the Dutch, English or French Courts, depending on which is best for each client”. 

Marc Barennes is a competition litigator with 20-plus years of experience. With over 15 years at the European Commission and the Court of Justice of the European Union, he brings unique expertise in competition law. During his time with European institutions, he was directly involved in more than 350 cases, including more than 70 of the most complex and high-profile European cartel, abuse of dominance, merger and State aid cases. Before joining Geradin Partners, Marc also gained experience over the past five years of damages actions through his role as Executive Director of a leading claim aggregator, and co-founding partner of the first French claimant firm specialized in class actions. Marc has also been a Lecturer at French School of Law, Sciences Po Paris since 2014 and has been a non-governmental advisor to the European Commission and/or the French and Luxembourgish competition authorities for the International Competition Network (ICN) since 2012. He is a member of both the Paris and New York bars. 

Marc Barennes added: 

“I’m honoured and delighted to join Geradin Partners and launch its Paris office. In only a few years, Geradin Partners has become the go-to European firm for all complex competition and digital regulation cases. It now comprises an exceptional team of 20 competition and digital regulation specialists, including five senior former competition agency officials, who work seamlessly on French, EU and UK high-stake cases. The many cases it has already successfully brought against large tech firms before the French, English and EU competition authorities and courts as well as the multi-billion damages claims it has filed against them in the Netherlands and England are a testament to its expertise and its innovative approach to complex competition issues, especially in the digital space. I look forward to assisting French companies both in benefiting from those damage actions and in their most complex cases before the French and EU competition authorities and courts. Our ambition is to expand the Paris office rapidly: applications at the partner and senior associate levels are welcome”. 

About Geradin Partners

Geradin Partners was founded by competition and digital regulation expert Damien Geradin, who has spent the past 25 years working as an attorney, while combining this with an academic career. With a team of seven partners and a total of 20 competition experts based in Paris, Brussels, London and Amsterdam, Geradin Partners is the first European boutique to offer seamless competition law and digital regulation services in major cases throughout the EU and the UK. It is recognized by its clients and peers for its commitment to excellence, as well as for its innovative and strategic approach. 

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SHIELDPAY LAUNCHES GUIDE TO EFFECTIVE LITIGATION SETTLEMENT DISTRIBUTION FOR LEGAL SECTOR

By John Freund |

In the face of increasing demand for better strategies for litigation compensation payments, Shieldpay, the payments partner for the legal sector, has created the Blueprint to Distribution’a step-by-step guide that shares best practice on how to scale efficiently and distribute best-in-class payments for claimants. 

The huge growth in litigation in recent years (total value of UK class actions alone rose from £76.6 billion in 2021 to £102.7 billion in 2022) means the legal sector must adopt strategies that will enable it to scale efficiently with the growing demand. In 2019, the average litigation revenue for a firm in the UK Litigation 50 was £82.4m. That figure had reached £110m by 2023 and is widely predicted to follow this upward trajectory.

Settlement payouts can be a complex and lengthy process without the right support and guidance. The process of distributing funds can often be overlooked until the settlement is finalised, leading to sudden complications, risk concerns and a huge administrative burden on a tight deadline.

Litigation cases are by no means finished once a settlement has been agreed. Depending on the size and complexity of the case, the distribution process can take many months, if not years. Most claimants will want the compensation due to them as quickly as possible, so firms need to plan for a successful and seamless distribution of funds well ahead of time to avoid frustration and uncertainty for their clients.

To help lawyers navigate litigation payments and adopt strategies that will reassure and build trust amongst claimants, Shieldpay’s ‘Blueprint to Distribution’ guide goes through the critical steps teams need to take throughout the case to ensure claimants receive their funds quickly and efficiently. The key to success is planning the distribution process as early as the budget-setting phase, where the payout is considered as part of the case management process to optimise for success. This process also includes developing a robust communications strategy, collecting and cleansing claimant data, and choosing the right payments partner to handle the settlement distribution.

In its guidance for legal practitioners on delivering a successful payout, ‘Blueprint to Distribution’ highlights the need for payment considerations to be aligned and collaborative throughout the lifecycle of a case, not left to be worked out at the end. Working with the right partner enables firms to understand how to design and deliver an optimal payout, taking into account the potential long lead times involved from the initial scoping of a case to the actual payout, with refinements and changes likely to occur to the requirements as a case unfolds. 

Claire Van der Zant, Shieldpay’s Director of Strategic Partnerships, and author of the guide, said: “Last year, the conversation amongst the litigation community was understandably focused on how to get cases to trial. Delays to proceedings arising from evolving case management requirements, including the PACCAR decision, caused delays and frustration amongst those actively litigating cases and striving for final judgements. 

“Fundamentally, legal professionals want to deliver justice and good outcomes for claimants. To do that, we need to think bigger than just a blueprint to trial, and consider a ‘Blueprint to Distribution’, because once a final judgement has been delivered, it doesn’t end there. Delivering a successful distribution requires advance planning and consideration to be effective and efficient. This step-by-step guide aims to help law firms, administrators and litigation funders deliver the best payment experience and outcome for claimants.” 

