John Freund's Posts

2856 Articles

ALFA Welcomes Litica as Newest Associate Member

By John Freund |
In a post on LinkedIn, The Association of Litigation Funders of Australia (ALFA) announced that it is welcoming Litica as its newest Associate Member. Litica becomes the 11th Associate Member of ALFA, joining the likes of FTI Consulting, Piper Alderman, and William Roberts Lawyers. Since its launch in 2019, Litica has grown to become a leading provider of commercial ATE insurance in the UK and has since built a global footprint by expanding its operations to Australia in 2022. As part of this expansion, Litica appointed Philip Lomax to the position of Managing Director for Asia Pacific, with Lomax leading Litica’s Australian offering from Sydney. As LFJ reported in November 2023, Litica followed its expansion to Australia by establishing a European presence through a new office in Cologne (Köln) Germany, with Ed Yell appointed as Managing Director of Litica Europe GmbH.

Key Takeaways from LFJ’s Special Digital Event “Litigation Finance: Investor Perspectives”

By John Freund |
On Thursday April 4th, 2024, Litigation Finance Journal hosted a special digital event titled "Litigation Finance: Investor Perspectives." The panel discussion featured Bobby Curtis (BC), Principal at Cloverlay, Cesar Bello (CB), Partner at Corbin Capital, and Zachary Krug (ZK), Managing Director at NorthWall Capital. The event was moderated by Ed Truant, Founder of Slingshot Capital. Below are some key takeaways from the event: If you were to pinpoint some factors that you pay particular attention to when analyzing managers & their track records, what would those be? BC: It's a similar setup to any strategy that you're looking at--you want to slice and dice a track record as much as possible, to try to get to the answer of what's driving returns. Within litigation finance, that could be what sub-sectors are they focused on, is it intellectual property? Is it ex-US deals? What's the sourcing been? How has deployment been historically relative to the capital they're looking to raise now? It's an industry that is starting to become data rich. You have publicly-listed companies that have some pretty interesting track record that's available. I'm constantly consuming track record data and we're building our internal database to be able to comp against. Within PE broadly, a lot of people are talking about DPI is the new IRR, and I think that's particularly true in litigation finance. If I'm opening a new investment with a fund I've never partnered with before, my eyes are going to 'how long have they been at it, and what's the realization activity?' There is also a qualitative aspect to this--has the team been together for a while, do they have a nice mix of legal acumen, investment and structuring acumen, what's the overall firm look like? It's a little bit art and science, but not too dissimilar from any track record analysis with alternative investment opportunities. Zach, you've got a bit more of a credit-focus. What are you looking for in your opportunities?  ZK: We want to understand where the realizations are coming from. So if I'm looking at a track record, I want to understand if these realizations are coming through settlements or late-stage trial events. From my perspective as an investor, I'd be more attracted to those late-stage settlements, even if the returns were a little bit lower than a track record that had several large trial wins. And I say that because when you're looking at the types of cases that you'll be investing in, you want to invest in cases that will resolve before trial and get away from that binary risk. You want cases that have good merit, make economic sense, and have alignment between claimant and law firm, and ultimately are settleable by defendants. That type of track record is much more replicable than if you have a few outsized trial wins. What are things that managers generally do particularly well in this asset class, and particularly poorly?  CB: I don't want to paint with a broad brush here. With managers it can be idiosyncratic, but there can be structuring mistakes - not getting paid for extension risks, not putting in IRR provisions. Portfolio construction mistakes like not deploying enough and being undercommitted, which is a killer. Conversely, on the good side, we've seen a ton of activity around insurance, which seems to be a bigger part of the landscape. We also welcome risk management optionality with secondaries. Some folks are clearly skating to where the puck is going and doing more innovative things, so it really depends who you're dealing with. But on the fundamental underwriting, you rarely see a consistent train wreck - it's more on the other stuff where people get tripped up. How do you approach valuation of litigation finance portfolios? What I’m more specifically interested in is (i) do you rely on manager portfolio valuations, (ii) do you apply rules of thumb to determine valuations, (iii) do you focus your diligence efforts on a few meaningful cases or review & value the entire portfolio, and (iv) do you use third parties to assist in valuations?  CB: If you're in a fund, you're relying on the manager's marks. What we do is not that - we own the assets directly or make co-investments. We see a lot of people approach this differently. Sometimes we have the same underlying exposure as partners and they're marking it differently. Not to say that one party is rational and the other is not, it's just hard to do. So this is one we struggle with. I don't love mark-to-motion. I know there's a tug toward trying to fair value things more, but as we've experienced in the venture space, you can put a lot of valuations in DPI, but I like to keep it at cost unless there is a material event. Check out the full 1-hour discussion here.
Read More

Claimbnb Opens Madrid Office Amid 3rd Fundraising Round

By John Freund |
Whilst the American, British and Australian litigation finance markets are largely dominated by long-established funders, individual jurisdictions within Europe offer opportunities for domestic funders to gain a foothold in these nascent markets. This is being demonstrated once again, as a new funder in Spain has opened an office and raised additional capital. An article in Iberian Lawyer covers the latest move from Spanish litigation funder, Claimbnb, which has opened an office in Madrid to support its expansion in the country’s growing litigation finance market. Claimbnb currently operates three investment vehicles and is in the middle of its third fundraising round, aiming to attract another €50 million in capital for new case investments. The funder stated that it had already achieved many successes for its clients and its investors, “having invested, to date, in more than 30 cases or situations, most of them in Spain for a nominal value of more than €150 million.” Fernando de Castro de Miguel, a member of Claimbnb’s investment committee, stated: “In an uncertain economic environment, Claimbnb offers the possibility of monetizing litigation or legal assets, providing extraordinary income, immediate liquidity and the ability to reinvest in the firm’s core business. We differentiate ourselves by investing in unique litigation that requires ad-hoc risk analysis, but we do not forgo other more scalable themes such as antitrust damages.”

Does Consumer Legal Funding Put Consumers in Debt?

By John Freund |
The following article was contributed by Eric Schuller, President of the Alliance for Responsible Consumer Legal Funding (ARC). There has been a lot of discussion if Consumer legal funding is a loan and thereby creates debt for a consumer Consumer legal funding, sometimes called litigation funding or lawsuit funding, provides cash upfront to plaintiffs, to be used for household needs, which are involved in legal proceedings in exchange for a portion of the eventual settlement or judgment. It doesn't create debt like a loan from a bank or credit card, these distinctions contribute to its classification as a unique financial product rather than a loan or debt.
  • Non-recourse nature: Unlike loans, where the consumer is personally liable for repayment regardless of the outcome, consumer legal funding is non-recourse. This means that if the plaintiff loses their case, they are not obligated to repay the funding. The repayment is contingent upon the success of the lawsuit.
  • No monthly payments: In a loan, borrowers usually make monthly payments to repay the principal amount plus interest. With consumer legal funding, there are usually no monthly payments required. Instead, repayment only occurs if and when the case is settled or won, and the repayment is often structured as a lump sum.
  • Risk sharing: Consumer legal funding providers assume a significant amount of risk by providing funds to plaintiffs who may not ultimately win their case. Unlike lenders who typically assess creditworthiness and require collateral, consumer legal funding companies evaluate the strength of the case and base their decision on the likelihood of success and not the creditworthiness of the consumer.
  • Not regulated as loans: Consumer legal funding is often subject to different regulations than loans. While loans are typically governed by banking and lending laws, consumer legal funding has its own set of regulations that ensures consumers are protected and the product is offered in a responsible manner.
Some of the other key differences between consumer legal funding and debt from a loan is in how repayment works. With a loan, the consumer borrows money and agrees to repay it with interest, regardless of the outcome of the situation, creating debt. However, with consumer legal funding, repayment is contingent upon the success of the case. If the consumer loses their case, they will not have to repay the funding. But if they win, they will have to pay back the amount funded, with fees that are known upfront. So, therefore consumer legal funding doesn't create debt. Unlike Consumer legal funding, some loans can put consumers in a cycle of debt. The term cycle of debt refers to a pattern where individuals or households become trapped in a recurring pattern of borrowing money to meet financial obligations, only to find themselves in even greater debt over time. This cycle often involves:
  • Initial Borrowing: The cycle typically begins with an initial borrowing of money, such as taking out a loan, using a credit card, or obtaining other forms of credit to cover expenses or emergencies.
  • Accumulation of Interest and Fees: As time passes, the borrower may struggle to make timely payments on their debts, leading to the accumulation of interest charges, late fees, and other penalties.
  • Financial Strain: The increasing debt burden can put a strain on the borrower's finances, making it difficult to cover basic living expenses and other financial obligations.
  • Additional Borrowing: To address their financial difficulties, borrowers may resort to additional borrowing or using high-cost forms of credit, such as payday loans or cash advances, to make ends meet.
  • Repayment Challenges: The cycle continues as the borrower struggles to keep up with mounting debt payments, leading to further financial stress and the need for more borrowing.
  • Escalating Debt: Without significant changes in financial habits or circumstances, the debt continues to escalate, with the borrower owing more money than they can realistically repay.
Breaking the cycle of debt often requires proactive steps such as budgeting, reducing expenses, increasing income, seeking financial counseling, and finding ways to pay down debt strategically. It may also involve negotiating with creditors, consolidating debts, or exploring debt relief options such as debt settlement or bankruptcy. Consumers who use Consumer legal funding are never placed in a cycle of debt. Consumer legal funding has many other positives to a consumer besides not placing them in debt.
  • Immediate Financial Assistance: Consumer legal funding provides plaintiffs with immediate cash to cover living expenses, medical bills, legal fees, and other costs associated with their lawsuit. This can be particularly helpful for individuals facing financial hardship due to their inability to work or other circumstances related to their legal case.
  • Non-Recourse: Consumer legal funding is non-recourse, meaning that if the plaintiff loses their case, they are not obligated to repay the funding. This reduces the financial risk for the plaintiff, as they only repay the funding if they win their case.
  • Leveling the Playing Field: Consumer legal funding can help level the playing field in legal disputes by providing plaintiffs with the financial resources to pursue their case effectively. This is particularly beneficial for individuals who are up against well-funded defendants or corporations.
  • No Upfront Costs: Unlike loans, consumer legal funding does not require upfront payments or monthly repayments. Instead, repayment is structured with a known outcome and amount.
Overall, consumer legal funding can be a valuable resource for plaintiffs in need of financial assistance during legal proceedings without putting them in debt. Eric Schuller President Alliance for Responsible Consumer Legal Funding (ARC)
Read More

