John Freund

By John Freund | February 29, 2024

Ever since the landmark $16 billion judgement in the Argentina YPF case, the majority of commentary and discussion has focused on just one question: will it be possible to enforce a judgement of this size? With Burford Capital having previously pressured the court to begin the asset seizure process, it now appears the funder is exploring innovative routes to seeing the Argentine government satisfy its payment obligations. An article in Buenos Aires Times covers the latest developments in Burford Capital’s campaign to collect on the mammoth $16 billion judgement, as the funder is reportedly investigating using Argentina’s $18 billion currency swap line with China to satisfy the outstanding debt. No details are offered as to how this particular mechanism could be leveraged, but Burford filed an information request in federal court in New York on Tuesday, which ‘sought information on various overseas assets held by Argentina.’ Burford has reportedly filed at least 30 of these information requests and is seeking details around ‘YPF shares and dividends paid by the company, overseas commercial transactions and bank accounts, and reserves of gold and precious metals held abroad.’ Burford’s lawyers have stated that Argentina has refused to respond to any requests for information on assets held by the country’s Central Bank, with the governments stating these assets are ‘immune from attachment.’

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Announcements Commercial

Omni Bridgeway Releases Interim Financial Report

By John Freund | February 29, 2024

The Directors present their report (referred to hereafter as the “Interim Financial Report”), together with the financial statements, on the consolidated entity (referred to hereafter as the "consolidated entity" or "the Group") consisting of Omni Bridgeway Limited (referred to hereafter as "OBL", "the Company" or "the Parent") and the entities it controlled at the end of, or during, the half year ended 31 December 2023. Directors The names of the Company's Directors in office during the half year ended 31 December 2023 and until the date of this report are as below. Unless stated otherwise, the Directors were in office for this entire period. Michael Kay - Non-Executive Chairman Andrew Saker - Managing Director & CEO (retired 26 October 2023) Raymond van Hulst - Managing Director & CEO (appointed 26 October 2023), former Executive Director and Co-Chief Investment Officer – EMEA Michael Green - Non-Executive Director Karen Phin - Non-Executive Director Christine Feldmanis - Non-Executive Director Highlights for the half year ended 31 December 2023 Operational highlights1

US$485 million2 first close of Fund 4 and Fund 5 series II capital raise on improved cost coverage terms.
€135 million first tranche of debt capital raised for our €300 million Fund 8, focused on global enforcement investments.
Significant expansion of our capabilities in the UK, the world's second largest litigation finance market.
Investment income of $235.7 million, including income yet to be recognised, with $50.1 million provisionally attributable to OBL.
12 full completions, 6 partial completions, and a secondary market transaction achieving an overall MOIC of 2.4x, and an IRR of 55%.
US$21.5 million cash proceeds from the sale of a 25% interest in a portfolio of 15 intellectual property (IP) investments in Fund 4.
$260 million of new investment commitments with 38% improved pricing on FY23.
$182 million strong pipeline of new investment opportunities representing a further 29% of our commitments target for the year ending 30 June 2024.
Possible investment completions with an estimated portfolio value (EPV) of $5.1 billion over the next 12 months (rolling period).
Total cash and receivables of $291.2 million; OBL only cash and receivables of $122.4 million ($80.9 million in OBL balance sheet cash and $40.1 million of OBL share of cash and receivables within Funds), plus $60 million in undrawn debt.

Financial highlights3

Total income of $135.8 million (including a net gain on deconsolidation of the Fund 4 IP portfolio) derived from diversified sources comprising litigation completions, a secondary market sale, management fees, and interest revenue.
Group profit after tax (before non-controlling interests (NCI)) of $33.4 million (1H23: $30.1 million loss after tax); with $47.6 million loss attributable to OBL (the Group’s equity holders) and $81.0 million profit attributable to NCI.
Employee expenses of $34.4 million decreased 12% due to team optimisation, a reduction in contractors and higher capitalised costs of investment managers.
Corporate overheads of $9.0 million increased 4% due mainly to the amortisation of the Fund 8 insurance premium, notwithstanding significant reductions in other corporate overhead expenses.
Carrying value of litigation investments of $654.7 million (30 June 2023: $596.7 million) across 285 funded litigation investments. Negative case developments including lower than anticipated income, extended duration and adverse milestones associated with a funded law firm portfolio have resulted in a $44.9 million reduction of the carrying value.

1 Represents non-IFRS information. Here Fund 5 is presented at 100% for consistency of presentation across OBL’s Funds. 2 Inclusive of OBL’s co-funding (OBL’s commitment of US$100 million to each Series II fund is capped at 20% of the ultimate fund size (i.e. after further closings). 3 Per the Group Consolidated Financial Statements. The full Interim Financial Report can be read here. The full 1H24 results Investor Presentation can be read here.

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Commercial Special Features

Member Spotlight: Dinesh Natarajan

By John Freund | February 29, 2024

Trident Strategy is a Singapore-based strategic consultancy that Dinesh Natarajan founded and leads as CEO. Dinesh have over 9 years of experience in law, management consulting, and litigation, and helps clients across various sectors and geographies to achieve their goals in the strategic partnerships and sports, media and entertainment industries. Dinesh combines his skills and knowledge in strategy, legal finance, and arbitration to deliver value-added solutions and insights.

Dinesh is also a Network Member at Lexolent, the world's first globally coordinated network for legal finance professionals. Lexolent connects him with a diverse and dynamic community of experts, investors, and innovators in the rapidly growing field of legal finance. He leverages his expertise in sports law and arbitration to advise and support clients on complex and high-stakes legal matters.

Dinesh is passionate about foreign policy, international politics, and youth leadership, and engages in various platforms and initiatives that foster dialogue, collaboration, and social impact. Dinesh serves his community in various roles, such as sitting on the Management Committee of a Hindu temple, the Legal Committee of the Football Association of Singapore, and the Disciplinary & Ethics Committee of the ASEAN Football Federation. He live by the motto: Serve. Lead. Inspire.

Company Name and Description: Trident Strategy- a consultancy that provides services in the legal and Sports industry.

Company Website: www.trident-strategy.com

Year Founded: 2021

Headquarters: Singapore

Area of Focus: Law, strategy, finance, sports, media, entertainment

Member Quote: Keen to establish a Litigation Fund and interested to speak with players in the industry who could be a mentor and/or partner with.

Commercial Regulatory Issues

By John Freund | February 27, 2024

As criticism and scrutiny of litigation funding reaches new heights, opponents of the industry will be keeping a close eye on anything that appears to show funders operating in ways that can be framed negatively. A recent article highlights that it is not just funders who are under the spotlight. A newsletter published by Politico earlier this month reported that Miller Strategies, a D.C.-based lobbying firm, said it would update its lobbying disclosures around its work for the International Legal Finance Association (ILFA). These amendments were required, as it had failed to disclose that the following five members of ILFA are foreign companies: Harbour Litigation Funding, Innsworth Advisors Limited, Nivalion AG, Omni Bridgeway and Therium Capital Management. Speaking with Politico, Miller Strategies’ founder and CEO Jeff Miller said that the failure to disclose the foreign entities “was an oversight”, and that the lobbying firm would “amend accordingly.” Miller also added that his firm had paused its work for ILFA at the end of 2023, having been paid a fee of $50,000 per quarter. According to data collated by OpenSecrets, a nonprofit that tracks lobbying spending in U.S. politics, Miller Strategies was paid a total of $110,000 by ILFA in 2023. OpenSecrets tracking also reveals that ILFA paid another lobbying firm, West Front Strategies, $120,000 for its services last year.