For the full ‘Blueprint to Distribution’ guide visit www.shieldpay.com/blueprint-to-distribution

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An LFJ Conversation with Jonathan Stroud

By John Freund |

Jonathan Stroud is General Counsel at Unified Patents, where he
manages a growing team of talented, diverse attorneys and oversees a
docket of administrative challenges, appeals, licensing, pooling, and
district court work in addition to trademark, copyright,
administrative, amicus, policy, marketing, and corporate matters.


Prior to Unified, he was a patent litigator, and prior to that, he was
a patent examiner at the USPTO. He earned his J.D. with honors from
the American University Washington College of Law; his B.S. in
Biomedical Engineering from Tulane University; and his M.A. in Print
Journalism from the University of Southern California. He enjoys
teaching, writing, and speaking on patent and administrative law and
litigation finance.

Unified is a 350+ international membership organization that seeks to
improve patent quality and deter unsubstantiated or invalid patent
assertions in defined technology sectors (Zones) through its
activities. Its actions are focused broadly in Zones with substantial
assertions by Standards Essential Patents (SEP) holders and/or
Non-Practicing Entities (NPEs). These actions may include analytics,
prior art, invalidity contests, patentability analysis, administrative
patent review (IPR/reexam), amicus briefs, economic surveys, and
essentiality studies. Unified works independently of its members to
achieve its deterrence goals. Small members join for free while larger
ones pay modest annual fees.

Below is our LFJ Conversation with Jonathan Stroud:

1)   Unified Patents describes itself as an "anti-troll." You claim to
be the only entity that deters abusive NPEs and never pays. Can you
elaborate?

In the patent risk management space, Unified is the only entity that
works to deter and disincentivize NPE assertions.  Because of the
expense and economics of patent litigation, parties often settle for
money damages less than the cost of defending themselves, paying the
entity, often for non-meritorious assertions. This allows them to
remain profitable, thus fueling and incentivizing future assertions,
regardless of merit. Unified is the only solution designed to counter
that dynamic.  That is why Unified never pays NPEs. This ensures that
Unified never incentivizes further NPE activity. By focusing on
deterrence, Unified never acts as a middleman, facilitating licensing
deals between NPEs and implementors.

2) How does Unified Patents work with litigation funders, specifically?

As many NPE suits are funded or controlled by third parties, we are
often called to consult on and seek to understand litigation funding
and the economics of assertion.  Among other things, we provide filing
data, funding information, reports, and other work related to funding
and also run a consulting business related to negotiations and aspects
of dealmaking affected by litigation funding.  For example, we have
helped identify that at least 30% of all U.S. patent litigation filed
in recent years has been funded (up through 2020), through one
mechanism or another.  We will continue to work to understand the
marketplace and transactions, and endeavor to provide the best insight
into the marketplace that our data affords.

3)  With Judge Connolly's recent ruling, disclosure has become a hot
topic in the US. How do you see this ruling impacting IP litigation
going forward?

Well before Chief Judge Connolly's actions, litigation funding
disclosure has been a topic of discussion at the judicial conference,
among other judges, and amongst those implementing and revising the
Federal Rules of Civil Procedure, not to mention Congress and the SEC.
The Judicial Conference has been called to revise the disclosure rules
for over a decade.  Similar disclosure orders or rules applied in New
Jersey, California, Michigan, and another dozen district courts
nationwide, in addition to numerous rulings on admissibility and
relevance in Federal and state courts stretching back decades.  Chief
Judge Connolly's order has attracted outsized interest in the patent
community in particular.  It quickly exposed some of the 500 or so
cases filed annually by IP Edge as funded, as well as the high number
of patent plaintiffs in Delaware.   Calls for disclosure did not begin
with Judge Connolly; has been a continuing ongoing debate stretching
back decades. Insurance disclosures go back to the early 70s, and
other types of loans or financial instruments are already subject to
certain disclosure rules, in court, governmentally, or by regulators.
Moving forward, the increasing prevalence of litigation funding and
the rising awareness among the judiciary and bar will mean fitful
district-specific under- and over-disclosure until a national rule is
put in place through the Federal Rules of Civil Procedure.  It's
inevitable.  It's just a matter of time.

4) Insurers seem to be shying away from judgment preservation
insurance at the moment--is this a trend you see continuing, and how
might this impact IP litigation?

Insurance markets are often dominated by sales-side pressures and so
are susceptible to irrational exuberance and overpromotion of certain
policies.  Couple that with competition amongst brokers to offer
attractive terms for a "new" product, and you have pressures that have
driven down offered rates, a trend that seems to be reversing itself
now. To be sure, judgment preservation has existed in some form for
many years through other funding and insurance sources, and you've
always been able to buy and sell claims and judgments on appeal.

The increased emphasis on judgment preservation insurance seems driven
by a handful of brokers successfully selling rather large policies,
coupled with a glut of interest; my understanding is that some of the
recent (and predictable) remand on appeal have dampened
the enthusiasm of that market a tad, but that really just means rates
returning to reasonable levels (or at least growing resistant to
sales-side pressure).  The small JPI market should stabilize,
affording successful plaintiffs the option, and in turn extending
appellate timelines and recovery timelines, especially in
higher-profile damages award cases.  It will generally prevent
settlements below the insured threshold. It should also provide some
incentive to sue and to chase large damages awards in the first place,
if it becomes clear that JPI will be available after a judgment,
allowing for less well-capitalized plaintiffs to recover earlier and
avoid binary all-or-nothing outcomes.