LITFINCON Expands to Los Angeles in September 2024 and Announces Distinguished Judicial Panel

By John Freund |
As the premier litigation finance conference renowned for its thought leadership and networking opportunities, LITFINCON is proud to announce its expansion to Los Angeles in September 2024. LITFINCON Los Angeles promises to uphold its tradition of excellence, offering attendees exclusive networking events, informative and engaging panel discussions, and unique insights into the evolving landscape of litigation finance through both a legal and financial lens. Attendees include a diverse array of professionals, including litigators, general counsel, law firm partners, funders, investors, insurance professionals, and esteemed members of the judiciary. Among the hallmarks of LITFINCON is the Judicial Panel, featuring distinguished jurists who will offer invaluable perspectives on the intersection of law and finance. LITFINCON Los Angeles is honored to announce these participating jurists with additional jurists to be announced:
  • The Honorable Patrick Bumatay of the United States Court of Appeals for the Ninth Circuit
  • The Honorable Charles Eskridge of the United States District Court for the Southern District of Texas
  • The Honorable Taylor McNeel of the United States District Court for the Southern District of Mississippi
The Judicial Panel will be moderated by Lauren J. Harrison, Vice President & Investment Counselor of Law Finance Group. "We want to thank our distinguished panel of jurists for taking time from their busy day jobs to share their views about our industry's work. I was privileged to begin my legal career by clerking for two federal judges, so our firm's respect for the public service and dedication of members of the judiciary is deep and sincere," says Mani Walia, Managing Partner at Siltstone Capital. LITFINCON Los Angeles's venue is The Maybourne Beverly Hills, a symbol of West Coast elegance, perfectly located adjacent to Rodeo Drive. Guests can indulge in top-tier dining and services, staying at Tatler's 2023 selection for "Best City Hotel." Registration for LITFINCON Los Angeles 2024 is now open, with early bird discounts available for a limited time. Don't miss this opportunity to be part of the premier event shaping the future of litigation finance. If you are interested in sponsorship opportunities, please reach out to Ally Herebic at allyson.herebic@siltstone.com. Siltstone Capital, the organizer of LITFINCON, is a top-tier niche alternative capital provider that provides funding solutions for litigants, law firms, and legal teams, aiming to support plaintiffs with the financial resources to assert and protect their rights. Learn more about Siltstone Capital at www.siltstone capital.com. For further details about LITFINCON Los Angeles, please visit our website at www.litfincon.com.
Read More

Legal and Ethical Considerations When Navigating Litigation Finance

By John Freund |
The following post was contributed by Jeff Manley, Chief Operating Officer of Armadillo Litigation Funding In litigation finance, especially in mass torts and class actions, trust and success hinge on unwavering ethical practice and legal compliance. For attorneys and financial professionals navigating this complex field, a steadfast commitment to upholding ethical standards is not just ideal—it's imperative. This article delves into the crucial considerations that must guide the intricate relationship between legal funding and professional integrity. The Importance of Law Firm Independence Law firm independence is paramount when it comes to funding arrangements, particularly within the complex sectors of mass torts and class actions. The imperative to maintain this independence while engaging with external funding sources necessitates a sophisticated approach to partnership. Firms must ally with financiers who not only understand the legal and ethical implications inherent to such cases but who also value the firm's autonomy in decision-making processes. A skilled financier can guide firms through the nuances of these arrangements, ensuring that the terms of any financial agreement bolster the firm’s ability to act in its clients' best interests without external influence. Drafting agreements with a clear delineation of roles and expectations, without compromising the firm’s command over legal strategy, is not solely a matter of due diligence—it's a strategic endeavor to uphold the integrity and efficacy of the legal services provided. Managing Conflicts of Interest Managing conflicts of interest requires a collaborative effort between law firms and their funding partners. Identifying and mitigating potential conflicts at the intersection of funders, firms, and clients necessitates a united approach. Together, firms and funders should conduct thorough reviews of funding arrangements to spotlight areas where interests might diverge, ensuring that neither the firm's allegiance to its client nor the client's best interests are compromised. Adopting a joint strategy that aligns with ABA Model Rule 1.7 on conflicts of interest can fortify this alliance. This partnership approach to conflict management might include establishing shared guidelines for conflict checks, mutual disclosures to involved parties, and embedding protective measures in funding agreements that prioritize client outcomes. A cooperative oversight mechanism, possibly in the form of a committee comprising representatives from both the firm and the funder, can serve as a vigilant guardian of ethical integrity and client dedication, fostering a proactive culture of transparency and ethical vigilance. Crafting of Finance Agreements Moving into the structuring of financing agreements, it's vital that financiers and law firms unite to craft solutions (and operating agreements) that are ethically grounded and legally sound, starting with shared due diligence. Both parties engage in a transparent exchange to ensure all legal and ethical considerations are meticulously evaluated, laying a groundwork that prioritizes the client’s best interests and compliance with regulations. The agreement's structuring phase is an exercise in precision, balancing financial objectives with stringent ethical standards. Following the execution of the agreement, a concerted monitoring effort is essential to ensure ongoing compliance and address any ethical issues proactively. This cooperative stance not only fosters trust and transparency between the financier and the firm but also upholds the dignity of the legal profession and the rights of the clients they serve. This endeavor necessitates guidance from a trusted and sophisticated financier, ensuring that the partnership is built on a foundation of expertise and integrity. Regulatory Compliance Navigating this domain requires acute awareness of both state and federal regulations. This environment demands that law firms and financiers possess a deep understanding of the legal intricacies that define their operational landscape. The diversity of regulations across jurisdictions necessitates a partnership with well-respected funders, who bring sophisticated guidance to the table. Their expertise is invaluable in steering through the complexities of compliance, ensuring that practices are not only current but also anticipatory of the legal field's dynamic evolution. The future of litigation finance hinges on adaptability to regulatory changes, which are increasingly influenced by the sector's growing recognition and its impact on access to justice. The call for enhanced clarity in regulations and the push for stringent disclosure practices indicate a trend towards standardization across the board. Law firms, guided by seasoned financiers, must remain vigilant and adaptable, ready to adjust their strategies to maintain compliance and ethical integrity. This proactive stance is crucial not just for navigating today's regulatory challenges but also for shaping the future of ethical litigation finance. Conclusion In the rapidly shifting landscape of litigation finance, the value of a partnership with a well-respected financier cannot be overstated. Such collaborations are critical not only for steering through the regulatory complexities but also for shielding a firm against potential legal liabilities, including malpractice claims. As the industry continues to evolve, the guidance of experienced financiers becomes an indispensable asset, enabling law firms to anticipate changes, adapt strategies, and maintain compliance. This partnership does more than protect; it empowers firms to thrive amidst challenges, ensuring that their commitment to justice and client service is upheld. In the end, the journey through the ethical and regulatory intricacies of litigation finance is one best undertaken with a trusted financier by your side, crafting a future where the legal profession and its principles stand resilient.
Read More

ALFA Welcomes Aequitas Litigation Funding as Newest Member

By John Freund |
In an announcement posted on LinkedIn, The Association of Litigation Funders of Australia (ALFA) welcomed Aequitas Litigation Funding as its newest member.  The Sydney-based litigation funder is backed by Axiis Capital Pty Ltd, with the company being ‘founded on the principle of fairness to all in our legal system and is dedicated to providing access to justice.’ According to Aequitas’ website, the funder is open to providing ‘financing for legal costs, solicitor’s fees, and working capital’, with a focus on class actions.