Case Developments Commercial

By John Freund | February 27, 2024

As LFJ reported earlier this month, the story of Burford Capital and Sysco’s antitrust lawsuits experienced a new development, with a Minnesota judge denying their joint motions for substitution of plaintiff. As was expected at the time, both the litigation funder and its client have now filed objections and asked the Court to set aside the ruling and allow Burford’s subsidiary to take over the cases. Reporting by Reuters reveals that objections have been filed by both Carina Ventures, a subsidiary of Burford Capital, and Sysco, against U.S. Magistrate Judge John Docherty’s denial of their joint motion for a substitution of plaintiff. The objections, which were filed with the United States District Court of Minnesota on 23 February, both argue that the judge’s order is based on ‘errors of law’. Carina’s filing summarised both parties’ position succinctly, stating that ‘there is no sound policy reason to require Carina to control the prosecution of its claims from the sidelines, rather than litigating them directly in its own name.’ Carina’s objection is formed around two central arguments. Firstly, that Judge Docherty’s order ‘contravenes uniform Eighth Circuit and District Court precedent, as well as the core purposes of Rule 25(c).’ Secondly, that the judge’s ‘public policy reasons for denying substitution are legally erroneous’, with Carina arguing that ‘denial of substitution does not and cannot change Carina’s legal right under the assignment agreement to control the claims.’ Sysco’s objection followed similar arguments around the court’s order running ‘contrary to Rule 25’, whilst also providing three central pillars to its argument around Judge Docherty’s public policy reasoning. Sysco argued that the ‘the public policy favoring settlement also favours substitution’, that the ‘substitution promotes antitrust policy’, and that ‘the doctrine of champerty favors substitution of the claim owner’. Both Carina Ventures and Sysco concluded their objections by requesting that the Court grant substitution of plaintiff in the antitrust cases.

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Announcements Case Developments Commercial

Silver Bull Provides Update on Its Arbitration Claim Against Mexico

By John Freund | February 27, 2024

Silver Bull Resources, Inc. (“Silver Bull” or the “Company”) provides an update on progress with its international arbitration claim against the United Mexican States (“Mexico”). Since our previous update on September 26, 2023, a number of important steps have been achieved in the arbitration process. These include:

The appointment of a three-person arbitration panel (the “Tribunal”) by the International Centre for Settlement of Investment Disputes (“ICSID”). The Tribunal convened its first session with the parties on February 13, 2024.
Engagement of a quantum expert by the Company to assess the Company’s claim. The evaluation is underway and will serve as the foundation for determining the value of Silver Bull’s claim against Mexico.
Establishment of a definitive timeline agreed upon by both parties and the ICSID Tribunal. Silver Bull anticipates filing its Memorial in May 2024, with the Arbitration hearing slated for October 2025.
The Company and its legal representatives at Boies Schiller Flexner continue to prepare the case. Document analysis and interviews with pertinent personnel are progressing as scheduled.

For background on the basis for the arbitration and ongoing updates with respect to the arbitration, please refer to the Company’s website www.silverbullresources.com/news. Regarding the arbitration proceedings, Silver Bull is being represented by the global law firm, Boies Schiller Flexner, and is financially supported by Bench Walk Advisors via a Litigation Funding Agreement for up to US$9.5 million to finance the case.

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Announcements Commercial People Moves

RESPECTED LITIGATION FINANCIERS UNITE TO LAUNCH NEW VENTURE

By John Freund | February 27, 2024

An experienced and agile team today launched Winward Limited (“Winward”), a litigation finance platform focused on being a funder with a lawyer’s mindset. Winward (www.winward.uk ) will be run by Jeremy Marshall, its Chief Investment Officer and Managing Director, with committed capital from Rocade Capital. Winward will initially concentrate on funding commercial litigation within Europe and common law jurisdictions although it will also look to capitalise on opportunities that are presented from other jurisdictions that have a mature litigation funding environment. Winward intends to build a balanced portfolio of investments and will aim to work with a select group of law firms and professionals. The initial investment focus is a mixture of litigation and arbitration matters in the fields of antitrust, arbitration, contract, group action, insolvency and tort. Winward’s team is efficient, experienced and is determined to provide a robust service and come to swift and decisive funding decisions, while providing enhanced transparency throughout. Its advisory committee is chaired by Stephen Auld KC, a senior silk from leading chambers One Essex Court in London, and it is comprised of a number of seasoned professionals, all of whom have significant experience of either funding cases or having cases being funded. Wayne Attrill, Arndt Eversberg and Kees Jan Kuilwijk have decades of litigation funding knowledge of, respectively, the Australian, German and Dutch markets. From the UK, Philip Young and Sean Upson, who were senior partners at market-leading litigation practices (Cooke, Young & Keidan and Stewarts Law) will provide essential risk management and litigation skills from the perspective of practising lawyers. Winward is funded by Rocade Capital, a leading litigation finance company backed by one of the world’s leading investment managers. Winward will benefit from a market leading insurance facility provided by co-insurers Arcadian Risk Capital and Litica Ltd. Brian Roth, Chief Executive Officer and Chief Investment Officer of Rocade LLC, said “We are excited to be entering the market with the leadership of a litigation finance veteran in Jeremy Marshall. This launch is an opportunity for us to contribute to moving our industry forward, as Winward will offer market leading solutions with a streamlined process”. Shoosmiths LLP and Walkers advised Winward Limited. Nixon Peabody LLP served as legal advisor to Rocade LLC. Winward’s insurance broker is Howden Broking Group Limited.

Rocade Capital

Rocade LLC is a specialty finance company focused on litigation finance with a long-term investment approach, in partnership with one of the world’s leading investment managers. Since Rocade’s predecessor was founded in 2014, the platform has funded approximately $1.1 billion of investments in the litigation finance space, primarily consisting of loans to leading plaintiff law firms within mass tort and other complex litigation. Rocade Capital’s flexibility, industry expertise, track record and long-term focus position it to be a leader in law firm lending. Rocade has an experienced team of professionals, located in the Washington, DC area and Houston, TX, which includes both finance industry veterans as well as litigation experts. For more information, please visit www.rocadecapital.com .

Jeremy Marshall

Jeremy was formerly the Chief Investment Officer for Bentham Europe (now Innsworth Advisors), the joint venture between IMF Bentham Limited (now Omni Bridgeway) and subsidiary entities of funds managed by Elliott Management Corporation. He was also a Senior Investment Manager with Omni Bridgeway. He is an experienced litigation finance professional, having worked in litigation finance for well over a decade and, prior to that, having been a partner of a London law firm which litigated a number of funded cases. He has been involved in the funding of a wide variety of cases, including the securities case against Tesco PLC in England (which settled) and a similar case against Volkswagen AG (in Germany). He is a regular contributor and commentator in the litigation finance space.

Commercial Deals

By John Freund | February 26, 2024

As demand for third-party dispute funding increases, funders are keen to educate potential clients about their own processes for evaluating funding applications and what information they are looking for in these applications. An insights post from LCM’s Roger Milburn, investment manager – APAC, examines the importance of focusing on recoverability and enforceability, arguing that it is an area ‘which would benefit from further attention from those seeking funding and which is sometimes overlooked.’ He points out that, when it comes to submitting funding applications, these are the ‘frequently neglected pieces of the puzzle’ that are essential for any funder when assessing the viability of a case. Explaining the issue from a funder’s perspective, Milburn highlights that it is not enough to simply succeed in the legal action, as this alone ‘does not generally trigger obligations to reimburse the funder and make payment of the contractually agreed returns.’ For a funder to be certain that it can achieve a return on its investment, it is important that an applicant for funding has considered whether the target of the claim ‘has the means to satisfy an outcome of the magnitude contemplated’. If the opponent does not have the resources to meet those payment obligations, it is equally important to scrutinise whether ‘assets exist in jurisdictions where the judgment or award can be enforced.’ Milburn goes on to explore nuances around investor cases brought against nation states or state-controlled entities, noting that whilst it is commonly assumed these states will always have assets to satisfy an award, ‘the question for a funder is whether and how such assets may be seized.’ As a result, prospective clients should aim to provide information around the target state’s history of paying arbitral awards, or what enforcement mechanisms are available for that given jurisdiction. Milburn’s full post, which also provides insights on specific conventions and treaty instruments that manage arbitral award enforcement, can be read here.