Additionally, the Federal Circuit and other appellate courts will
eventually grapple with the "disclosure gap." That is, the Federal
Rules of Civil Procedure insurance policies since the 1970s must be
disclosed at the trial level, but not yet at the appellate level; but
the same concerns that animated the 1970 amendments to the FRCP now
apply on appeal, with the rise of JPI.  Circuits will have to
grapple with adopting disclosure rules for insurance policies
contingent upon appeal.

5)   What trends are you seeing in the IP space that is relevant to
litigation funders, and how does Unified Patents' service fit into
those trends?

Early funding stories were dominated by larger cases and portfolios,
but we are now seeing a trend of much smaller cases being funded, and,
in the case of both IP Edge and AiPi Solutions, with certain patent
aggregators getting creative and funding entire suites of very small
nuisance cases.  We see funding now at all levels, from the IP Edges
of the world to the Burfords, and there is a trend toward investing in
pharmaceutical ANDA litigation and ITC cases.  Both should continue,
which should extend cases, increase the duration and expense of
litigation, and should drive more licensing.  Unified will continue to
seek to deter baseless assertions and will continue to identify,
discuss, and detail the structures, funding arrangements, and suits
related to litigation funding, and continue to show how much funding
is now dominating U.S. patent litigation, to the extent it is knowable.

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Launch of New Subsidiary, Orington & Partners

By John Freund |

Orington Capital (“OC”), today launched an international, Australian headquartered subsidiary, Orington & Partners (“O&P”). O&P specialises in management consulting, legal and dispute financing advisory, restructuring and corporate advisory mandates across the globe including Australia, the United States, India, UAE, Singapore, and the United Kingdom. In addition, O&P provides investment banking and capital raising services in India.

O&P has been founded by entrepreneurs and corporate professionals combining vibrancy and rigour.  The firm prides itself on being new-age that understands how rapidly changing technology impacts businesses. O&P’s target market are mid-market businesses that are seeking a collaboration-first, solutions approach. As a result we are flexible with how we package our solutions to tailor to each business's needs and financial position. 

The firm is led by Kashish Grover, Managing Partner and CEO, and supported by Orington Capital which provides broad global expertise in owning and investing in various businesses/assets, a larger footprint and access to its investment balance sheet in which few professional service firms are fortunate enough to gain access to.

“I’m extremely excited to be joining Orington & Partners as a Founding Partner, in which we look to provide to an underserved mid-market a breadth of exceptional strategy, transactions and legal finance advisory services, unrivalled by any other in the market. Additionally, our experience combines international best practices with new-age thinking understanding that technology continues to evolve and change the business landscape. ” Mr Grover expressed.

Wei-Khing Seow (Executive Chair of O&P and Managing Director of OC) commented: “We are fortunate to bring on board such an amazing talent and leader in Kashish. He brings a truly exceptional combination of integrity, passion for listening and learning, as well as an unparalleled level of pragmatic smarts.

O&P is positioned to service clients uniquely as a one-stop shop that can help your business grow and improve, whether it be organically and/or inorganically. Lastly, we will help your business create value and monetise legal assets that few other firms in the world can do.”

Please see Orington & Partners' website for a list of specific services and jurisdictions we provide services to. We welcome both direct enquiries and referrals.

About Orington & Partners

Orington & Partners is an Australia headquartered, international firm specialising in management consulting, legal and dispute financing advisory, restructuring and corporate advisory mandates across the globe including Australia, the United States, India, UAE, Singapore, and the United Kingdom. We also provide investment banking and capital raising services in India.  Visit orington.com/orington--partners for further details.

About Orington Capital

Orington Capital is an Australian family owned and operated investment firm. Established in 2021. Its business holdings and activities originated in Australia but are increasingly international. Uniquely, Orington invests holistically and unconstrained across the entire capital and investment structure in both private and public markets. Orington provides bespoke capital and can attach dedicated business support service solutions to its investments and portfolio companies.  ACN: 664 474 640. Visit orington.com for further details.

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A Comprehensive Summary of the Lords’ Debate on the Litigation Funding Agreements (Enforceability) Bill

By John Freund |

On Monday, 15 April, the House of Lords convened for a second reading of the Litigation Funding Agreements (Enforceability) Bill, with peers debating the text of the draft legislation as well as the government’s plans for a wider review of litigation funding in England and Wales. LFJ has read through the full transcript of the Lords’ debate and has provided a thorough summary, highlighting key takeaways from the speeches made by each of the members.

Lord Stewart of Direlton, the Advocate-General for Scotland, opened the second reading of the bill by providing a summary of the Supreme Court’s PACCAR decision, its effects on litigation funding agreements (LFAs) and the purpose of the bill in restoring the enforceability of these agreements. Unsurprisingly, Lord Stewart referenced the use of third-party funding in the Post Office Horizon case and explained how “for many claimants, LFAs are not just an important pathway to justice; they could be their only route to redress against well-resourced corporations with deep pockets.”

Addressing the retrospective effect of the legislation, Lord Stewart explained that if the bill had been drafted without this condition, “there would be uncertainty as to the enforceability of agreements entered into before the PACCAR judgment but where the claim is concluded after the Act comes into force.” He added that this provision “will also ensure that the contractual rights and obligations agreed under LFAs entered into before the Supreme Court’s judgment continue to have effect as intended.”