Italian Funder LexCapital Looks to Engage with Swiss Legal Market

By John Freund |
For those funders who are newer entrants to the litigation finance market, their focus may initially be limited to domestic proceedings within their native jurisdiction. However, as these funders look to grow, it is often a natural next step to look outside their own borders, and engage with cases in other jurisdictions that have a connection to their home country. An article in Corriere Del Ticino highlights the activities of Italian litigation funder LexCapital, speaking with the company’s COO, Giuseppe Farchione, about the funder’s work in Italy and its recent expansion to engage with legal matters taking place in Switzerland.  Farchione discussed the company’s proprietary algorithm, ‘LexCapital Litigation Assessment’, which allows the funder to analyse the potential outcome and proceeds from a case, utilising a database which includes over 1.2 million civil matters in the Italian courts. The database contains a variety of statistical information that the algorithm can draw upon, including the duration of these cases, the subject and forum of the proceedings, and the division of these cases based on whether they were accepted or rejected. Farchione explained that the company hopes to begin incorporating data from international arbitration proceedings and cases in other jurisdictions. Farchione went on to discuss LexCapital’s nascent activities in the Swiss legal market, having engaged in its first case in Ticino, an Italian-speaking region of southern Switzerland, working with local lawyer Marco Compagnino. Farchione said that LexCapital would be open to working with other law firms in Switzerland, noting that the costs involved in Swiss cases are high but can lead to substantial returns for those proceedings that reach successful conclusions. He went on to say that LexCapital’s primary interest in Swiss litigation funding is in those cases which have a connection to Italy, such as those matters that involve an Italian company operating in Switzerland or a Swiss company that is involved in a dispute with an Italian counterpart.

LitFin Funded Case to Recover Khatib Family’s Stolen Art Leads to Raids in Paris and Frankfurt

By John Freund |
Many examples of funded litigation involve high profile companies or sovereign states, with alleged scandals and injustices that can quickly dominate headlines. However, an ongoing European legal action may stand out above the rest, with a story so eventful that it sounds as if it could have been lifted from a Hollywood script, as a litigation funder is supporting a family’s efforts to recover stolen paintings worth hundreds of millions of euros. A press release from the Khatib family provided an update on its legal battle to recover valuable paintings that were stolen from their collection, as French bailiffs and police conducted a raid on a storage facility in Paris. The raid was authorised by court orders issued in Paris, which follows the same pattern as raids conducted by German authorities following court orders issued in Frankfurt. The Paris raid reportedly recovered a ‘large number of paintings belonging to a collection of works of Russian Avantgarde stolen from the Khatib family.’ These raids are the result of a legal case that began following the December 2019 theft of around 1,800 paintings, valued in the hundreds of millions of euros, from Wiesbaden in Germany. Since the theft, the Khatib family have been pursuing legal action to recover the stolen artwork, with the litigation funded by Prague-based funder, LitFin, and led by Dentons’ offices in Frankfurt and Paris. The press release included a statement from the spokesperson for the Khatib family, who said: "With the help of Dentons and LitFin, we will follow the perpetrators around the world. We will continue to recover our property and encourage anyone who considers buying works from the Russian Avantgarde to diligently check its provenance and make sure it is not a stolen piece belonging to our family".
Read More

High Court Denies ‘Dieselgate’ Defendants’ Request to Order Disclosure of Claimants’ Funding Agreement

By John Freund |
As the UK litigation finance industry continues to stay in the public spotlight, discussions continue around what any future regulation might entail and whether it would increase requirements around the transparency or disclosure of funding agreements. For now, a recent judgement from the High Court has ruled in favour of the claimants in a high-profile group claim, by denying a request for the disclosure of any funding agreements. An article in The Law Society Gazette highlights a ruling in the High Court of Justice of England and Wales, Kings Bench Division, that dealt with a request for the disclosure of any funding agreements in the ‘Dieselgate’ group claim. The judgement dealt with two sets of applications, with the second being a funding disclosure application from the defendants that sought to compel the claimants and their lawyers, Pogust Goodhead, to provide ‘information as to their funding position’.  The request was sought by the defendants as they stated that they ‘are considering making an application under CPR 25.14(2)(b) for security for costs against the Funders.’ In their judgement, Mrs Justice Cockerill and Mr Justice Constable, declined ‘to order disclosure of Pogust Goodhead’s funding agreement, but instead consider that it will be appropriate to revisit the issue relatively shortly, to the extent it is pursued.’ They wrote that this could be done after legal budgets were fixed and once the claimants have had the opportunity to secure ATE insurance, meaning that ‘the question of security against Gramercy would be rendered redundant.’ The full judgement can be read here.

Lawdragon Publishes 100 Global Leaders in Litigation Finance for 2024

By John Freund |
Lawdragon has released its 100 Global Leaders in Litigation Finance list for 2024, with the fifth edition of its annual guide ‘dedicated to the leaders of this fascinating – and necessary – avenue of the legal profession.’ The list includes 164 senior executives from all over the glove, representing the entire spectrum of those companies involved in litigation finance, including funders, law firms, insurers, investors, and advisors. Of those companies with leaders included on the list, Burford Capital saw the highest number of executives recognised with 17, with Omni Bridgeway close behind at 12 individuals, and Harbour which had eight of its team listed.  Looking at the breakdown by jurisdiction across the 165 litigation finance leaders recognised, the US was the most represented country with 73 individuals listed. The UK came in a close second with 55 leaders recognised, and Australia came behind it with 17 executives profiled. As part of it’s 2024 litigation finance leaders list, Lawdragon has also identified those individuals who are listed in its Hall of Fame, which recognises ‘members and other outstanding lawyers who have made a remarkable contribution to the profession.’ Within litigation finance, three individuals are included in the Hall of Fame:
  • Louis Young, co-founder & CEO, Augusta Ventures
  • Stuart Grant, co-founder & managing director, Bench Walk Advisors
  • Andy Lundberg, managing director, Burford Capital
The full list of individuals recognised in 100 Global Leaders in Litigation Finance list can be found here.

Russian Billionaires Evading Sanctions by Funding Cases in UK & US

By John Freund |
One of the latest critiques of the litigation finance industry is that it represents a potential threat to US national security, due to the possibility of foreign governments and entities by funding lawsuits that target American companies and strategic national interests. Whilst there has been scant evidence of this being a tangible issue, a new investigation has revealed that Russian billionaires have been avoiding international sanctions by financing lawsuits in the West. The detailed investigation by Bloomberg Law focuses on the activities of the investment company A1, its parent corporation Alfa Group, and A1’s directors. Following Russia’s invasion of Ukraine in February 2022, Alfa Group has been sanctioned by both the United States and United Kingdom, as were A1’s billionaire directors Petr Aven, Mikhail Fridman, German Khan, and Alexey Kuzmichev. The US also individually sanctioned A1 in September 2023. Bloomberg’s investigation reveals that A1 has financed and been directly involved in the proceedings of bankruptcy lawsuits in both New York and London, having spent approximately $20 million across these cases. The investigation highlights that A1’s sanctioned directors attempted to avoid the reach of their individual sanctions by selling the company to another of its directors, Alexander Fain, for the miniscule sum of $900. In a witness statement for one of the bankruptcy cases, Fain explained that his directors had sold the company because “it became obvious that A1 LLC would no longer be able to operate normally and that there was a risk of default on its obligations to fund the litigation.” Commenting on the investigation, J. Scott Maberry, partner at Sheppard Mullin, described A1’s funding activities as “a big development in that sense because it kind of puts the US judicial system on par with the New York Stock Exchange and the US dollar as things that we need to start thinking carefully about how to deny access to.” Matt Webb, senior vice president at the Chamber of Commerce’s Institute for Legal Reform, argued that “A1’s actions are an example of the problems that arise when foreign entities can finance litigation.” The full details of A1’s involvement in these cases, as well as the roles played by sanctioned individuals can be read in Bloomberg Law’s article.

Westfleet Publishes 2023 Litigation Finance Market Report

By John Freund |
Westfleet Advisors has published its fifth annual Litigation Finance Market Report, providing a data-driven overview of the commercial funding industry in the United States from 1 July 2022 to 30 June 2023.  Westfleet summarises its findings as ‘indicative of an industry in a state of flux, with some notable players exiting the industry, numerous professionals making lateral moves, and capital commitments to new deals contracting by nearly 14%.’ With regard to the decreasing volume of new capital commitments, Westfleet attributes this trend to the difficult global economic conditions that are affecting all industries, rather than a decline in demand for litigation funding. Despite this contraction on new capital, Westfleet still found that ‘many funders thrived both in terms of new capital raised, capital committed to new deals, growth in their headcount, and profitability.’ Westfleet’s report suggests that the data from 2023 indicates that the market is still favourable for those established funders ‘with strong track records and a proven ability to consistently attract new capital.’ Key highlights from the 2023 report include:
  • $15.2B in assets under management for 2023, representing a small increase from $15.1B in 2022
  • $2.7B in new commitments to deals in 2023, down from £3.2B in 2022
  • The average deal size declined from $8.6M in 2022 to $7.8M in 2023
  • This was driven by a reduction in the average size of portfolio deals from $10.5M in 2022 to $9.9M in 2023
  • In contrast the average size of single-matter transactions increased from $4.3M in 2022 to $4.8M in 2023
  • The share of new capital dedicated to claim monetization reached 21% in 2023, continuing the upward trend from 14% in 2022 and 8% in 2021
To read the full report from Westfleet Advisors, click here.