Commercial

By John Freund | February 26, 2024

The Risk & Insurance 2024 Power Broker winners have been announced, with Stephen Kyriacou, managing director and senior lawyer at Aon, recognized as a ‘Speciality Power Broker’. The post highlights Kyriacou’s work in the litigation and contingent risk insurance market, and his increasing focus on portfolio-based policies over single-case insurance cover. As part of this recognition, Risk & Insurance spoke with Kyriacou’s clients, who offered significant praise for his work delivering innovative and bespoke solutions to mitigation litigation risk. One client, a risk manager for a private equity firm, said that the solution crafted byf Kyriacou and his team had “generated meaningful value creation for our portfolio company.” The client went on to praise Kyriacou’s depth of expertise, stating: “His knowledge of the industry market is very strong, and we would not have achieved the result that we did without his involvement and leadership.” In a post on LinkedIn celebrating the announcement, Kyriacou took the chance to give thanks to both his clients and his colleagues at Aon, describing the company’s litigation risk group as ‘the best team in the business.’ The full list of Risk & Insurance 2024 Power Broker winners can be read here.

Case Developments Commercial

By John Freund | February 26, 2024

The energy sector is often pinpointed by funders as one of the top targets for investments in litigation and arbitration proceedings, with mechanisms like the Energy Charter Treaty (ECT) creating high value claims that require outside financing. One such claim being brought by an oil and gas company appears to be moving forward, with the claimant still in search of third-party funding. Reporting from Alliance News, shared by Morningstar, provides an update on Lansdowne Oil & Gas efforts to bring a claim against the Irish government. The company announced that it has appointed Mantle Law to lead the legal proceedings, saying that the law firm has “the best dispute and arbitration lawyers in the construction, infrastructure and energy sectors.” The claim is focused on allegations that the Irish government failed to act in a fair and reasonable manner under the ECT when it withdrew an exploration license for the Barryroe prospect. Lansdowne had already invested $20 million in the project. Whilst the focus of the announcement is that Lansdowne has appointed lawyers for the case, it also included the detail that the oil and gas company is still ‘in the process of contacting litigation funders to finance the ECT claim and subsequent arbitration process.’ This is particularly interesting given LFJ’s reporting from July last year that Lansdowne was already in talks with litigation funders to obtain financing for the proceedings. This would suggest that Lansdowne appears to still be in the same position, with regards to securing funding, as it was over seven months ago. As part of the announcement, Lansdowne explained its reasoning for moving forward with the claim, stating: "Given the lack of engagement or any ability to have a respectful and frank conversation with the Irish Government, the company believes it now has no alternative other than to pursue vigorously its ECT claim."

Case Developments Commercial

By John Freund | February 22, 2024

At the core of any litigation funding arrangement is the principle that if the funded party reaches a successful outcome, then the funder will receive a return on their investment out of whatever monetary award is given to the plaintiff. However, a recent judgement in Australia offered an interesting insight into a case where the plaintiff had attempted to argue that it was the defendant who should cover the costs of the funder’s commission. Reporting by the Australian Associated Press, and published by Yahoo News, highlights a recent judgement handed down in the Supreme Court of New South Wales, which found that a litigation funder’s commission was not ‘recoverable as damages payable to the plaintiffs.’ Justice Richard Cavanagh’s ruling in the case of Hunt Leather Pty Ltd v Transport for NSW found that there was no precedent for the court to make such a ruling, stating clearly that there has been no prior case ‘in which the funder’s commission has been allowed as a component of the damages awarded.’ The background to this latest ruling from the NSW Supreme Court is a case that saw local businesses sue Transport for NSW over its construction of the Sydney light rail project, in which they argued that they had suffered losses due to extended disruptions to the area in which the businesses are based. Last year, a court found that Transport for NSW was liable for damages, with Hunt Leather and Kensington restaurants and coffee cart being awarded $3,693,164 and $317,773 respectively. Following the award of damages, the plaintiffs argued that ‘they have suffered loss as a result of the tortious conduct of the defendant and that they are entitled to be put back into the position they would have been but for that tortious conduct.’ The plaintiffs argued that this should include the 40% funder’s commission, which the parties had agreed to when they entered into a funding agreement with International Litigation Partners (ILP). In his judgement, Justice Cavanagh reasoned that the plaintiffs had reduced the amount of profit they would see from the award, as a result of ‘the plaintiffs’ own conduct or decision to pursue the litigation on a risk free basis.’ Therefore, their claim that the defendant should cover the costs of the funder’s commission did not follow, as the plaintiffs ‘have not otherwise reduced their loss of profits flowing from the defendant’s conduct.’ Justice Cavanagh explained that if he had agreed with the plaintiffs’ reasoning, then the effect would be ‘to visit upon the defendant not just the consequences of its own conduct but the consequences of a decision taken by the plaintiffs, freely and willingly, to share the proceeds of the litigation in return for a benefit to them.’ Justice Cavanagh’s full judgement can be read here.

Commercial

By John Freund | February 22, 2024

The growth of the global litigation finance industry and the success stories from market leaders continues to generate an equally prominent strain of harsh criticism. However, it is always useful to look past the bold statements and fierce condemnations to analyse whether the most frequently voiced critiques are based in reality. An article from UK law firm Shepherd and Wedderburn reviews some of the most common criticisms of third-party litigation funding, examining whether these arguments have real substance and whether critics of the industry are right to claim, ‘that litigation funding is a malign influence on litigation in this country, rather than an aid to access justice.’ The first criticism that the article addresses is the idea that litigation funding promotes meritless claims, with funders portrayed as a driving force behind frivolous lawsuits in pursuit of financial gain. The authors argue that the structure of the UK legal system provides serious disincentives to filing meritless claims, with the principles of ‘costs shifting and punitive damages’ making it a costly endeavour to back lawsuits that have little chance of success. The article acknowledges that whilst weak claims do still exist, funders have little reason to back them and cites the case of Excalibur Ventures v Texas Keystone, where the ‘funders were required to contribute over £20 million towards the defendants’ costs.’ The second argument against litigation funding that is analysed is the claim that ‘funders wrongfully gain control of the claim and that as such, the integrity of the proceedings will be threatened.’ The authors point out that although funders ‘hold the purse strings of litigation’, not only do they not have control over the litigation proceedings, it would also not even be in their interest to exert this level of control. They highlight that ‘control requires monitoring, and monitoring requires personnel’, meaning that there is little reason for funders to want to take on the burden of additional manpower and expenditure to do this, especially when the business model is based on generating solid returns on investments. Finally, the article deals with the critique that funders are profiteering off legitimate attempts to seek justice, pointing out that the scale of the funder’s return in the Post Office litigation caused many outside observers to question why the victims’ share of the award was so reduced. In response, the authors argue that ‘these figures must not be interpreted in isolation’ and must be considered in the context of the myriad of costs that funders cover during the duration of the case. Shepherd and Wedderburn’s article concludes by arguing that despite these common criticisms, ‘litigation funding can enable voices to be heard, articulated, and judged in a way that results in a monetary pay-out for their losses, but also vindication.’

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Announcements Commercial Legal Innovation

KWS Litigation Shapes The Future with Low-Risk Investments and Substantial Returns