Lord Stewart concluded his speech by reaffirming the government’s position to have the Civil Justice Council undertake a wider review of litigation funding in England and Wales, which look at a range of issues including “the need for greater safeguards for claimants, regulation of the sector and the possibility of caps on the returns made to funders.” He stated that an interim report is due to be completed this summer, with the final report to be published summer 2025.

Lord Mendelsohn was the first peer to comment on the bill, arguing that there were four points that should be considered in the debate around third-party funding. Firstly, he questioned whether fees and costs imposed by funders “are too onerous on the people most in need of being the beneficiaries of whatever compensation or arrangements come at the end.” Secondly, he argued that rather than primarily being a service used by those without the resources to pursue meritorious claims, arguing that it is mainly used by those who already have capital as “a good way of de-risking legal exposure in litigation.”

Lord Mendelsohn’s third point was that third-party funding has not widened access to justice in the way the government describes, arguing that lawmakers and the forthcoming review should “focus on making sure that we properly identify which elements extend access to justice.” Finally, he built on these previous points by saying that whilst litigation funding is “a massively growing, active economic market that will achieve many things”, the government should explore “other funding mechanisms” that will achieve the goal of opening access to justice.

In contrast, Lord Thomas of Cwmgiedd described the bill as “an enormous achievement”, and argued that third-party funding brought tremendous value to not only individuals who could not secure legal aid but also those small and medium-sized businesses who lack the capital to pursue claims. Looking at the potential for new regulations governing litigation funding, Lord Thomas argued that either self-regulation or “simply agreeing some principles and leaving the courts to police what is effectively in front of them” may be the ideal solution.

Lord Arbuthnot of Edrom, who declared his interest as a member of the Horizon Compensation Advisory Board, highlighted the crucial role that third-party funding had played in supporting the sub-postmasters litigation. Addressing the issue of the funder’s remuneration in that case, Lord Arbuthnot argued that the were not “unfairly recompensed”, arguing that they had taken on “the immense risk of taking on the country’s most trusted brand, the Post Office, which was backed by the bottomless purse of the taxpayer.”

Lord Carlile of Berriew said that he strongly supported both the bill and the principles behind it, but noted that he had “two lurking concerns.” The first concern raised was that “lawyers are regulated by statute but litigation funders are not”, arguing that the government should move to provide statutory regulation unless funders are themselves “willing to move voluntarily to a proper level of regulation.” His second concern was focused on whether the bill in any way violated the European Convention on Human Rights, stating that he had been the target of “very opportunistic lobbying” around this issue.

Lord Wolfson of Tredegar also expressed his support for the bill, explaining that the government must strike a difficult balance between ensuring access to justice whilst also avoiding situations where “litigants given a raw deal by one-sided funding agreements.” He did express one concern about the retrospective nature of the bill, arguing that it could harm litigants who had entered into new funding agreements following the PACCAR decision and that this legislation would revive the original funding agreement. Lord Wolfson acknowledged that whilst this was clearly “not the intention of the Bill”, he stated that he was “confident that a solution can be found to this perhaps niche, but none the less important, issue.”

In the most scathing statement of opposition to the bill, Baroness Jones of Moulsecoomb said that she was “deeply suspicious” of the drafted law, and argued that it appeared to be designed to primarily protect funders’ interests, “without any consideration of the impact that it will have on the claimants being funded.” She described the current bill as part of a wider story of governmental failure to address the need for proper legal aid and access to justice, arguing that it had been “privatised and turned into yet another arena for exploitation by hedge funds and financiers.” Baroness Jones closed her opposition to the bill by describing it as “extremely lazy”, arguing that the government had not “put any energy into thinking about a better solution.”

Lord Meston welcomed the bill as a solution to the negative effects of the PACCAR ruling, arguing that wider concerns about the litigation funding industry “surely must predate the Supreme Court decision and are unlikely to be cured or made worse by this Bill.” Considering the future opportunity for new rules governing third-party funding, Lord Meston argued that “If regulation is to remain with no more than a light touch, it is all the more important that sufficient safeguards exist and are understood to protect the consumer.” 

Lord Sandhurst joined with other peers in congratulating the government on its swift actions to bring the new legislation forward, arguing that without a viable legal aid framework, third-party funding stands as “an important plank of our justice system.” Echoing points made in previous speeches, Lord Sandhurst acknowledged the “ensure that payments recovered by the funder are reasonable for the risks involved and the money laid out.” However, he similarly affirmed that those concerns “are not reasons for allowing the PACCAR decision to stand.”

Lord Trevethin and Oaksey, who declared his interest having previously advised funders, joined the broad consensus of the chamber in lamenting the state of legal aid and the resulting negative effects on access to justice. Agreeing with Lord Arbuthnot, he also raised the importance of funding in the plight of the sub-postmasters and concluded that “the consequences of the PACCAR decision are not benign, and the Government are right to act in the way that they have.” In a detour from the main focus of the debate, he also took the opportunity to address issues with the existing 2013 DBA Regulations and called on the government to provide further information on progress towards reforming these regulations.

Lord Marks of Henley-on-Thames offered a familiar analysis of the crucial role played by third-party funding in the case of the sub-postmasters, but once again expressed the necessity of balancing the risks that funders take without placing an unjust cost on claimants in terms of the final compensation they receive. He went on to state that whilst the bill rightly reverses the negative effects of PACCAR, it does not negate the need for a wider review of third-party funding or the need to address the systemic weaknesses in the current system which neither sets limits on funder’s recovery nor incentivises the reduction of legal costs.