Nick Rowles-Davies Shares Thoughts on a Post-PACCAR World

By John Freund |
A new piece of analysis by Nick Rowles-Davies, founder and CEO of Lexolent, sheds light on the current state of the litigation funding market post-PACCAR.
As is customary of Rowles-Davies, his analysis pulls no punches. Writing on LinkedIn, he opines that industry stakeholders have varying perspectives on the Litigation Funding Agreements Bill.  Despite the Supreme Court's judgement and the industry's claims of adaptability and compliance, not all funders operate transparently, according to Rowles-Davies. The speed of the proposed new legislation and the lobbying efforts to expedite its implementation have also raised concerns.
The litigation funding industry is diverse, with different funders operating in different ways. There is a growing call for regulation, particularly as 90% of the London Solicitors Litigation Association believe it's time for the industry to be regulated. The PACCAR decision has created uncertainty and led to attempts to reopen concluded deals. As a result, a thorough review by the Civil Justice Council is needed.
The proposed 'Litigation Funding Agreements (Enforceability) Bill' aims to restore the pre-PACCAR regime, allowing individuals and small businesses to fund large claims against corporations. While many eyebrows have certainly been raised, the litigation funding industry isn't going anywhere any time soon, even if future regulation is on the horizon.

Member Spotlight: Michael Perich

By John Freund |

Michael Perich is a Senior Vice President and Head of Litigation Insurance in the Transaction Liability Practice at Lockton.  Prior to joining Lockton, Michael spent much of his career working at the world’s largest litigation finance company, Burford Capital, as well as a Chambers-ranked litigation finance broker, Westfleet Advisors. In these roles, he helped a wide range of clients—including multinational corporations and AmLaw100 firms—use innovative litigation finance structure to achieve their financial objectives.

Michael is also a former litigator, having represented clients on contingency fee, alternative fee, and hourly fee arrangements.  He now uses those skillsets to help his clients structure bespoke insurance policies designed to help his clients achieve their financial objectives.

Michael has been recognized by LawDragon as one of the top 100 Global Leaders in litigation finance and is listed in the IAM Strategy 300, a guide listing individuals who innovatively create and action strategies which realize and amplify the worth of IP portfolios.

Company Name and Description:   Lockton is the largest privately held global insurance brokerage that provides outstanding risk mitigation and claims management through the application of modern insurance strategies. With expertise in risk management, property and casualty, employee benefits/people solutions, professional and private risk, we help our clients protect what matters to them most: people, property, and their bottom line.

Company Website: https://global.lockton.com/us/en

Headquarters:  Kansas City

Area of Focus:  Litigation Funding and Contingent Liability Insurance products

Member Quote: Having ventured into the field of litigation finance almost ten years ago, I remain repeatedly astounded and impressed by the growth and increased sophistication the market has exhibited in recent years. The progress has been truly remarkable, and I feel grateful to be involved in this dynamic industry.

Read More

Subpostmaster’s Lawyer Calls on SRA to Examine Legal Costs in Post Office Litigation

By John Freund |
The Post Office scandal, and its rise to the forefront of public attention in the UK, has been repeatedly cited as a prime example of the crucial role that litigation finance plays in securing access to justice for victims. However, arguments over the legal costs and funder’s returns in this case continue to be aired, as a lawyer for one of the subpostmasters is calling on regulators to get involved. Reporting by The Telegraph, and shared by Yahoo Finance, reveals that one of the subpostmasters in the Post Office Horizon litigation is calling for the Solicitors Regulation Authority (SRA) to investigate the legal fees paid out from the £58 million settlement fund. The subpostmaster’s lawyer, Jim Diamond, has written to the SRA after he has repeatedly asked for additional information from Freeths, the firm which represented the victims in the case, about how the settlement was divided between the law firm, litigation funder and the claimants. Mr Diamond explained in his letter that he has twice asked Freeths to provide the information along with supporting documents, but the law firm has rebuffed his outreach and said that as the litigation is now closed, they are not open to engaging on the subject. Diamond is asking the SRA to clarify whether the law firm is obligated to comply with his request and provide the documents to their former client, the postmaster. Mr Diamond also used the letter to criticise the recent article written by Neil Purslow, founder and chief investment officer of Therium Capital Management. In the guest article published in The Times, Purslow had refuted suggestions that Therium’s remuneration accounted for 80% of the settlement fund. In his letter to the SRA, Diamond argued that Therium’s founder should not have discussed the breakdown of costs in public, as these details are ‘private and confidential.’ At the recent Brown Rudnick European Litigation Funding Conference, Mr Purslow once again denied the claims about an ‘80% payout’ to Therium and offered a detailed explanation of the funder’s involvement in the case.

Illinois Court Grants Burford and Sysco’s Request to Substitute Plaintiff in Poultry Antitrust Litigation

By John Freund |
As LFJ reported last month, the ongoing saga of Burford Capital and Sysco’s antitrust lawsuits continued, as both parties appealed a Minnesota judge’s denial of a joint request for the substitution of plaintiff in the antitrust case. As we wait to see the outcome of that appeal, Burford and its subsidiary, Carina Ventures, have secured a favourable ruling in another antitrust case in the United States District Court for The Northern District of Illinois. Reporting by Reuters provides the latest update on the Sysco antitrust cases funded by Burford Capital, as U.S. District Judge Thomas M. Durkin granted Sysco’s request to assign the ‘Broiler Chicken Antitrust Litigation’ to Burford’s affiliate company, Carina Ventures. The Illinois judge rejected each of the arguments brought by the defendants who objected to the substitution, stating: ‘An invalid assignment might have been a reason to deny the motion. But the Court has rejected those arguments.’ Explaining his decision to grant the substitution of plaintiff in the case, Judge Durkin said that “despite defendants protestations to the contrary, the assignment does not appear to be a very unusual circumstance either.” He further reasoned that “such assignments are a fact of modern litigation”, and therefore he had no reason to “interfere with sophisticated parties’ business decisions." The favourable ruling in this poultry case in Illinois will be welcomed by Burford Capital and Sysco, as their efforts to similarly reassign the pork antitrust claim in Minnesota were denied last month. Whilst the initial denial of their request for substitution of plaintiff in that case was disappointing, Burford will no doubt see Judge Durkin’s ruling as a positive factor in their appeal of the Minnesota court order.

An LFJ Conversation with Louisa Klouda, CEO at Fenchurch Legal

By John Freund |
As the litigation funding industry continues to evolve, Louisa Klouda, CEO of Fenchurch Legal shares insights into the sector and Fenchurch Legal’s approach and practices. Below is our LFJ Conversation with Louisa Klouda:

What drew you to the world of litigation funding?

My entry into the world of litigation funding wasn't a direct one, but rather a spark of curiosity during my previous role in corporate finance and the asset-backed lending world. I came across the concept of litigation funding and found myself instantly drawn to its unique characteristics. I discovered a market dominated by large funders focusing on large cases like class actions. However, I noticed a significant gap: a lack of support for smaller claims, particularly in areas like housing disrepair and the challenges the law firms faced in accessing funding for these meritorious claims. Recognizing the gap in the small-claims market, I saw an opportunity to create Fenchurch Legal in 2020. The aim of the business was twofold: to facilitate access to justice for smaller claims and to provide an avenue for investors looking for alternative investment opportunities.

Can you provide an overview of small ticket litigation funding and its significance in the UK legal landscape?

Small ticket litigation funding plays a vital role in the UK legal landscape, offering an alternative approach to financing legal claims. In essence, it involves providing funding to law firms for smaller value cases across various areas like personal injury, housing disrepair, and financial mis-selling, unlike large-ticket funding which targets high-stakes class actions. Small-ticket funders like Fenchurch Legal focus on quantity, funding a high volume of smaller cases. These case types have clear legal precedent, and are protocol-based and process-driven consumer claims, with high success potential. This subset of litigation funding addresses a gap in the legal financing ecosystem created by rising legal costs and resource-intensive cases. Small ticket litigation funding ensures that even modest claims, like housing disrepair receive the backing necessary to navigate the legal process, ultimately facilitating access to justice and contributing to a more balanced and inclusive legal landscape.

How does this subset of litigation funding attract investors?

The appeal of small-ticket litigation funding to investors is multifaceted, driven by three key factors -  flexible entry points, portfolio diversification, and unique security features. Firstly, it provides investors with lower entry points compared to larger funders. This is particularly attractive to those moving away from traditional markets and seeking a more balanced investment approach with steady returns. The accessibility of smaller minimum investment amounts aligns with the preferences of investors aiming for a diversified and resilient portfolio. Small-ticket funders focus on quantity, funding a high volume of smaller cases. This diversification approach effectively spreads the risk across various law firms, multiple cases and case types, reducing the reliance on the success of a single case. Investors are drawn to the stability and risk mitigation inherent in this investment strategy. Moreover, investors like the insurance-backed nature of this investment. All cases are supported by an After the Event (ATE) insurance policy, covering all costs and disbursements if the case is unsuccessful. Additionally, upfront interest is charged, debentures are in place and there is an assignment over the case proceeds.