By John Freund | February 22, 2024

KWS Litigation, a pioneering, British litigation funding investment company, is revolutionising the legal and investment landscape by offering a unique opportunity where justice aligns with intelligent portfolio diversification. Creating a realm where justice and investments intertwine, KWS Litigation champions the cause of consumers who have fallen victim to mis-sold loan agreements and business energy claims through deceptive and fraudulent sales practices. Their disruptive approach, rooted in fundamental legal principles upheld by the High Court, introduces innovative solutions that break new ground. Inviting individual investors to finance legal cases in exchange for a share of the proceeds and substantial pro-rata returns, investor capital with KWS Litigation is not only low-risk but also shielded by an FCA-regulated broker insurance bond. This opportunity isn't just smart; it generates a positive social impact, shaping a future where justice prevails and investments flourish. Following a recent landmark judicial review, KWS Law Limited transformed into a Special Purpose Vehicle (SPV) to facilitate the High Court verdict for mis-sold consumers. Out of this restructuring, KWS Litigation emerged as a trading style of KWS Law—an Alternative Business Structure, providing more choices, innovation and transparency. Regulated by the Solicitors Regulation Authority (SRA: 830165), KWS Litigation operates as an agile and client-centric law firm with a laser focus on identifying legitimate litigation claims. Headed by Neil Berkeley, his team of seasoned legal professionals ensures success in various fields of litigation while prioritising investor risk management. “Our commitment is unwavering—to bridge the gap between individuals and powerful entities, championing a legal system where justice is accessible to all.” — Neil Davis-Berkeley, Managing Director at KWS Law KWS Litigation's mission is to equalise the legal landscape by offering financial support and legal expertise to claimants. By rectifying the imbalance between individuals and large corporations in the courtroom, they empower individual investors to achieve outstanding returns, disrupting the dominance of major funders supporting large enterprises. In the UK consumer litigation investment market, characterised by dynamic growth and evolving regulations, KWS Litigation strategically positions itself as a formidable player. Their specialised expertise, robust track record and meticulous approach make them well-suited to attract a diverse array of litigation funders and professional investors. Furthermore, KWS Litigation recently announced a new equity partnership with a leading claims management firm. Facilitating case acquisition, Addlington-West Group seamlessly pairs its clients—everyday people with meritorious cases—for KWS Litigation. The consumer litigation investment sector has experienced significant growth, driven by increased compensation pursuits. Moreover, research conducted by law firm Reynolds Porter Chamberlain LLP reveals the top 15 UK litigation funders reported record assets of £2.2 billion on their balance sheets in 2020/21, signifying an 11% increase from the preceding year. KWS Litigation specialises in distinct categories of consumer litigation cases, including financial services mis-selling. Their rigorous risk assessment and due diligence processes, compliant with litigation and consumer protection regulations, attract investors of all scales, including individual and institutional investors seeking low-risk alternatives with exceptional returns. The innovative investment model offered by KWS Litigation provides low-risk opportunities with no direct correlation to conventional financial markets. Rigorous selection processes, compliance with regulatory requirements and unique features such as FCA-regulated broker insurance bonds, set a precedent, ensuring a higher potential for returns compared to other asset classes.

Case Developments Commercial

By John Freund | February 22, 2024

The Post Office scandal has dominated the headlines in UK media over recent months, highlighting the vast scale of the injustice suffered by the sub-postmasters, and the role that third-party funding played in allowing these victims to seek justice. In another positive step for the victims, the government has now announced plans for a new law that would accelerate the process for overturning many of the sub-postmasters’ convictions. An article by BBC News covers the UK government’s announcement of new legislation that will overturn convictions for the sub-postmasters who were victims of the Horizon Post Office scandal. The new law intends to clear the convictions for the majority of the over 900 sub-postmasters who were wrongfully convicted for false accounting and theft, with the legislation expected to come into effect by the end of July. The legislation sets out specific criteria for the types of convictions that would be overturned, with the law covering those convictions made by the Post Office and Crown Prosecution Service (CPS) in England and Wales. However, those convictions from the Department for Work and Pensions (DWP) are not covered by the bill, nor are any convictions that resulted from cases in Scotland and Northern Ireland. The government stated its intention to work with local governments in those regions to ensure that their own plans for quashing convictions are “compatible with the UK compensation scheme.” As part of the announcement of the planned legislation, Post Office Minister Kevin Hollindrake stated that "the scale and circumstances of this prosecutorial misconduct demands an exceptional response.” Hollindrake acknowledged that whilst the new law may “exonerate a number of people who were, in fact, guilty of a crime”, the UK government considers this “a price worth paying in order to ensure that many innocent people are exonerated.”

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QANLEX hires lawyers Marina Gouveia and Alejandro Arias as Investment Managers

By John Freund | February 22, 2024

QANLEX, a litigation finance technology fund, founded in Argentina and currently operating in Europe and Latin America, recently incorporated two lawyers as Investment Managers to its international team, Marina Gouveia and Alejandro Arias. Marina Gouveia is a lawyer licensed in both Brazil and Portugal, graduated from Universidade Presbiteriana Mackenzie, with a Master's Degree in Mediation, Negotiation and Alternative Dispute Resolution from Universidad Carlos III de Madrid. She is a mediator for the Centro Brasileiro de Mediação e Arbitragem and the Centro de Arbitragem e Mediação. In addition, she has participated as a volunteer in numerous international arbitration, mediation, and negotiation competitions, acting regularly as a judge and arbitrator. Gouveia joins the office from Paris, France. Alejandro Arias has a law degree from Universidad Panamericana and a Master's degree in International and Comparative Dispute Resolution from Queen Mary University of London. Prior to joining QANLEX, he worked as an international lawyer at firms such as Dechert and Hogan Lovells. He joins the office from Mexico City. With these two additions in key continental law markets for the firm, such as Mexico and France, QANLEX seeks to strengthen its international presence and expand its operational capacity. In addition, Gouveia's experience and training in both Brazil and Portugal will support the development of these markets. Yago Zavalia Gahan, co-founder of the firm, highlights these signings as very significant for the firm: "The addition of these two legal professionals marks a significant milestone in our commitment to strengthen our international team. We are confident that they will help us successfully navigate legal challenges as we continue to grow and expand into new markets. Their passion for innovation and excellence aligns perfectly with our mission and values." Fernando Folgueiro, co-founder of QANLEX, emphasizes: "The arrival of Marina and Alejandro at QANLEX brings a fresh perspective that is vital to our strategy. Their commitment to our project reinforces our presence in two key countries such as Mexico and France, in addition to supporting the Portuguese-speaking market, taking into account Marina's experience in Brazil and Portugal". About QANLEX QANLEX is the first litigation finance technology fund operating in Europe and Latin America, created by an interdisciplinary team of lawyers and engineers with a holistic view of law, finance and technology. Its mission is to provide capital to pursue meritorious lawsuits with an exclusive focus on continental law countries.

Commercial Legal Innovation

By John Freund | February 21, 2024

As in-house counsel and corporate legal departments grow more comfortable with the prospect of utilizing third-party funding, litigation funders are keen to provide education about best practices for securing funding. In a blog post from Omni Bridgeway, Matt Leland and Carrie B. Freed examine the use of in-house data analytics for companies who are looking to secure third-party funding for their litigation strategy. As the authors explain, for in-house counsel who are seeking litigation funding ‘it is imperative to assess the economics of a case with clear eyes’, and this can be best achieved ‘partnering with their business analytics colleagues.’ By collaborating with their data analytics team, Leland and Freed argued that corporate legal teams can create ‘several efficiencies when preparing the litigation funding proposal.’ The five efficiencies that can be achieved are as follows:

Pressure-test damages evidence
Avoid discovery emergencies
Familiarize personnel with the litigation
Foster collaboration with colleagues
Generate reliable budget forecasting

Leland and Freed highlight that as ‘businesses accumulate copious amounts of data’, they already have a wealth of information that can be used to produce accurate quantitative analyses of potential losses and also build predictive models for likely outcomes. Whilst this use of data analytics will not be able to provide foolproof assessments, ‘the company can better demonstrate to a litigation funder where the recovery risks lie and what resources might be necessary to strengthen the business’s litigation position.’

Commercial Legal Innovation

By John Freund | February 21, 2024

The Post Office scandal has brought the role of litigation funding in opening access to justice to the fore, with the media coverage generating fresh opportunities for funders to talk about their vital role in supporting victims of a miscarriage of justice. However, it is equally important to recognise the role that litigation insurance played in supporting the sub-postmasters legal campaign. In an article for Insurance Post, Alan Pratten, chair of M&A, litigation and tax insurance solutions at Gallagher, provides new insights into the use of after-the event (ATE) insurance in the postmasters litigation. Pratten goes into the nuances and challenges that were overcome as an insurance broker, working in tandem the postmasters legal team which was led by James Hartley, partner at Freeths. Pratten explains that the claimants’ legal teams had struggled to secure ATE initially, with one of the primary issues being that ‘many of the claimants, owing to the findings of the Horizon software, had criminal records, having been convicted of fraud, theft and false accounting.’ Insurers were therefore naturally averse to involving themselves with a case involving fraud, which was compounded by the fact that ‘the majority of existing ATE policies would have been nullified due to some claimants having previous convictions.’ Pratten goes on to detail how Gallagher worked with a panel of UK and US insurers to craft sufficient ATE insurance cover for the sub-postmasters, which involved ‘working with a panel of insurers and reinsurers and tailoring the policy wording in 85 different areas.’ He describes the case as setting ‘a new precedent for ATE in the industry’, and emphasised that the bespoke nature of this policy shows ‘that standardised policies are rarely the best fit and that clients need an insurance broker that understands, and can cater to, their unique circumstances.’