Lord Marks went on to say that these issues along with the retrospective nature of the bill require careful consideration, and that “It would be wise to consider what amendments, if any, might improve this legislation.”

In the final contribution to the debate, Lord Ponsonby of Shulbrede joined in the support for the bill but focused most of his speech on the necessity of the wider review into litigation funding in England and Wales, beginning his remarks by noting that of the approximately 70 funders operating in the country, “only 16 are members of the self-regulating industry body, the Association of Litigation Funders.” He went on to say that whilst it was true the funder had taken a large amount of risk supporting the sub-postmasters case, it appeared that in comparison to the compensation that the victims received, “the funders arguably made an excessive profit .”

Returning to the floor to close the debate, Lord Stewart addressed questions raised by his fellow peers and noted their “concerns that access to justice on behalf of a less well-funded party or individual should not come at the expense of excessive profits for those responsible for funding.”

Following the second reading of the bill, it will now be “committed to a Committee of the Whole House.” 

The full transcript of the debate can be read here.

Review of Litigation Funding Could Address Issue of Recoverability

By John Freund |
With the Ministry of Justice’s announcement that its plans to address the PACCAR decision would include a wide-ranging review of the litigation funding sector, industry commentators and analysts are already discussing what reforms this review might induce. In an opinion piece for The Law Society Gazette, Rachel Rothwell examines the issue of whether litigation funding fees should be recoverable or not. Placing the question within the context of the government’s plans for a broader review of litigation funding in England and Wales, Rothwell suggests that the issue of recoverability may be one area that funders are eager to see discussed and even targeted for reform. Rothwell points out that under the current civil justice system, a claimant who receives third-party funding and is then successful in their claim will find themselves receiving less than the full measure of justice. Using the example of a situation where funder’s commission is 40% of awarded damages, Rothwell argues that whilst a claimant “argument has been 100% vindicated in the courts, you have not received full justice, because you have only received 60% of what the judge decided you had lost as a result of the defendant’s wrongdoing.” Rothwell goes on to contrast this situation with the recoverability options available when claims are pursued through arbitration, highlighting the High Court’s rulings in Essar Oilfields Services Limited v Norscot Rig Management Pvt Ltd [2016] EWHC 2361 (Comm) and Tenke Fungurume Mining v Katanga Contracting Services [2021] EWHC 3301. In both these matters, the High Court ruled that arbitrators have the ability and discretion to award funding costs where it is appropriate. Rothwell concludes by saying that the forthcoming review provides an opportunity to address this imbalance between litigation and arbitration, “by recommending reform that could grant judges the same remit as arbitrators to award the costs of funding, where the conduct of the parties and the interests of justice dictate that that is the fair thing to do.”

Lord Macdonald: Sub-Postmasters’ Rights to Claim Additional Compensation “Would Be Extinguished” by Litigation Funding Bill

By John Freund |
Following the UK government’s introduction of the Litigation Funding Agreements (Enforceability) Bill to the House of Lords, there was widespread approval from litigation funders. However, it appears we are seeing the first signs of opposition to the proposed legal changes from members of the House of Lords, with the Post Office case once again coming to the forefront of the debate around the role of litigation funding. An article from The Telegraph, shared by Yahoo Finance, reveals that the government’s plan to reform rules affecting litigation funding agreements is receiving pushback, as one senior legal professional cautions that new legislation could harm any attempt by the sub-postmasters to reclaim additional compensation from Therium Capital Management, which funded the case.  The Telegraph’s article details a forthcoming letter, penned by Lord Macdonald KC, which cautions that the proposed rule change “removes the right” for the sub-postmasters to challenge the terms of the funding agreement. It is unclear whether this opinion is supported by other legal professionals in the House of Lords, but with the Litigation Funding Agreements (Enforceability) Bill being debated in the chamber today, we may soon learn more about the wider attitude of lawmakers towards the legislation.  In contrast to the position of Lord Macdonald KC, the article highlights comments from Therium’s Neil Purslow, who points out that there has “there has never been any attempt by the sub-postmasters to revisit the funding arrangement,” and that the suggestion “this Bill will end a bid to do so is disingenuous at best.” A spokesperson for the Ministry of Justice is quoted, saying: “The proposed legislation will ensure that litigation funding agreements affected by the Supreme Court’s judgment will remain enforceable, while also making sure claimants can continue to bring cases against larger and better-resourced corporations.”

Member Spotlight: Joshua Coleman-Pecha

By John Freund |

Joshua Coleman-Pecha is a senior international construction, infrastructure, and technology dispute specialist working in the MENA region. He is a qualified England & Wales Solicitor Advocate and Prince2 qualified project manager.

The majority of Coleman-Pecha's work has been in international arbitration and he has represented clients before arbitral tribunals convened under the ICC, LCIA and UNCITRAL rules. He has also acted for clients before the DIFC, English and Guernsey High Courts.

Coleman-Pecha is based in the Dubai office of Holman Fenwick Willan, an international law firm with headquarters in London, UK. Its core practice areas include shipping, aerospace, insurance, and construction. Coleman-Pecha spends time in Riyadh and other MENA jurisdictions.