How has Fenchurch emerged and established itself in this market, and what key strategies contributed to its growth?

Our key strategy is to have a niche focus on smaller claims within specific case types where we have a deep understanding and only partnering with fully vetted law firms. Recognizing growing interest in litigation funding as an alternative asset class, Fenchurch strategically lowered investment entry barriers making it a more accessible investment solution. This has enabled us to broaden our investor base, enabling us to raise more capital and support a wider range of law firms seeking funding.

How have you seen the landscape of small ticket litigation funding evolve, and what trends do you anticipate for the future?

There's a noticeable shift towards recognising the significance of smaller-scale claims in the funding market. I anticipate the market to continue its expansion into new case types beyond traditional areas but with that will come changes in the regulatory landscape, potentially impacting market dynamics and requiring adaptation from funders. As a funder specialising in small ticket claims, especially those funded at volume, staying ahead of regulatory changes is important. We remain cautious about specific case types, recognising that shifts in litigation trends could render a case type unviable, as witnessed in the Road Traffic Cases (RTA) cases when fixed costs were brought in. Funders must develop a broad network of contacts to stay informed about evolving market conditions. Another trend I see growing is wider tech adoption within the industry. Technology is playing a pivotal role in streamlining processes, enhancing risk assessment and driving efficiency and scalability. Recognizing the limitations of off-the-shelf solutions, we developed our own loan management software, providing a bespoke platform for managing loan repayments, monitoring, and onboarding. Continued tech integration is needed to enable automation, boost efficiency, enhance risk assessment capabilities, and improve investor reporting. I also see increased awareness and interest from investors. I think small-ticket litigation funding will become increasingly more attractive as investors become more familiar with the potential benefits and opportunities, resulting in a rise in investment inflows. Lastly, the focus on Environmental, Social, and Governance (ESG) considerations is likely to gain prominence, influencing investment decisions and funder strategies. The growing recognition of the value and impact of small-ticket litigation funding aligns with ESG requirements.

What sets Fenchurch Legal apart from other funders? What are your unique value propositions?

Our core strength lies in our deep understanding of the small-ticket claims landscape. We have developed a rigorous and data-driven selection process tailored to this specific segment, allowing us to identify top-tier law firms and high-potential case types with lower individual risk profiles. Through discussions, we've learned that law firms often face challenges with other funders, including issues like complex drawdown procedures, undisclosed fees, and the non-funding of crucial costs like WIP capital or case acquisition expenses. Recognizing these pain points, we've developed an offering specifically designed to avoid these issues. As mentioned before having access to our own proprietary software has been a game-changer. It has significantly enhanced our whole business operations, driving efficiency and enabling us to scale. This technological edge not only sets us apart but also positions us as an innovative and forward-thinking player in the industry. Additionally, our team is a vital component of our unique value proposition. Made up of experienced professionals who understand the industry, our team ensures we look thoroughly at both legal merit and financial viability. This dual expertise ensures that every funding decision is based on a thorough understanding of the legal intricacies and financial soundness of each case.

Could you elaborate on your approach to case selection and investment criteria?

Our selection process is multi-layered, considering both legal merit and financial viability. In the initial stages, we conduct an in-depth evaluation of case strength, law firm expertise, financial strength and claim history, while also examining the specific legal and procedural landscape surrounding each claim. After completing the underwriting process, we grant each firm a facility limit. They can regularly draw down against this limit, as long as they adhere to the terms of the agreement, including providing a list of claims for auditing and granting us access to their systems. We also employ robust financial modelling and stress testing to evaluate potential returns and manage risk effectively. This approach ensures we invest in case types with strong success potential and manageable risk profiles. So far, we’ve funded various case types with strong merits, including Plevin, Motor Finance Mis-selling (PCP), Tenancy Deposit Schemes, and Housing Disrepair claims. Our compliance criteria for each case type involve thorough vetting, examining details such as case referrals, fee earners, and the experience of law firms. This process enables us to partner with trusted law firms, further mitigating risks associated with our investments. Importantly, Fenchurch Legal only provides funding for cases where After the Event (ATE) insurance has already been obtained. This insurance covers costs and disbursements in the event of an unsuccessful claim. By advancing the premium directly to the ATE Insurer, we ensure that each policy is live at the time of funding, adding an extra layer of security to our investment strategy. This unique security feature enhances the attractiveness of funding ATE claims, aligning with our commitment to minimising associated risks.

The recent PACCAR ruling in the UK has sparked discussions about the future of litigation funding. What are your thoughts on its implications and potential impact on the industry?

The recent PACCAR ruling didn’t impact Fenchurch as our small ticket business model is focused on charging a fixed return per case, regardless of the outcome and not a percentage of damages recovered. However, whilst the ruling presents certain challenges, I believe it ultimately presents an opportunity for the industry to strengthen its practices and regulations.

Could you share your vision for Fenchurch Legal's future growth and expansion plans?

We plan to maintain our focus on small-ticket litigation funding, leveraging our experience, growing our loan book, and onboarding new borrowers. As the business grows, we plan to deploy more capital aiming to reach a loan book value of £75 million within the next two years. We will also recruit key roles to bolster our team.

Lastly, for investors considering small ticket litigation funding, what key factors should they take into account, and how can Fenchurch Legal add value to their investment strategies?

For investors contemplating small ticket litigation funding, several key factors should be carefully considered to make informed and strategic decisions. Firstly, understand the specific criteria and due diligence processes the litigation funder uses and pay attention to their track record in managing and funding small ticket claims.  Risk management is vital and investors should seek funders with robust strategies in place. This includes an assessment of how the funder mitigates risks associated with smaller claims and adapts to changing circumstances. In the case of Fenchurch Legal, our approach to small-ticket litigation funding is grounded in a commitment to comprehensive due diligence, case assessment, and risk management. We have created an offering suitable for investors seeking diversification, lower risk profiles, access to a broader market, and lower entry points.
Read More

Litigation Finance Firm Invests €25 million into Spanish Legal Tech Business

By John Freund |
A Manchester firm has signed a groundbreaking €25 million deal to support a pioneering Spanish legal tech company, renowned for its expertise in handling claims related to cartel price fixing.
In a bid to increase access to justice across Europe, IQuote Limited will provide financial backing to Málaga based Cartel.es as it looks to expand across the continent. The Spanish company, which is the trading name of LegalTech Ventures S.L, was founded to tackle the vehicle cartel price-fixing scandal, which implicated 23 vehicle manufacturers from 2006 - 2013.
For two decades, Spain has seen a rise in these cartels involving companies in the same sector covertly fixing prices, sharing territories and customers, and exchanging sensitive commercial data.
The scandal, brought to light by the National Markets and Competition Commission (CNMC) in 2015, is thought to impact about 9.7 million consumers in Spain. This latest agreement to supply a funding facility of up to €25 million, is aimed to support Cartel.es in its expansion across Europe.
Craig Cornick, IQuote’s CEO and founder, said the investment is a strategic move to help more people across Spain obtain the justice they deserve. “Cartel.es is doing a very important job for the people affected by these corporate cartels and we couldn’t be prouder to be supporting the firm’s mission. The investment will not only provide financial backing to the company but also make justice a tangible reality for those in Spain and beyond.”
Cartel.es has made significant investments in proprietary technology allowing it to assess and quantify each claimant before court proceedings, facilitating faster resolutions. Co-founder and Chief Investment Officer, Adam Peake, said: “We are very proud of the work that we do.  These types of claims are not easy to approach so we are very excited to be partnering with IQuote, which has such a track record when it comes to complex legal matters.
“We’ve seen tremendous success so far and we’re looking forward to IQuote’s support and expertise in making lasting contributions to the European legal landscape, bringing justice closer to more people.”
Founded in 2016, IQuote Limited, specialises in legal asset and opex capital loans, with a primary focus on legal asset investing. The firm is constantly pushing for inventive solutions and investment opportunities to firms in the legal, technology and customer service sectors.
Mr Cornick added: “It is very important for us to champion businesses that put in great effort to help people access justice, it’s the core of what we do. With this investment and future expansion into Europe we are committed to bridging the gap between individuals and their right to legal resource. We’re hoping to keep growing the company and continue our mission to break down barriers to justice across the globe.”
Read More

Litigation Funding Bill Introduced in House of Lords

By John Freund |
Earlier this month, the UK government announced that it would introduce legislation to protect litigation funding by reversing the impact of the Supreme Court’s decision in PACCAR. Whilst it was uncertain at the time of the announcement how quickly the government would move forward with these plans, we have now seen that no time has been wasted to introduce simple legislation to Parliament. Earlier this week, the Litigation Funding Agreements (Enforceability) Bill 2024 was introduced in the House of Lords, delivering on the government’s promise to roll out new legislation to reverse the effects of the Supreme Court’s PACCAR ruling. HL Bill 56, ‘a Bill to amend section 58AA of the Courts and Legal Services Act 1990 to make provision about the enforceability of litigation funding agreements’, was introduced by Lord Evans of Rainow on 19 March 2024. The text of the bill is succinct and only makes two amendments to subsection (3) of section 58AA of the Courts and Legal Services Act, with the first being to insert the following text after paragraph (a): “an agreement is not a damages-based agreement if or to the 5 extent that it is a litigation funding agreement.” The second amendment, which is to be inserted after subsection (3), provides a straightforward definition of a litigation funding agreement with regards to the roles of the funder and the litigant within such agreements.  The bill states that these amendments ‘are treated as always having had effect.’ The second section of the draft legislation also clarifies that this act applies solely to England and Wales, and that it ‘comes into force on the day on which it is passed.’ The bill was introduced on 19 March and had its first reading in the House of Lords, and according to the UK Parliament website, it now has a second reading scheduled for 15 April 2024. The second reading of the bill allows for a general debate on the details of the bill.