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Announcements Commercial

Omni Bridgeway Releases Market Update

By John Freund | February 21, 2024

Omni Bridgeway Limited (Omni Bridgeway, OBL) (ASX:OBL) announces an update on income and income yet to be recognised (IYTBR) from matter completions as well as provisional impairments of certain investments. Positive developments[1]

Following the 31 December 2023 period end, approximately A$48.9 million investment income has been generated, with A$18.4 million provisionally attributable to OBL (excluding performance fees on these completions):

Completion of three investments generating approximately A$28.1 million of income recognised (MOIC of 2.02x; IRR of 125%).
In principle settlement of three investments resulting in approximately A$20.8 million IYTBR.

This is incremental to the 2Q24 Investment Portfolio Report disclosures of A$187 million investment income generated in 1H24 from A$147.9 million income recognised and A$39.1 million IYTBR, with A$32.0 million provisionally attributable to OBL (excluding performance fees on these completions).
The A$289.7 million cash and receivables balance at 31 December 2023 does not include any cash proceeds from the additional matters stated above.

Negative developments

Case developments during the financial year to date (FYTD24) in OBL’s investments in associates have resulted in a A$14.9 million reduction of the carrying value of the OBL residual share. This mainly relates to a positive judgment for a Fund 1 investment, but at a significantly lower than expected amount. The judgment is subject to various appeal proceedings.
Case developments during FYTD24 in litigation investments classified as intangible assets have resulted in a A$33.2 million (A$12.9 million attributable to OBL) reduction of the carrying value. This mainly relates to adverse milestones associated with a funded law firm portfolio for which returns are cross collateralised. While OBL’s investment in this portfolio has achieved a positive return on invested capital overall, the remaining carrying amount is considered impaired under OBL’s accounting policies. Appeals are being pursued and may result in a reversal of the full impairment due to the cross collateralisation.
Case developments during FYTD24 in litigation investments classified as purchased claims have resulted in a A$6.3million (A$1.1million attributable to OBL) reduction of the carrying value. This mainly relates to two litigation investments for which the anticipated income is lower than expected or the anticipated duration has extended.
The above reductions in the carrying value of the investments are non-cash items.

The amounts stated above are subject to completion of the audit process and will be confirmed in the 1H24 Group Consolidated Financial Statements which will be released on 29 February 2024.

Fund 5 is not consolidated within the Group Consolidated Financial Statements, but the aggregate income figures in this section include 100% of any Fund 5 income recognised/IYTBR.

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Consumer

Let’s Set The Record Straight: Consumer Legal Funding is Not Litigation Finance

By John Freund | February 20, 2024

The following piece was contributed by Eric Schuller, President of the Alliance for Responsible Consumer Legal Funding (ARC). Consumer Legal Funding, in its various forms, is pretty mundane. It covers living expenses, such as rent, food, clothes and keeping the lights on. It might even enable a family to provide Christmas or birthday gifts for their children. In every case, its sole purpose is to help individuals and families alleviate the cash-flow problems that arise in the wake of an accident or other tragic circumstances, while the individuals and families are seeking compensation for their situation. It has nothing to do with financing of the litigation. What is happing is that groups and individuals who are not taking the time and effort to know the differences between the two different products and are lumping them together. They are saying all transactions where a party to litigation receives any monetary resources from a non-party are considered Third Party-Litigation- Financing (TPLF). It paints a bleak picture of “foreign adversaries . . . undermining U.S. national economic and security interests through the infiltration of the American litigation system,” and it is the end of the free world as we know it. Consumer Legal Funding is nothing like that, it helps a consumer meet their financial obligations while their legal claim is making its way through the justice system. It does not pay for deposition cost. It does not pay for legal fees or expenses. Most of the time the funds go to help a consumer who has had a car accident bridge the financial gap, but there are other times where it goes to help a person who was wrongfully convicted and spent nearly two decades of their life in prison for a crime they did not commit. Consumer legal funding helped them get their life back in assisting with living expenses while they got the justice they so justly deserved. It helped a Police Officer pay to keep a roof over their family’s head while they had their day in court after being wrongfully discharged. Then the case of a single mother of three who was going back to college to make a better life for her children and had to move out of their home because of a toxic mold infestation. She used consumer legal funding to pay for a mobile home so she and her three children could live in a safe, toxic-free, environment while the situation was fixed. There is the case when a 16-year-old was made a quadriplegic due to medical negligence. The family had to modify their home to make accommodations to care for their loved one. Consumer legal funding was the only way they were able to take care of their teenager while the case made its way through the long legal system. Another was a woman was involved in a car accident and her teeth were shattered because of the accident. She used consumer legal funding to get a new set of teeth. She said, “it gave me my smile back”. Finally, there have been times where consumer legal funding was used to help pay for funeral expenses of a loved one that was tragically killed in an accident. Sadly, some families had no other means of taking their loved one to their final resting place if it had not been for consumer legal funding. But what is happening are those groups and individuals that do not take the time, or want to take the time, to learn what consumer legal funding really is. They hear terms like, “corrupting the legal system”, “leads to filing frivolous litigation” and the latest is “foreign governments are leading to international sabotage of our courts”. Then charge ahead saying “the sky is falling; the sky is falling”.

How does giving money to a single mother so she can have her children live in a toxic free environment lead to “international sabotage”?
How does allowing a person who spent nearly 2 decades of their life living in 48 square foot space corrupting the legal system?
How does allowing a person to get their smile back lead to frivolous litigation?

Litigation Financing is just that “financing of the litigation”. It is used to pay for lawyers. It is used to pay for depositions. It is used to pay for expert witnesses. It is used to pay court costs. None of which consumer legal funding does. In fact, in the legislation that we have promoted we specifically state the funds we provide to a consumer cannot be used for those purposes. Don’t be fooled by someone who is throwing out buzz words that make one think we are on the brink of judicial destruction by confusing Consumer Legal Funding with Litigation Financing. They both may be fruit. But one is an apple and one is an orange. Eric Schuller President Alliance for Responsible Consumer Legal Funding http://arclegalfunding.org/

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Announcements Commercial Deals

Westbrooke Associates Unveils a Highly Sought-After Investment With Capital Protection