Company Website: HFW | Home | Global industry specialists

Year Founded:  1883

Headquarters: London, UK.

Area of Focus: International arbitration with a focus on construction, infrastructure, and technology.

Member Quote: "I believe that litigation funding remains a developing industry, with significant scope to expand, and effect the provision of legal services on a much wider basis than it does today."

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An LFJ Conversation with Nick Wood

By John Freund |
Nick Wood has been involved in structuring and financing numerous litigation strategies over many years. After a long career in wealth management and many allied business ventures, he established Audley Capital in late 2022. Audley has grown rapidly to be a leading light in the litigation funding industry, bringing together investment capital, legal excellence and case origination. Legal Intelligence - formed by Audley Capital and AXai - empowers the legal industry to navigate the future with confidence. Nick believes that by harnessing the transformative power of AI and digital innovation, Legal Intelligence can equip legal firms and litigation funders with the tools and insights they need to make informed decisions, reduce risks, and offer unparalleled service and efficiency gains. LI’s goal is to create a world where legal practices can thrive on the certainty of their actions, driving positive outcomes for their clients. The utilisation of technology has always been a key ingredient in the Audley service proposition. As with many great opportunities, Audley and AXai came together by chance but swiftly worked out that collaboration was essential-maximising the impact of knowledge, connectivity and technology to create the art of the possible. Away from work, Nick’s interests include golf, rugby, cycling, food and wine. Below is our LFJ Conversation with Nick Wood. 1) There is a lot happening at the intersection of litigation funding and technology. Where do you currently see the most intriguing opportunities at the moment? The litigation funding industry has grown massively in recent years as demand has created intriguing investment opportunities for those seeking uncorrelated returns. However, it is fair to say that the legal profession has lagged behind other sectors in implementing technology and this has meant that accurate assimilation of risk/return ratios have been difficult for investors to ascertain. Indeed, in some cases money has been poorly allocated to firms that quite frankly do not have the required skill sets, and in others it has proved impossible to raise the required investment to take a case forwards. Neither of the above serves plaintiffs properly and they are the most important stakeholder in this. We see technology as an enabler. It helps great cases, great law firms and intelligent capital to stand out and be heard. It enables funders to risk assess potential cases quickly, accurately and effectively. It enable law firms to demonstrate historical performance, current case work and future opportunity. 2) You recently launched Legal Intelligence, an AI platform for the Legal Services industry.  What is the key differentiator here - why should legal professionals consider Legal Intelligence? Legal Intelligence Ltd (LI) is the coming together of like minded individuals. Audley brings a weight of experience in terms of litigation funding, law firm consulting and case development and management. AXai is an AI/technology powerhouse with long term experience of implementing technology to create bespoke solutions to complex problems. Together, LI is demonstrating the art of the possible. 3) Walk us through how a litigation funder might use your platform. From bookbuilding to client onboarding, how would Legal Intelligence provide efficiencies along the way? Wow, that could take a while! In brief, LI  has several ready made modules to enable claim verification, quantum calculation, case management, data trawling and risk analysis both at inception and at each milestone. For law firms, LI can provide onboarding tools, data scraping to maximise the value of each client, data trawling to reduce paralegal costs, client facing chatbots, case management tools and financial management assistance. Basically, LI makes investment capital more intelligent and it makes investable law firms stand out. We are also working on a number of bespoke projects with both funders and law firms. 4) What are the chief concerns prospective clients have about your platform - or about AI platforms in general? And how do you allay those concerns? It is really interesting to discuss technology generally, and AI in particular with prospective clients. Losing control is the probably the biggest fear, but those at the forefront of our industry realise that it has to be the way forward. Costs will always be under pressure, either through competition or regulation. Funders spend much of their time on cases that will not be funded and law firms spend massive resources on trying to access funding without success. LI seeks to short circuit much of this, making funding more swift, more accessible and more efficient. If we can work more effectively as a collective, access to justice will become quicker, cheaper and more successful, enabling those that need a voice to be heard. Enabling social justice is the beating heart of Audley, AXai and LI. 5) Where do you see the evolution of litigation funding and legal technology moving from here?  What advancements should we be keeping an eye on, and how do you see those impacting the sector?  There is massive interest from institutions, endowment funds and private capital in legal finance. Returns can be impressive and impactful. Many of those investing see that social responsibility and justice is served best by enabling those that need representation to be able to access it. We see the implementation of ‘intelligent’ technology as being vital to the further development of the litigation finance sector, ensuring that capital is invested wisely and effectively. Claim verification, case management, data trawling, client facing chatbots, settlement calculation, performance monitoring and active communication are becoming ever more embedded in litigation management. Legal Intelligence is, and will continue to be at the forefront of this transformational and exciting new world!
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£25M Settlement Agreement Reached in South Western Trains ‘Boundary Fares’ Claim