Member Spotlight: Ziad Mouallem

By John Freund |

Ziad Mouallem is the Founder & Operator of Practiclaim. Ziad is a Legal Entrepreneur, International Dispute Resolution Specialist, and Legal Innovator & Strategist, with a specific experience in Litigation Finance, Arbitration, ISDS, Enforcement, ADRs, ClaimTech, Legal Systems Design & Engineering, Legal Ops & Products Advisory, and Claim Management & Strategy.

Company Name and Description: Practiclaim

Practiclaim is a multidisciplinary Alternative Legal Claims Service Provider (ALCSP), offering comprehensive end-to-end solutions on a mandate-led basis.

We act as a claims incubator, aiding companies, their in-house functions, claim funders and service providers in efficiently sourcing, managing, optimizing, and realizing legal claims, with a particular focus on international arbitration, cross-border, and multi-jurisdictional business disputes.

Our services include cost-efficient Enterprise Legal Services (ELS) and Legal Process Outsourcing (LPO), ranging from free initial prevention and assessment, through optimized multi-sourced due diligence, to flexible-value-based-fee legal representation, enforcement, and financing/monetization options.

Company Website: www.practiclaim.com

 Year Founded: 2019

Headquarters: Dubai, UAE

Area of Focus: Claim and dispute management and advisory, claim due diligence, pre-contentious risk management, legal representation support, international arbitration, ISDS, complex litigation, cross-border disputes, enforcement, recovery, international law, dispute resolution, early case assessment, legal tech, claim tech, justice tech, enterprise legal process outsourcing, legal help, claim value maximization, corporate & consumer access to justice, expert in-house support, legal claims solutions, managed legal services, value-driven fee optimization, decentralized justice, know your claim, team aggregation & resources allocation, legal procurement solutions.

Member Quote: "In the dynamic realm of legal claims and dispute resolution, funding solutions serve as the linchpin for ensuring access to justice for corporations and consumers alike. Subject to ongoing economic market adjustments, they enhance accessibility, ensure equitable legal support, facilitate legal mobility for claims, and evolve further into merged service offerings within claim service providers. These endeavors collectively reinforce the foundation of a genuinely just society."
Read More

Mass Tort Industry Leader Nicholas D’Aquilla Joins Counsel Financial

By John Freund |

In a strategic move to bolster its litigation finance and loan servicing capabilities, Counsel Financial welcomes Nicholas (Nick) D’Aquilla, Esq. as its new Managing Director. With over a decade of experience in the mass tort industry and as a former civil defense litigator for the Louisiana Department of Justice, D’Aquilla brings a wealth of knowledge and a proven track record of success to the Counsel Financial leadership team.

D’Aquilla has distinguished himself as a leading figure in administering complex settlements, contributing to the administration of more than $20 billion in mass tort settlements across many high-profile cases. His expertise in solution design and oversight services has contributed to the resolution of more than 40 mass tort and class action litigations, spanning environmental, pharmaceutical, medical device, and sexual assault matters.

D'Aquilla will focus on enhancing Counsel Financial's mass tort underwriting processes and loan servicing offering, enhancing the development of valuation models based on historical settlement data. He will also leverage his experience as a consultant for multiple legal technology companies to help drive continued refinement of the company's servicing platform.

“Adding Nick to our team marks a significant enhancement of our litigation finance and loan servicing offerings,” said Paul Cody, President & CEO of Counsel Financial. “Coupling our team’s 200+ years of legal, financial and litigation experience with Nick’s knowledge and insight into the mass tort sector provides unparalleled resources that can be leveraged by both our law firm clients and institutional investors utilizing our servicing platform.”

Before joining Counsel Financial, D’Aquilla played a pivotal role in a complex settlement fund advisory team for a national bank, where he developed innovative underwriting methodologies that enabled credit extensions to mass tort plaintiffs’ firms. There, he also analyzed and valued over $1.5 billion in loan collateral derived from mass tort dockets.

About Counsel Financial

Counsel Financial is an industry leader in originating, underwriting and servicing loans and other financing solutions for contingent fee law firms. For over two decades, Counsel Financial has provided more than $2 billion in capital investments across 300+ law firms. These investments have financed the growth of firms in every area of plaintiffs’ litigation, including personal injury, mass torts, class action and labor and employment.

