Motion to Dismiss Filed with Appeals Court in Sax v Fast Track Investments

The Frankfurt-based litigation financier Legal Finance SE, a subsidiary of listed company Nakiki SE (ISIN DE000WNDL300), is taking massive action against online casinos: According to current German legislation, most online casinos have been illegal since 2021 and must compensate players for all losses incurred in recent years. This means that injured parties can use Legal Finance to recover all the money they have lost through legal action.

Many players have lost hundreds of thousands of Euros playing online poker or sports betting in recent years. This is where Legal Finance comes in. Legal Finance funds lawsuits against casino operators in German courts and takes care of the entire legal process together with specialised consumer protection law firms.

The chances of success are high: German courts have already ordered several online casinos to pay refunds. In March of this year, the Federal Court of Justice (BGH) agreed with Legal Finance's legal opinion that most online casinos are illegal and that gambling losses must be reimbursed to victims.

Legal Finance has a 40% success rate in each case. The average amount in dispute is between €30,000 and €50,000. Legal Finance initially plans to fund up to 100 cases per month and intends to increase this volume significantly.

Legal Finance acquires cases by working with law firms, and claimants can also contact Legal Finance directly via dedicated websites.

There has been a resurgence in calls for new rules that would implement mandatory disclosure of litigation funding agreements in US litigation, spurred on by arguments about the influence of foreign parties in American courts. Whilst this position has substantial support, it is clear that not all members of the judiciary are equally keen on the idea of forced public disclosures when it comes to third-party funding.

An article in Bloomberg Law covers comments made by Judge Robert M. Dow Jr., counsellor to Chief Justice John Roberts, at an industry conference hosted in New York by the International Legal Finance Association (ILFA). 

At the conference, Dow spoke out against the idea of mandating the public disclosure of litigation funding details, arguing that any concerns around the control of cases or conflicts of interest could be addressed through private disclosures to the judge overseeing the case. Dow argued that, “as long as the funder doesn’t have control, I don’t think it’s gonna be a major issue for judges.”

Explaining his concerns around the push for public disclosure, Dow pointed to the fact that such disclosures could be used by opposing parties to gain an unfair level of insight into the funded party’s litigation strategy. Dow argued that such a rule would create an imbalance, saying that it was “really not fair to give one side the other side’s litigation strategy unless it’s mutual.”

Ursula Ungaro, a former federal judge and now a partner at Boies Schiller Flexner, spoke alongside Dow on the panel discussion and joined him in voicing opposition to proposals of mandatory disclosure. Ungaro tackled the suggestion of potential conflicts of interest with third-party funding, saying: “There are all kinds of things that go on in the world that have some influences on lawyers and clients and judge’s cases, to think that disclosure is going to solve that problem is nonsense.”