By John Freund |
As LFJ reported last year, several UK train operators have become the target of collective proceedings over claims that the rail companies failed to offer customers with lower-cost ‘boundary fares,’ and instead sold them more expensive tickets from central London. In a significant milestone, the claim brought against one of these operators appears to be approaching a conclusion, as the parties announced they have reached a settlement agreement. In a press release issued earlier this week, Stagecoach South Western Trains Limited (SSWT) and class representative Justin Guttman announced that they had reached a settlement agreement to end the claim brought against the train operating company. As part of the settlement agreement, the train operating company said that it would pay up to £25 million to eligible class members, describing it as “the largest settlement in the history of the collective proceedings regime in the UK”. The claim was brought against SSWT in 2019 over allegations that the train operator “had not made 'boundary fares' sufficiently available for Travelcard holders to purchase.” The claimants were represented by Charles Lyndon, whilst the proceedings were financed by Woodsford Group Limited. The announcement stated that the law firm and funder were “pleased to have been able to secure this outcome for class members without the necessity for the Parties to pursue the matter to trial.” The settlement agreement, which was published on the Boundary Fares claim website, states that the train companies deny “the existence of a dominant position and also any conduct which could amount to an alleged abuse of a dominant position” or that the class members “have suffered any loss or damages as a result of any of the conduct” that the proceedings alleged. However, it says that in order to end the legal proceedings “and avoid unnecessary legal and other costs”, all the parties have agreed to the terms of the settlement agreement. As emphasised in the settlement notice, “the Proposed Settlement relates to SSWT only and does not settle the claim against the other Defendant, First MTR South Western Trains Limited.” The first trial for the claim brought against the latter defendant is set to be heard on 17 June 2024. The settlement agreement will now be considered by the Competition Appeal Tribunal, with a hearing listed for 29 April 2024.

Unified Patents’ General Counsel Calls for Mandatory Disclosure of Litigation Funding

By John Freund |
It has been a long-held position of critics of the litigation finance industry that a lack of strict disclosure regulations represents a threat to national security. Unsurprisingly, the recent Bloomberg Law investigation into Russian oligarchs allegedly skirting sanctions through litigation funding has renewed these calls to actions. In an opinion piece for Bloomberg Law, Jonathan Stroud, general counsel at Unified Patents, argues that the latest revelations around foreign entities involvement in litigation funding demonstrates both the necessity and the urgency for new rules governing transparency and disclosure. In the article, he argues that the litigation finance industry “needs an overhaul to build in transparency”, suggesting that anything less than significant regulatory changes will allow “other countries to profit off the US judicial system and circumvent sanctions.” Whilst Stroud describes these changes as an ‘overhaul’, he suggests that it would be as simple as the judiciary introducing “a long-overdue tweak to existing Rules 7.1 and 26 of the Federal Rules of Civil Procedure.” He points out that the Judicial Conference is already aligned with this position, having been considering mandatory disclosure requirements as early as 2017. However, Stroud paints the judiciary as “characteristically slow to act”, and argues that it is time for either the judiciary or, if necessary, Congress to move forward with these changes. Looking at the attitude of funders faced with the potential of increased transparency, Stroud claims that “funders have opposed transparency by lobbying against it; writing letters, op-eds, and articles; and spending lavishly on events with sitting judges.” Instead of this position, he argues that both funders and investors should support self-disclosure, otherwise they may “get caught in a wave of over-enforcement down the road.”

NYC Bar Association Proposes Amendments to Rules Governing Fee Sharing

By John Freund |
Discussions around the regulation governing litigation funding are often focused on the decisions made at the legislative or executive levels of government. However, when it comes to assessing the rules for third-party funding within US states, it is clear that state bar associations play an equally important role in setting the playing field for litigation funders. An article in Bloomberg Law covers developments from the New York City Bar Association’s Professional Responsibility Committee, which has proposed changes to state rules governing the sharing of legal fees outside of lawyers and their firms. The two proposed amendments are for Rule 5.4(a), which would allow lawyers to share fees with litigation funders to secure third-party funding for their cases. Whilst these amendments would prove beneficial for litigation funders, the changes would ensure law firms still act independently of any funding arrangements and require lawyers to inform their clients over any relevant financing agreements. The Professional Responsibility Committee explained its proposed changes, stating that the existing rules assume “that one type of financing has the power to corrupt a lawyer’s professional ethics more than any other financial arrangement with a non-lawyer.” The Committee argued that this kind of presupposition “is an exercise in paternalism”, which it said it “cannot justify” after conducting its own research. For these proposed amendments to be adopted into New York’s regulations, they will be sent to the State Bar Association of New York for review and approval. If the association agrees with these changes, the amendments will go to the New York State Supreme Court’s appellate divisions for final approval.

QUINN EMANUEL AND LONGFORD CAPITAL TO OFFER LITIGATION FUNDING TO PRIVATE EQUITY CLIENTS

By John Freund |

In a groundbreaking agreement, Longford Capital Management, LP and Quinn Emanuel Urquhart & Sullivan, LLP announced a litigation financing offering for private equity (PE) firms and their portfolio companies. Under the terms of today’s deal, Longford has committed up to $40M in equity capital to Quinn Emanuel’s private equity clients involved in litigation, funding attorneys’ fees and litigation costs and monetizing the value of meritorious legal claims.

The agreement provides Quinn Emanuel’s PE clients and their portfolio companies with an alternative method of funding litigation and enables those clients to treat meritorious legal claims as corporate assets capable of being monetized. Longford provides funding for disputes in several areas of law applicable to PE clients, including antitrust, intellectual property, and a variety of contract, tort, and fraud claims.

“Quinn Emanuel likes to innovate, and we have already partnered successfully with Longford on several occasions to produce excellent results for clients,” said Jonathan Bunge, Co-Chair of Quinn Emanuel’s National Trial Practice and Managing Partner of the Chicago office. “This latest collaboration will serve the interests of our private equity clients seeking alternatives and options in pursuing meritorious litigation.”