Read More

Highlights from Brown Rudnick’s Litigation Funding Conference 2024

By John Freund |
Last week, Brown Rudnick hosted its third annual European Litigation Funding Conference, proving once again to be one of the premier gatherings of industry thought leaders and executives. The one-day event featured an agenda full of insightful discussions, as senior representatives from funders, law firms, insurers, and other industry firms, all provided their perspectives on the most pressing issues facing the European funding market. The conference served as a reminder of the growing interest in litigation finance, as the venue was packed with attendees and without an empty seat in sight at the start of proceedings. Before the panel discussions began, the event kicked off with a keynote speech from Camille Vasquez, partner and co-chair of the brand & reputation management group at Brown Rudnick. Vasquez, who gained international recognition for her involvement in the Depp v. Heard trial, offered an alternative perspective on litigation funding, exploring its potential use in defamation cases brought by high-profile individuals or companies. As Vasquez explained, whilst it is commonly assumed that celebrities and other public figures have access to large amounts of liquid capital, this is often not the case. In such situations, Vasquez suggested that litigation funders may be able to play a crucial role in supporting high-profile plaintiffs who are eager to pursue defamation litigation but lack the funds to seek justice. A Post-PACCAR World and the Future of Regulation Unsurprisingly, the hottest topic at the litigation funding conference was the ongoing impact of the Supreme Court’s PACCAR ruling and the recent announcement by the UK government that it would introduce legislation to reverse the effects of that decision on litigation funding.  Looking at the long-term impact of the Supreme Court’s decision, Susan Dunn from Harbour provided the quote of the morning, when she emphatically stated that the PACCAR ruling would be remembered as “a footnote in history, not a chapter.” Similarly, Nicholas Bacon KC of 4 New Square Chambers, described it as “a blip in the landscape” of the UK funding market, and pointed out that the situation had in some ways had positive effects as it had brought wider public attention to litigation funding. However, speakers across the day recognised that PACCAR had created unnecessary uncertainty for investors considering engaging with the UK market, and had created fresh talking points for the most vocal opponents of third-party funding. NorthWall Capital’s Alexander Garnier reported that the Supreme Court’s judgement had “made people more nervous about investing in the UK and London”, because it had increased the risk of investments or had increased the perception of those risk levels. According to Professor Rachael Mulheron KC, another negative side-effect of the decision has been the “unfortunate conflation between regulation and PACCAR,” which has made productive discussions around the future of industry oversight more challenging. As the event’s participants discussed the effects of PACCAR, these exchanges naturally turned to the government’s announcement of new legislation and a potential review into the litigation funding market. With the review suggesting the possibility of enhanced regulation of third-party funding, Woodsford’s Charlie Morris admitted that this aspect of the government’s announcement was unfortunate, as it had “given an opportunity for the anti-funding lobby” and compared it the “politically motivated campaign” that took place in Australia to crack down on litigation funders. As to what future regulations could (or should) look like, speakers at the conference were divided on certain issues such as a potential cap on the level of returns a funder could take from any award or damages. Morris once again emphasised the need to avoid “broad brush statutory prohibitions”, whilst Dunn firmly argued that a cap on funders’ returns “should not be part of any regulation.” In contrast, Garnier expressed an openness to some form of cap, explaining that he would “welcome clarity” on industry regulations, “even if it involves a regime that includes a cap on damages.” Offering the most succinct perspective on the funding industry’s view of new legislation, Matthew Lo from Exton Advisors argued that there is “nothing to be afraid of about regulation in general, but the devil is in the detail.” On a similar note, Professor Mulheron suggested that the most important thing for any government plans to introduce new regulations is that “funders have to be around the table” for these discussions. The Impact of the Post Office Scandal Closely tied to the UK government’s ongoing attempts to soften the blow of PACCAR, is the role played by the Post Office scandal and the impact it had on bringing the vital role of litigation funding in securing access to justice to the public’s attention. One of the highlights of the day’s discussions was the insight provided by Neil Purslow of Therium, who offered a fascinating account of the funder’s involvement in the sub-postmasters litigation and expressed some frank reflections on the ways it had highlighted the nefarious tactics of defendants. Purslow described the case as a perfect example of a defendant “spending money on lawyers rather than doing the right thing”, and noted that the Post Office had spent £100 million to fight the case rather than actually providing compensation to the victims upfront. Purslow emphasised this fact in combination with a rebuttal of the oft-repeated claim that Therium had taken 80% of the damages awarded to the sub-postmasters, explaining that the actual return for the funder was around 41%. In light of these facts, Purslow described the arguments in favour of a broader cap on funders’ fees as “nonsense”, and instead highlighted the case as yet another instance of defendants taking “a scorched earth approach to litigation.” Purslow concluded his contribution to the day’s discussion by recognising that whilst the PACCAR decision had been “a self-inflicted wound”, the industry and government’s reaction has clearly demonstrated that the UK “is a jurisdiction that is supportive to litigation finance.” Furthermore, Purslow praised his fellow litigation funders for “working together collaboratively and sharing ideas” to protect the UK funding industry, and highlighted the value of institutions like ILFA in providing a powerful voice that could “address the issue and get the government to act.” Economic Pressures, Corporate Cases and Law Firm Funding During the day’s panel discussions, speakers offered their views on the trends, opportunities and challenges that industry participants have seen over the last twelve months. As many industry leaders have spoken about in the last year, whilst litigation funding is broadly seen as an uncorrelated asset class, that does not mean that it has been, as Matthew Lo put it, “immune to the wider economic environment”. The majority of panellists agreed that the rise in interest rates had continued to apply pressure on funders’ pricing, which then increased cost of financing creating challenges for those funders looking to raise capital. However, due to these challenging economic conditions, speakers noted that there has been an increase in demand for funding from law firms and corporations, both of whom are facing similar budget pressures whilst still looking to manage their litigation strategies. As Christiane Deniger of Burford Capital explained, many listed companies are actively seeking funding for a portfolio of cases and are “ready and willing to not spend their own money if they can take ours.” Rocco Pirozzolo from Harbour Underwriting added that these corporate cases were often attractive, because key decision makers at these companies share the funder’s perspective that “they have to be commercial and they have to be reasonable.” When it came to working with corporate GCs and CFOs, there was a broad consensus among the industry leaders present that there was still plenty of work to do around educating these inhouse decision-makers on the nuances of litigation funding. Ayse Yazir from Bench Walk noted that there is often still “concern over the control of the case”, with critics of the litigation finance industry contributing to fears that funders would seize control of the litigation process. Nathaniel Cortez of Moelis acknowledged that whilst these corporate leaders “don’t need to be experts on litigation finance”, it was clear that many GCs and financial directors did not “understand the breadth and depth of the industry”. The discussions focused on law firm funding proved to be some of the most enlightening exchanges of the conference, with funders and lawyers alike sharing their perspectives on some of the unique challenges and opportunities that this avenue of investing entailed. Hugo Lestiboudois from SYZ Capital made a clear delineation between straightforward litigation financing and the process of lending directly to law firms. He explained that law firm funding “is not as commoditised as litigation finance is today”, with investors needing to approach it from a business perspective and often having to “compete on terms, rather than on price.” Reinforcing this viewpoint, Chris Benson from Leigh Day argued that this type of funding crucially involves “getting lawyers to think like economists”, and acknowledged that this can be challenging as “a lot of lawyers have no interest in finance.” Looking at the practical steps involved in law firm funding, both in terms of the due diligence undertaken pre-funding and the ongoing monitoring and reporting that must take place post-funding, the speakers once again provided useful insights. Joshua Katz from Gramercy said that from his firm’s perspective, part of the journey was understanding the law firm’s wider strategic objectives, saying that Gramercy recognised that for a firm there are “some cases you should pursue even if they’re not economical, for the greater good.” Similarly when it came to the ongoing relationship between the funder and law firms, it was not only crucial for practical issues like reporting systems to be in alignment, Lestiboudois highlighted the need for a “cultural fit” between firms. A High Benchmark for Industry Conferences By the end of the day, the event’s attendees had been treated to a plethora of engaging discussions across seven separate panels, bolstered by plenty of opportunities for networking and connections between sessions. The full scope and detail of every speaker’s insights could not be encompassed in this single overview of the day’s proceedings, but by the time the agenda concluded with informal refreshments, the conference had succeeded in providing an impressively diverse array of perspectives on litigation funding in Europe. Brown Rudnick’s third European Litigation Funding Conference proved to be an enlightening experience for those in attendance, with the proceedings expertly guided by the conference chair Elena Rey and fellow moderators from Brown Rudnick, who skilfully guided the event’s packed schedule. LFJ’s team were delighted to meet with fellow attendees who expressed their enjoyment of the event, and we are already looking forward to covering next year’s iteration of Brown Rudnick’s conference.
Read More

Legal Finance Firm Set to Reboot Industry with Multi-Million Pound Investment in AI-Tech.

By John Freund |
A leading litigation finance firm is investing circa £2m into AI technology as the company looks to continue its meteoric global growth.  Nera Capital, which has offices in Dublin, Manchester and a newly established presence in The Netherlands, plans to significantly enhance its process optimisation and strengthen data analytics.  The investment is expected to significantly benefit the various law firms across Europe, UK and the US that are currently partnered with the company as it seeks to expedite the legal process and ultimately create greater access to justice.  Director Aisling Byrne highlighted the impact of technology on the company’s future plans: "Our investment in AI shows our commitment towards efficiency and innovation.  "We believe this increase in investment will enhance our entire operations, revolutionising further the way we approach various aspects of our business. By leveraging advanced AI technologies, we aim to further streamline processes, boost efficiency, and drive innovation across the board. The decision is a huge step forward, and I am proud of our continued commitment to staying at the forefront of advancement in legal technology.” Since the company’s inception in 2011, Nera Capital has grown to become a major global player in the world of litigation finance, with operations across several European locations. The company is a specialised funding provider catering to law firms by extending support across diverse claim portfolios such as financial mis-selling, data breach, Cartel damages, personal injury and Antitrust. 

It previously announced the creation of 10 new jobs in key areas including legal, auditing, finance and origination, after opening a new office in Weert, Netherlands. Aisling added: “I take immense pride in witnessing the remarkable growth of Nera Capital as it expands worldwide.

“In the face of a rapidly evolving world, our industry has often been considered slow to adapt in relative terms. We are determined to break free from that inertia and lead the charge towards meaningful change. By embracing cutting-edge AI technology, we have entered a transformative chapter for our firm. The fusion of innovation and data-driven insights empowers us to navigate legal landscapes with even greater efficiency, ensuring our partnered law firms receive the swift and insightful solutions they deserve which can hopefully speed up the justice process for those that need it.” 

Nera Capital are expected to look at further expansion into new locations in the near future. 

About Nera Capital

  • Established in 2011, Nera Capital is a specialist funding provider to law firms.
  • Provides Law Firm Lend funding across diverse claim portfolios in both the Consumer and Commercial sector.
  • Headquartered in Dublin, the firm also has offices in Manchester and The Netherlands.
  • www.neracapital.com
Read More

Member Spotlight: Louisa Klouda

By John Freund |

Louisa Klouda is the founder and CEO of Fenchurch Legal. She set up the business in early 2020, after identifying a gap for additional small-ticket litigation funders in the UK market.

Louisa is responsible for day-to-day operations, strategic direction and capital raising. Louisa's expertise in sourcing, underwriting and managing borrowers, as well as attracting investor capital has been instrumental in Fenchurch Legal's growth.

 

Prior to setting up Fenchurch Legal, Louisa worked within corporate finance, specializing in the asset backed lending industry. She managed the broking and dealing desk for secured debt securities, structured various investment products and facilitated some large M&A transactions.