By John Freund | February 20, 2024

Westbrooke Associates, the official agent for prominent and proven track record investments, is thrilled to announce its latest portfolio prospect. Providing a broad spectrum of options for those seeking attractive returns, Westbrooke Associates is inviting professional investors to invest in an opportunity that offers generous pro-rata returns with capital protection. Showcasing a groundbreaking investment realm in a venture that goes beyond the ordinary, Westbrooke Associates is working in conjunction with KWS Litigation (a trading style of KWS Law) presenting an extraordinary opportunity in British litigation funding. Litigation funding, also known as legal financing or third-party funding, allows investors to support legal cases without the financial burden for claimants. Enabling litigation to pave the way for justice, this opportunity opens up an intelligent avenue for diversifying investment portfolios, providing a powerful tool to level the playing field. Recent market research highlights how the global litigation funding investment market has demonstrated substantial growth potential, valuing the market at approximately $12.2 billion in 2021 and anticipating it to surge to an impressive $25.8 billion by 2030. Following a landmark judicial review, KWS Litigation offers access to both justice and financial growth by inviting individual investors to finance mis-selling loan agreement legal cases and business energy contracts. Meeting the demands of a disruptive and evolving industry, KWS Litigation--a trading style of KWS Law Limited, operates as an Alternative Business Structure, providing choice, innovation and transparency. Regulated by the Solicitors Regulation Authority (SRA: 830165), KWS Litigation is a client-centric law firm focused on identifying legitimate litigation claims. Their mission is to rectify courtroom disparities between individuals and large corporations. The stringent claimant selection process is also a testament to the firm's commitment to excellence. In a symbiotic relationship that benefits mutual clients, the Claims Management firm, Addlington-West Group, authorised and regulated by the Financial Conduct Authority (FRN:838665), collaborates with KWS Litigation as an Introducer of Clients. Leveraging this partnership, Addlington-West Group has access to a pool of legitimate and meritorious prospects actively seeking funding and assistance in pursuing claims of financial mis-selling. Coupled with legal opinions from independent barristers confirming the highest likelihood of a successful outcome, each investment benefits from legal expertise, case due diligence and streamlined process management. Holding the promise of significantly larger returns compared to traditional alternative asset classes and in stark contrast to the extended timelines associated with typical private equity deals, this opportunity presents a return in approximately 12 months. Moreover, this unique and potent avenue stands independently from conventional financial markets, market fluctuations and volatility. Safeguarding the investor journey at every turn, upon completion of each successful case, the investor receives the principal amount and exceptionally high pro-rata returns. Even in the unlikely event of an unsuccessful case, the principal amount is secured via an insurance bond, offering unparalleled protection. Additionally, investor flexibility means the option to reinvest at any stage, providing each investor with the autonomy to navigate their investment with confidence. Throughout the process, KWS Litigation meticulously adheres to litigation and consumer protection regulatory requirements, ensuring compliance and transparency at every step. Discussing the new opportunity, Company Director for Addlington-West Group Magaret Bladon says: “I envision a future marked by even greater success and positive transformations. Our commitment to excellence, coupled with our unwavering dedication to client satisfaction, positions us as industry pioneers. I predict a future where our innovative approaches and client-centric strategies will continue to redefine the landscape. Together, we are poised for a journey of unparalleled success, achieving new milestones and setting industry standards for years to come.” Neil Davis-Berkeley, Managing Director for KWS Law says: “We believe in providing individuals with a voice, especially those who have been marginalised or faced injustices. Litigation funding ensures everyone, regardless of financial means, has access to justice and aligns with our goals for fairness, transparency and the right to seek restitution. Our commitment is unwavering – to bridge the gap between individuals and powerful entities, championing a legal system where justice is accessible to all." Westbrooke Associates facilitates strategic sector engagement, allowing investors to align their interests with industries they are passionate about, from promoting sustainability and social impact to embracing technological innovations. As seasoned and strategic players, this opportunity boasts a robust track record, specialised expertise and a meticulous approach, positioning it as a formidable choice for qualifying investors. If you want to seize the opportunity to be part of a venture that not only stands at the forefront of legal innovation but also promises exceptional returns, contact Westbrooke Associates to request the Investor Memorandum. Alternatively, you can visit www.westbrookeassociates.com to learn more, email info@westbrookeassociates.com or telephone 0203 745 0294.

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Announcements Commercial Deals

New Research Shows Businesses Increasingly Open to Reframing Legal Department from Overhead to Capital Source

By John Freund | February 20, 2024

Burford Capital, the leading global finance and asset management firm focused on law, today releases new independent research demonstrating that an increasing number of businesses are recognizing litigation portfolios as value sources and are becoming more open to tools that help them reframe the legal department from overhead to capital source.

In the nearly 15 years since Burford’s inception and in the wake of the last great recession, how businesses view their litigation and arbitration portfolios has drastically changed. Pressures on cost management have been persistent through turbulent economic times, Covid, supply chain constraints, geopolitical tensions and slow economic growth in major economies. To better understand how in-house lawyers and finance professionals expect these dual issues of cost management and value generation to evolve in the years ahead, Burford commissioned independent research with 400 GCs, heads of litigation, senior in-house lawyers, CFOs and other leaders responsible for litigation decision-making in their companies.

Highlights from the research include:

Businesses' already significant investment in litigation is growing: 43% of GCs say litigation spend will grow at least 25% in the next five years.

GCs and CFOs are aligned in seeking innovation for the legal department: More than half of businesses (55%) either have an affirmative recovery program (18%) or intend to build one (37%)—making it all the more important that best practices are in place to manage costs and optimize outcomes.
GCs and CFOs agree that collaboration is needed but differ on its extent: 70% of GCs and CFOs say it is important that the legal department find new ways to recover value—signaling a shared desire to reframe the legal department as a capital source. However, three times as many in-house lawyers as finance professionals say the decision to pursue potential claims is generally left to legal with little input from finance.

Legal finance is a key tool and finance has an important role in leveraging it: Almost three quarters (73%) of all respondents say their organizations have used legal finance (39%) or would consider doing so (34%), and more than two thirds (67%) of finance professionals feel that legal can increase its value to the business by using tools like legal finance.

Christopher Bogart, Chief Executive Officer of Burford Capital said: “The trend of ‘corporate finance for law’ is growing, as confirmed by this research and our own business, given that more than 50% of our commitments are now with corporates. That’s due to the impact legal finance can have on reducing the impact of litigation on the P&L and business leaders’ desire to use their capital to maximize shareholder value, not pay lawyers. This marks our 15^th year in business – and while the legal field is generally slow to change, this research reinforces that CFOs and GCs are thinking about their legal departments differently, and Burford is laser-focused on helping companies reframe the legal department more as capital source than overhead.”

The Litigation Economics: CFOs and GCs weigh in on best practices in optimizing legal department value survey can be downloaded on Burford’s website. The research was conducted by GLG from December 2023 – January 2024.

About Burford Capital

Burford Capital is the leading global finance and asset management firm focused on law. Its businesses include litigation finance and risk management, asset recovery and a wide range of legal finance and advisory activities. Burford is publicly traded on the New York Stock Exchange (NYSE: BUR) and the London Stock Exchange (LSE: BUR), and it works with companies and law firms around the world from its offices in New York, London, Chicago, Washington, DC, Singapore, Dubai, Sydney and Hong Kong.

For more information, please visit www.burfordcapital.com.

Commercial Regulatory Issues

By John Freund | February 19, 2024

When the European litigation funding market is discussed, it is perhaps unsurprising that these conversations are largely focused on third-party funding opportunities within member states of the European Union. However, outside of the EU, there is potential for Switzerland to become one of the continent’s most interesting jurisdictions for the adoption of third-party funding services. A blog post from Swiss Legal Finance (SLF) provides an overview of third-party litigation funding in Switzerland, examining the potential for the local market to grow, and outlining the best use cases for litigation finance in the country. The article begins by noting that whilst litigation funding has existed in Switzerland for the last 20 years, we have not seen widespread adoption of third-party funding services with ‘only a handful of funders currently active’. However, SLF point out that this may be change in the near future, ‘in part because local asset managers are becoming increasingly interested in litigation funding as an investment vehicle.’ The current state of litigation finance in Switzerland is a market that is unregulated yet recognised by Swiss law, with the Federal Court going as far as stating that there is a ‘ethical obligation for lawyers to inform their clients of the existence of TPLF.’ The post also explains that the Swiss legal model avoids some concerns around third-party funding that arise in other jurisdictions, noting that a funder’s presence has ‘no impact on lawyer-client privilege.’ This is because the Swiss system allows for legal documents to be shared with third parties without any requirement to disclose those documents to the defendant. As for the types of Swiss proceedings that litigation funding could be best suited for, SLF suggest that beyond domestic litigation, ‘domestic and international arbitration proceedings are also an attraction, because they often offer a substantial potential payout and take less time than litigation proceedings.’ SLF acknowledge that as class actions do not currently have a strong foothold in the country, there is little room for funded opportunities in this area. However, they also suggest that there is still a wide array of potential use cases, including divorce and inheritance cases, or even defendant funding.