“We have identified a particular ability to assist private equity managers and their portfolio companies involved in commercial disputes,” said William Farrell, Co-Founder and Managing Director of Longford. “We look forward to assisting Quinn Emanuel by providing its private equity clients with attractive financial options.”

With litigation funding, portfolio companies and their private equity sponsors can pursue valuable, meritorious claims and monetize the value of those claims without risk or delay, accelerating liquidity and fueling growth, Farrell noted.

About Longford Capital

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

About Quinn Emanuel

Quinn Emanuel Urquhart & Sullivan, LLP is a 1000+ lawyer business litigation firm—the largest in the world devoted solely to business litigation and arbitration with 34 global office locations. Surveys of major companies around the world have named it the “most feared” law firm in the world three times. Firm lawyers have tried over 2,500 cases, winning 86% of them. When representing defendants, Quinn Emanuel’s trial experience gets better settlements or defense verdicts. When representing plaintiffs, Quinn Emanuel lawyers have won nearly $80 billion in judgments and settlements. Quinn Emanuel has also obtained seven nine-figure jury verdicts, four 10-figure jury verdicts, 51 nine-figure settlements, and 20 10-figure settlements.

Quinn Emanuel has been named the No. 1 “most feared” law firm by The BTI Consulting Group three times in its annual “Most Feared Law Firms in Litigation” guide, in which in-house counsel named 46 firms they “want to steer clear of” when it comes to litigation. The American Lawyer named Quinn Emanuel the top IP litigation firm in the U.S. and the firm as one of the top six commercial litigation firms in the country. The UK legal periodical, The Lawyer named us “International Firm of the Year.” Law360 has most recently selected us as having Banking, Class Action, International Arbitration, and Trials “Practice Groups of the Year.” Managing IP twice recognized us as having the “Best ITC Litigation Practice” and honored us with the “Patent Contentious West” award. Legal Business has named us “US Law Firm of the Year” three times, and our German offices have twice been named both “IP Litigation Firm of the Year” and “Patent Litigation Firm of the Year” by JUVE, Germany’s most prestigious legal publication. Global Investigations Review, a leading legal periodical covering global white-collar investigations, named us the “Most Impressive Investigations Practice of the Year.” Global Arbitration Review named us the 3rd best arbitration practice in the world. Global Competition Review named our antitrust and competition practice among the “25 Global Elite,” and has included us in their list of the world’s top 10 competition litigation practices.

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Legal Finance SE Announces Acquisition by Nakiki SE

By John Freund |
Legal Finance SE, which has been aiming for an IPO for some time, has been acquired by the listed company Nakiki SE. The shares of Nakiki SE have been traded on the Frankfurt Stock Exchange since 9 April 2024 under ISIN DE000WNDL300 / WKN WNDL30. Nakiki SE will soon operate under the name Legal Finance Holding SE. In a strategic decision, Legal Finance SE, a pioneer in litigation Finance, announces its acquisition by the listed company Nakiki SE (ISIN DE000WNDL300, WKN WNDL30). This acquisition is not only a significant step for both companies, but also marks the indirect IPO of Legal Finance SE, which will take the company to new heights. Legal Finance SE, known for its innovative approach to litigation Finance, will significantly expand its reach and influence through this acquisition. The acquisition by Nakiki SE not only provides Legal Finance with access to the capital markets, but also opens up new avenues for innovation and growth in the ever-changing world of litigation Finance. This acquisition is in line with the company's vision to make legal protection more accessible and fairer and sends a strong signal for the future of the industry. For clients and partners of both companies, this development means increased support and expanded services aimed at facilitating access to quality legal services worldwide.
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Italian Supreme Court Provides Ruling on Registration Requirements for Litigation Funders

By John Freund |
In jurisdictions where litigation funding is still in its early stages, it is instructive when the courts are forced to deal with questions around the legality of third-party funding. A recent decision published by Italy’s highest court has offered some insight into the country’s legal system and its current attitude towards litigation funders. In a post from RP legalitax, Paolo Grandi examines a judgement handed down by the Italian Supreme Court last month, which found that litigation funding firms are not required to be registered under Article 106 of Legislative Decree No. 385/1993 (‘Testo Unico Bancario’ “TUB”).  The Supreme Court’s judgement related to a case from the Justice of Peace in Busto Arsizio, where a claimant seeking compensation from an airline had sold their claim to a funder. The Justice of the Peace ruled that the purchaser of the claim was not entitled to the compensation, as the agreement between it and the claimant was invalidated by the fact that they were not registered under the TUB regulations. The claimant appealed the decision to the Court of Appeal in Busto Arsizio which upheld the appeal in July 2021, only for the airline to then bring a challenge of the decision to the Supreme Court. The Supreme Court rejected the airline’s challenge and, in its decision published on March 19 2024, stated that the ““the Court of Appeal, in solving this case, was compliant with what this Court has already affirmed in the different hypothesis of the assignment of the credit for compensation for road accident damages, namely that it is possible to assign such credit pursuant to Articles 1260 et seq. of the Italian Civil Code.” The Supreme Court went on to clarify that this kind of transaction “does not even imply any financial activity subject to authorization pursuant to Article 106 TUB.”