About Fenchurch Legal: Fenchurch Legal is a UK-based litigation financier, specialising in providing disbursement funding to small to medium-sized law firms in the UK. The financing funds small ticket ATE (“After the Event”) cases and covers associated disbursements, all backed by ATE insurance policies. Their focus on smaller claims, often overlooked in traditional funding, ensures that even modest claims, like housing disrepair claims receive the backing necessary to navigate the legal process, ultimately facilitating access to justice and contributing to a more balanced and inclusive legal landscape. Understanding law firm needs, Fenchurch Legal delivers solutions to remove pain points and has developed an offering to avoid problems such as complex drawdown procedures, undisclosed fees, and non-funding of crucial costs like WIP capital. In addition to collaborating with borrowers, we extend the opportunity to investors to invest in this unique market. Fenchurch Legal sets itself apart with a focus on smaller-ticket claims, flexible entry points, and robust security features, making it an accessible and attractive choice for those seeking alternative investment opportunities. The company continues to innovate and has recently developed its own loan management software, providing a bespoke platform for managing loan repayments, monitoring, reporting and onboarding –  significantly enhancing the whole business operations, driving efficiency and enabling the business to scale. Company Website: https://www.fenchurch-legal.co.uk/ Year Founded:  2020 Headquarters:  London Area of FocusFenchurch Legal is solely focused on funding smaller cases with an established legal precedent at high volumes. These protocol-driven consumer claims (housing disrepair, Plevin, PCP, financial mis-selling) offer a high potential for success. Member Quote: “The funding market is increasingly recognising the importance of smaller claims. Small ticket litigation funding plays a vital role in the UK legal landscape, offering an alternative approach to financing legal claims. Small-ticket funders like Fenchurch Legal focus on quantity, funding a high volume of smaller cases. Our core strength lies in our deep understanding of the small-ticket claims landscape. We have developed a rigorous and data-driven vetting process tailored to this specific segment of litigation funding, allowing us to identify top-tier law firms and high-potential case types with lower individual risk profiles. At Fenchurch Legal, we believe in the transformative power of small-ticket disbursement funding, and our commitment extends to both law firms and investors. Small-medium law firms can take on cases that might otherwise go unfunded whilst providing an avenue for investors looking for alternative investment opportunities within the litigation funding market.”
Read More

Zachary Segal Joins LCM as an Investment Manager

By John Freund |
Litigation Capital Management (LCM) has announced that Zachary Segal has joined the team as an Investment Manager. In a post on LinkedIn, LCM announced the new hire to their over 3,600 followers. Segal has more than 20 years of experience in the legal profession, specializing in all forms of dispute resolution, and in particular international arbitration, including investor-state disputes, and commercial litigation. LCM hopes that with his impressive background, he will play a key role in driving LCM’s growth and success. The team at LCM wrote: "We are thrilled to have Zach onboard and look forward to the valuable contribution he will make to our team."
Read More

DELTA CAPITAL PARTNERS WELCOMES ACCOMPLISHED PRIVATE EQUITY FUND PROFESSIONAL AS CHIEF FINANCIAL OFFICER

By John Freund |
Delta Capital Partners Management, a global private equity firm specializing in litigation and legal finance, is pleased to announce that Jonathan Patrick has joined the firm as its Chief Financial Officer and Chief Compliance Officer.  Patrick will be based in the firm’s Chicago headquarters. Patrick will oversee Delta’s finance, accounting, compliance, human resources, and administrative functions; and will work closely with senior management on all capital market activities, tax and valuation matters. Prior to joining Delta, Patrick served for over 10 years as the Controller of EnCap Investments, a leading provider of private equity growth capital (over $20 billion of AUM) to independent energy companies, focusing on treasury, fund operations and management company financial reporting.  Additionally, Patrick spent over five years in public accounting, including time at Deloitte in their Audit and Enterprise Risk Services practice, and has experience in the Treasury and SEC Financial Reporting functions for Ares Management in Los Angeles. Christopher DeLise, Delta’s Founder, CEO, and Co-CIO stated that “Delta is incredibly pleased to have someone of Jonathan’s caliber and expertise join the firm as we continue to scale our business to increase market share and better serve our investors and customers across the globe.  Jonathan’s experience and responsibilities at EnCap will enable him to bring best practices in the areas of private equity, capital markets, and finance to Delta in anticipation of our significant planned growth in 2024 and beyond.” “I am excited to join and look forward to applying my experience and skillset to Delta Capital Partners.  Collaborating with the established team here is such a great opportunity and I am eager to be part of this growth.” said Patrick. About Delta Delta Capital Partners Management LLC is a US-based, global private equity firm specializing exclusively in litigation and legal finance, judgment and award enforcement, and asset recovery.  Delta creates bespoke financing solutions for professional service firms, businesses, governments, financial institutions, investment firms, and individual claimants to enable them to investigate claims, pursue litigation or arbitration, recover assets, enforce judgments or awards, and more effectively manage their risks, cash flow, and capital expenditures.
Read More

DELTA CAPITAL PARTNERS WELCOMES ESTEEMED PRIVATE EQUITY AND ASSET MANAGEMENT PROFESSIONAL TO ITS BOARD OF ADVISORS

By John Freund |
Delta Capital Partners Management, a global private equity firm specializing in litigation and legal finance, is pleased to announce that effective March 1, 2024, Anthony Donofrio has joined its Board of Advisors. Prior to joining Delta, Donofrio spent 16 years as the Managing Director, Head of Legal Transactions, and Chief Operating Officer of Co-Investments at Hamilton Lane Advisors, one of the world's leading private markets investment management firms with over $900 billion of assets under management and supervision.  In his capacity as Head of Legal Transactions, Mr. Donofrio led a team of attorneys in the negotiation and execution of thousands of private equity primary, secondary, and co-investment transactions and private market credit investments.  As the Chief Operating Officer of Co-Investments, Mr. Donofrio oversaw all operational aspects of Hamilton Lane’s $5 billion co-investment strategy, with both the team and assets under management of the program more than doubling in size during his tenure. Christopher DeLise, Delta’s Founder, CEO, and Co-CIO stated that “Delta is honored to have such a respected and accomplished private equity and asset management professional join its Board of Advisors.  One of the things that sets Delta apart from other litigation funders is the strength, depth, and accomplishments of its Board.  Anthony is a welcomed addition to such an esteemed group and we very much look forward to benefitting from his wisdom, experiences, and talents for many years to come.” “It is an incredible privilege to join Delta’s Board of Advisors.  I am energized to work alongside Chris and the rest of Delta’s best-in-class team, and I look forward to contributing my private equity and legal experience as Delta continues to execute its global growth strategy,” said Donofrio. About Delta Delta Capital Partners Management LLC is a US-based, global private equity firm specializing exclusively in litigation and legal finance, judgment and award enforcement, and asset recovery.  Delta creates bespoke financing solutions for professional service firms, businesses, governments, financial institutions, investment firms, and individual claimants to enable them to investigate claims, pursue litigation or arbitration, recover assets, enforce judgments or awards, and more effectively manage their risks, cash flow, and capital expenditures.
Read More

Analyzing the Potential Impact of Florida’s Litigation Funding Bill

By John Freund |
Florida is one of the latest US states to see the introduction of draft legislation focused on the regulation of litigation finance. Whilst the bill is currently stalled within the Florida legislature, it is important to consider what impact such a piece of legislation would have, if it is eventually signed into law in its current form. An insights piece from John J. Hanley, partner at Rimon Law, examines the current draft legislation making its way through the Florida legislature, which aims to place new guidelines and restrictions on the use of third-party litigation funding in the state. Hanley begins his analysis by noting that this bill has been the subject of intense lobbying, with 67 lobbyists from interest groups and industry associations contributing to the debate over the legislation. Looking at the core features of the Litigation Investment Safeguards and Transparency Act (LISTA), Hanley points out that the idea the bill is designed to protect consumers is misguided, as the focus of the legislation is directed towards commercial litigation finance arrangements.  Hanley also explains that whilst the bill prohibits various ways funders could control the litigation process, these are largely superfluous measures, given that every funding agreement that Rimon has reviewed already contains these provisions. Similarly, the legislation’s prohibition on funders paying commissions or referral fees is not expected to have a significant impact on the industry, because these commissions ‘are paid by the party receiving funding and not the funder.’ On the bill’s requirement that funders should not receive a larger portion of any damages or award than the plaintiffs themselves, Hanley states that ‘this is a good idea’ and highlights that many ‘reputable funders are already striving to achieve this.’ In contrast, Hanley says that the legislation’s ban on the assignment or securitization of funding agreements ‘is probably the worst feature of LISTA.’ He argues that if such a prohibition were enacted, it would ‘kill liquidity and make it difficult for funders to allocate capital which in turn will drive up pricing and further hurt small business in Florida seeking to fight deep pocketed defendants.’

Burford Capital Reports Record 2023 Results

By John Freund |
Burford Capital Limited ("Burford"), the leading global finance and asset management firm focused on law, today announces its fourth quarter and full year 2023 results. In addition, Burford has made available an accompanying fourth quarter and full year 2023 results presentation, a shareholder letter and capital provision-direct and capital provision-indirect asset data tables on its website at http://investors.burfordcapital.com. Christopher Bogart, Chief Executive Officer of Burford Capital, commented: "Burford had an extraordinary year. Our earnings per share rose 19x to $2.74, driven by a tripling of consolidated total revenues to $1.1 billion in 2023 due to significant growth in capital provision income, with and without our YPF-related assets. We achieved a Burford-only net income margin of 63%. With the courts fully back in business, we had an active year and we anticipate further substantial levels of activity in 2024 and 2025. Increased portfolio velocity was reflected in record core legal finance realizations, cash receipts and realized gains, as well as sizeable unrealized gains arising from the portfolio moving forward. Our ROTE soared to 32% in 2023 from 2% in 2022, and we increased tangible book value by 34% to $9.85."
Read More