Commercial Regulatory Issues

By John Freund | February 19, 2024

Whilst the Supreme Court’s PACCAR ruling has been viewed as a low point for the UK litigation finance industry, the subpostmasters scandal appears to have drawn public attention to the importance of third-party funding. In another example of a prominent public figure calling for action to reverse the effects of PACCAR, the UK’s former Chancellor has called for action to ‘ensure full access to litigation funding.’ In an op-ed published by City A.M., Nadim Zahawi, MP for Stratford-on-Avon and former Chancellor of the Exchequer, argues that the Post Office scandal has demonstrated the crucial role that litigation funding plays in supporting ‘unfairly maligned groups’ like the subpostmasters. As many industry commentators have previously noted, Zahawi suggests that the elevation of this scandal into the public spotlight ‘has given the government the vital push it needed to speed up the process to ensure they receive justice.’ Describing the Supreme Court’s PACCAR ruling in damning terms, Zahawi says that without corrective government action, the decision ‘could have catastrophic and far-reaching consequences for access to litigation funding.’ Whilst he praises the government’s efforts to speed up the provision of compensation to the Post Office victims, Zahawi emphasises that this corrective action ‘must include ensuring that the next Mr Bates can obtain justice before parliamentary time runs out.’

Commercial Regulatory Issues

By John Freund | February 16, 2024

As the third-party funding of litigation is still prohibited in Ireland, there are few opportunities to examine issues around funding arrangements in this jurisdiction. However, a new piece of analysis looks at a court decision which ruled on allegations that a claimant’s engagement with its lawyers amounted to a third-party funding agreement. A blog post by Lisa Carty and Sarah Twohig from Pinsent Masons examines a judgement handed down by Mr. Justice Michael Quinn in the High Court of Ireland, which dealt with allegations that fee arrangements between a plaintiff and their lawyer ‘amounted to a champertous contingency fee agreement.’ These allegations arose in a dispute between the Collector General of the Revenue Commissioners (Revenue) and two landlords, over unpaid taxes on rental income. The defendants, Paul Howard and Una McClean, argued that Revenue’s agreement with its lawyers should be classified as a third-party funding agreement due to a clause that stipulated ‘the lawyers would only be paid if legal costs due to Revenue were recovered from a relevant taxpayer.’ Howard and McClean argued that if a costs order were made in the case, then the lawyers would be effectively paid a share of both the tax debt and the legal costs. However, Mr. Justice Quinn ruled that ‘the proceeds of the litigation process were the unpaid taxes, surcharges, and interest, not the costs.’ Therefore, the agreement did not violate Ireland’s prohibitions on champerty, as the clause at issue ‘did not allow a bonus or improper profit, because the lawyers had a right to their costs.’ Carty, a partner at Pinsent Masons, emphasised that the High Court’s decision “should act as a reminder to firms that any innovative funding arrangements may ultimately be scrutinised by a court to determine whether they constitute illegal third-party litigation funding.” Twohig, a senior associate at the firm, added that until there is any reform of Ireland’s existing limitations on third-party litigation funding, “it is important that firms are mindful that their engagement terms cannot be interpreted as allowing profit from the proceeds of any litigation, other than the costs fairly due.”

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Announcements Case Developments Commercial

Rest Super Members Prepare for Class Action Over Alleged Breach of Trustee Duties

By John Freund | February 16, 2024

Shine Lawyers has filed a class action on behalf of members of the Rest Superannuation fund who may have had income protection insurance premiums wrongfully deducted from their superannuation accounts.   “This class action alleges that between December 2008 and June 2019, Rest Superannuation (Rest) signed up new members to income protection insurance by default, without the member actively choosing to sign up to the policy,” said Shine Lawyers’ Practice Leader, Hadi Boustani.   “We also claim that when members did not make any contribution to their Rest account for 13 continuous months or more, the default income protection insurance policy did not provide the member with any coverage and when members held multiple income protection insurance policies at the same time, the Rest income protection policy provided little to no coverage.”   “This was money down the drain for fund members who paid a premium for no benefit. As a result, we’re seeking compensation for insurance premiums which we allege were unfairly deducted, as well as investment returns and administration costs,”   “Up to 500,000 Rest members may be affected,” said Boustani. Shine Lawyers client, Jarrod Lane, has registered for the class action to demand accountability from his super fund. He was not earning an income for over 3 years between 2018-2021 and believes he was charged for income protection insurance that he could never claim on. “I felt it was important to join this class action because what Rest has done is wrong and they should compensate those who were affected.” The action is being funded by Woodsford, a leading global ESG, access to justice and litigation finance business. Clare Owen, Director and Head of Origination, Woodsford Australia, commented: “Everyday Australians trust their superannuation funds to look after their hard-earned dollars which they have invested for their retirement. Having sufficient superannuation to fund retirement is so important. Woodsford is pleased to be supporting this action to assist those everyday Australians in recouping losses to their superannuation which has been unfairly eroded.” To be a part of this class action, you must have:  

Been a Rest Super fund member for any time between 5 December 2008 and 30 June 2019; and  
By default, signed up to a Rest Superannuation account which included an income protection insurance policy; and  
Had income protection insurance premiums deducted from your Rest Super account; and 
Either: 
- Made no contribution to your Rest Superannuation account for 13 continuous months or more but continued to receive deductions from your account to cover income protection insurance premiums to Rest during that period; and/or 
- Paid for multiple default income protection policies alongside your Rest income protection insurance policy.

Anyone who meets the above criteria and was a Rest super fund member between 5 December 2008 and 30 June 2019 may be entitled to compensation.     To find out more, register here. The class action was listed for a case management hearing on Friday 16 February, 2024 in the Federal Court. Justice Button made orders including for Rest to file its defence by the 28 March 2024.

Commercial Regulatory Issues

By John Freund | February 16, 2024

The campaign across the United States to introduce state-level legislation regulating third-party litigation funding continues to gain momentum, as the Arizona state legislature has moved forward with its own bill designed to increase oversight of funding arrangements. An article in Chamber Business News covers the progression of HB 2638, the Litigation Investment Safeguards and Transparency Act, which was advanced by Arizona’s House Judiciary Committee earlier this week. The draft bill was approved by the committee in a 5-4 vote and will now be sent to the House Rules Committee, before proceeding to a full vote in the House. The language in the current version of HB 2638 bears a striking similarity to the bill making its way through Florida’s legislature, with an emphasis placed on increasing transparency requirements and laying out restrictions on funders’ control over the litigation and settlement processes. As is the case in the Florida bill, HB 2638 prohibits litigation financiers from paying commissions or referral fees, and prohibits them from assigning any part of a litigation financing agreement. The bill, which is sponsored by Rep. Travis Grantham, has received support from the American Property Casualty Insurance Association, the U.S. Chamber of Commerce Institute for Legal Reform, and a coalition of Arizona’s business associations. Those organisations publicly opposing the bill include the Arizona Trial Lawyers Association and the International Legal Finance Association (ILFA).

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Announcements Commercial People Moves

Global law firm behind $70 billion BHP mining disaster claim launch Sydney office

By John Freund | February 16, 2024

The lawyers behind a multibillion-dollar class action against BHP over the fatal 2015 Samarco dam disaster in Brazil, are opening an office in Sydney.

Global law firm Pogust Goodhead has corporates who fail to uphold their social and environmental responsibilities in its sights as it establishes an Australian presence with the opening of an office in Sydney’s legal district at 126 Phillip Street.

Pogust Goodhead is bringing a case against BHP, the world’s biggest miner, on behalf of over 700,000 claimants in Brazil following the collapse of the Fundão Dam in 2015. The collapse killed 19 people and released 50 million metres of toxic waste, destroying entire villages and livelihoods. The case is the largest class action of its kind and is set to go to trial in London in October 2024.

The new office in Sydney is expected to serve as a base to launch new claims against Australian corporations who fail to uphold their obligations.

Global Managing Partner Tom Goodhead said:

“We are delighted to be launching in Sydney. We are establishing a base in BHP’s backyard to ensure we explore every avenue in our fight for justice for the victims of one the world’s worst environmental disasters.”

“The mining sector in Australia plays a vital role in ensuring the availability of increasingly important rare and critical minerals, which makes it a major driver of economic growth and wellbeing. However, with this enormous wealth and influence comes a responsibility to the communities in which they operate - a responsibility premised on basic decency and fairness.”

“We are investigating a number of new cases against Australian multinational corporations, such as BHP, in which their commitment to this responsibility has been seriously thrown into question. With the launch of our Sydney office, we are putting Australian corporations on notice that we are ready to hold them to account.”

