The University of Michigan is in talks to invest $5 million of its endowment in litigation funding.
The university plans to invest with Lake Whillans, a litigation funding company, with the goal of receiving a portion of proceeds from successful cases. According to Lake Whillan’s website, the company invests in meritorious commercial claims with realistic damages in excess of $20 million. The investment is part of the University of Michigan’s aim to diversify its portfolio by investing in areas where returns are independent of financial markets.
Last year, the university invested in real estate, credit, and energy funds. The university’s endowment was valued at $10.5 billion at the end of 2016.
View full post at Bol.bna.com
Summarized by Marc Lesnick
Recent research revealed the assets of the top 20 UK litigation funders rose 25 percent last year alone.
Their balance sheets totaled £723 last year, up from £575 in 2015. This also represents a 55 percent increase since 2011. The increase coincides with Burford Capital’s recent acquisition of Gerchen Keller Capital, which will total its combine assets at $1.2 billion.
The release of these numbers highlights just how fast the litigation funding industry is growing and becoming recognized as a lucrative investment opportunity.
View full post at SolicitorsJournal
Summarized by Matthew Dunes
The Consumer Financial Protection Bureau and the New York Attorney General filed a complaint against the litigation funding company RD Legal in the Southern District of New York this week.
At issue is RD’s practice of providing cash advances to people awaiting payments under statutory compensation funds and settlement funds. Cash advances are up-front payments which the consumer agrees to repay upon receipt of its settlement award. The CFPB claims in this case consumers were damaged by repaying amounts significantly larger than the advances they received.
The complaint alleges that RD markets the advance as an “assignment” which is really a loan that violates, among other laws, New York state usury laws and the Consumer Financial Protection Act. While there is still a question of the CFPB’s jurisdiction over RD’s cash advances, this case is significant. It suggests CFPB intentions to attempt to regulate the booming litigation finance industry, which has stayed relatively under the radar.
This is one of three cases CFPB has filed against companies providing cash advances to those awaiting settlement funds.
View full post at In.Reuters.com
Summarized by Meghan Hallinan
Third-party litigation financing agreements are now required to be automatically disclosed in all proposed class actions in the Northern District of California. The automatic disclosure rule is the first of its kinds in the United States district courts.
The new rule, which states that “in any proposed class, collective or representative action, the required disclosure includes any person or entity that is funding the prosecution of any claim or counterclaim,” was adopted in a court-wide standing order for all judges in the Northern District of California. Although this is a huge step toward greater transparency in third party financing, the rule is unlikely to impact big players in litigation financing like Burford Capital and Bentham IMF, as they do not typically fund class action cases.
A Burford statement indicated that the new rule may even allow courts to see how common litigation financing in class action lawsuits has become. The new rule is indeed limited—it was adopted after the court previously proposed an even broad requirement of automatic disclosure in all cases.
View full post at TheRecorder
Summarized by Meghan Hallinan