Described as ‘the first legal unicorn’, Pogust Goodhead, has seen huge growth in just over five years and now represents over three million clients worldwide. It is also accumulating a sizeable war chest, enabling it to confront some of the world’s largest corporate entities on behalf of its clients which include some of the most disadvantaged people on the planet.

In October last year the firm announced a landmark US$550m investment partnership with US-based emerging markets investment manager Gramercy. The firm employs over 700 staff and has offices in London, Rio, Edinburgh, Amsterdam, Miami, Philadelphia and now Sydney.

The Sydney office will be headed up by Partner | Head of Australia, Amie Crichton and Partner, Joshua Carton. With over 15 years’ experience, including across top-tier Australian and global firms, Amie is a highly sought after disputes specialist and commercial litigator. She has a proven track record in defending and prosecuting claims across the consumer, financial services, technology, resources and infrastructure sectors, with a primary focus on complex multi-party disputes and high-profile class actions. Amie is joined in the partnership by long standing colleague and complex commercial disputes and class action specialist, Joshua Carton

Partner | Head of Australia Amie Crichton said:

“Pogust Goodhead’s arrival in Australia is more than just another player in the legal field. What sets the firm apart is its global reputation and extensive network. In bringing their resources, knowledge and invaluable strategic partnerships to Australian shores, the firm is empowering individuals to seek justice on an unprecedented scale. This launch also signifies the firm’s recognition of Australia’s importance as a hub for representative proceedings and underscores its confidence in the country’s sophisticated class action framework. Pogust Goodhead is poised to leave an incredible mark, cementing their status as trailblazers in the pursuit of justice.”

Case Developments Commercial

By John Freund | February 16, 2024

As LFJ reported earlier this week, the ongoing saga of Burford Capital and Sysco Corp experienced a new twist as a Minnesota judge denied the joint motions for substitution of plaintiff in the antitrust lawsuits against pork and beef producers. Whilst Burford has already stated its intention to challenge the court’s ruling, litigation finance leaders and analysts have begun to offer their perspectives on what the potential impact of this court order may be. An article in Bloomberg Law gathers insights from legal scholars, senior executives from litigation funders and other organizations, as they react to Judge Docherty’s February 9 ruling. Maria Glover, civil procedure and civil justice professor at Georgetown Law School, framed the development as an unhelpful addition to the broader climate of scrutiny on litigation funding which has seen “a cascade of things going wrong.” In a similar vein of thought, Tom Baker, law professor at the University of Pennsylvania, said that the judge’s decision “will be something that the anti litigation funders will use to try to promote what the industry will regard as restrictive regulation.” However, leaders within the litigation finance industry have offered a far more measured reaction to the ruling, with Dai Wai Chin Feman, managing director at Parabellum Capital, describing it as “just more of the sideshow” and “a huge distraction from the underlying case.” Reinforcing this position, Rebecca Berrebi, litigation finance broker and consultant, emphasised that the Burford-Sysco situation was atypical for the industry, and “the result of a series of unfortunate events.”

Commercial Deals

By John Freund | February 16, 2024

The important role that litigation funding plays in supporting group claims has been evident in the sub-postmasters scandal, with funders able to assert the value they can provide to the public in facilitating access to justice. Moreover, funders are looking at the coming year ahead with optimism, with their sights set on major cases that could build momentum for collective actions in England and Wales. A new blog post from Erso Capital looks at the current state of collective actions in England and Wales, assessing whether 2024 might be a transformative year for group claims in this jurisdiction. Starting with the premise that England and Wales are currently trailing behind other jurisdictions’ class action frameworks, the article examines some of the key cases and developments that may ‘forge a workable regime.’ The two major cases highlighted in the post are the Mariana dam and Dieselgate claims, with the former set for trial in April 2024, and the latter due for a series of hearings in the lead up to a trial next year. The fact that both of these claims are representing a huge number of claimants, leads Erso Capital to suggest that ‘both will test to the extreme the case management powers of the court.’ Observing how effectively these claims are managed and whether they are able to proceed in an orderly fashion, will provide the industry with a guide as to how viable these large-scale collective actions are in England and Wales. Erso Capital also highlight the potential for more representative claims to be brought ‘under CPR19 on behalf of a group of claimants with the same interest’, noting that the Court of Appeal’s decision in January 2024 to allow a representative action to proceed ‘may lay the ground for future representative claims.’ Similarly, the article suggests that there may be opportunities for the CAT to expand its remit, citing the ongoing trial in Le Patourel v BT Group Plc as an important marker that could open the way for ‘the CAT regime to be widened to allow non-competition claims.’

Commercial Regulatory Issues

By John Freund | February 13, 2024

The dispute between the Malaysian government and the Sulu heirs has been one of the most high profile international arbitration cases in recent times, raising issues around state sovereignty and the role of third-party funders in international arbitration. Whilst Malaysia has already managed to achieve some success towards overturning the unfavourable arbitration rulings, the government is now increasing its vocal support for reforms around the international regulation of litigation funding. An article in MalayMail highlights new comments from Datuk Seri Azalina Othman Said, the Malaysian government minister for law and institutional reform, who stated that she had participated in several bilateral meetings with European Union (EU) officials to discuss its own efforts towards regulating third-party litigation funding. These meetings reportedly included representatives from the European Commission, European Parliament and European External Action Service. Azalina stated that “there is a pressing need for concerted global action to combat the misuse of third-party litigation funding solely for profit-seeking purposes, which subverts the pursuit of justice.” With the arbitrations and disputes in the Sulu case taking place across several EU jurisdictions, she highlighted that the issues which have affected Malaysia are also of concern to “EU member states that are not spared from such detrimental effects.” Azalina also expressed her desire for these discussions to continue with a wider and more international scope, including forums with policymakers from the United States and ASEAN. She stated that it was the Malaysian government’s position that there should be “a robust debate on regulating third-party litigation funding vis-a-vis the need for greater transparency, accountability and ethical professionalism among the funders.”

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Member Spotlight: Dinesh Natarajan

Lobbyist for ILFA Calls Failure to Disclose Foreign Entities ‘an Oversight’

Burford Capital and Sysco File Objections to Judge’s Denial of Substitution of Plaintiff

Silver Bull Provides Update on Its Arbitration Claim Against Mexico

RESPECTED LITIGATION FINANCIERS UNITE TO LAUNCH NEW VENTURE

Rocade Capital

Jeremy Marshall

Recoverability and Enforceability are ‘Frequently Neglected’ in Funding Applications

Aon’s Stephen Kyriacou Named 2024 Specialty Power Broker by Risk & Insurance

Lansdowne Appoints Lawyers, Continues Search for Funding in ECT Claim Against Ireland

NSW Supreme Court Rules Funder’s Commission is Not Recoverable as Damages

Evaluating Common Criticisms of Litigation Funding

KWS Litigation Shapes The Future with Low-Risk Investments and Substantial Returns

UK Government Announces Plans for Legislation to Overturn Convictions for Post Office Scandal Victims

QANLEX hires lawyers Marina Gouveia and Alejandro Arias as Investment Managers

Using Data Analytics to Maximize Efficiency in Litigation Funding Proposals

The Role of ATE Insurance in the Post Office Scandal

Omni Bridgeway Releases Market Update

Let’s Set The Record Straight: Consumer Legal Funding is Not Litigation Finance

Westbrooke Associates Unveils a Highly Sought-After Investment With Capital Protection

New Research Shows Businesses Increasingly Open to Reframing Legal Department from Overhead to Capital Source

An Overview of Litigation Funding in Switzerland

Nadhim Zahawi Calls on Government to Protect Access to Litigation Funding

Irish High Court Ruling Rejects Allegations of Third-Party Funding in Tax Claim

Rest Super Members Prepare for Class Action Over Alleged Breach of Trustee Duties

Arizona House Judiciary Committee Approves Litigation Investment Safeguards and Transparency Act

Global law firm behind $70 billion BHP mining disaster claim launch Sydney office

Industry Reaction to Ruling In Burford Capital, Sysco Antitrust Cases

Erso Capital: 2024 the ‘Crucial Year’ for Collective Actions in England & Wales

Malaysian Government Minister Meets with EU Officials to Discuss Litigation Funding Regulations

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