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Latest news on Litigation Funding industry

Pennsylvania Courts Deem a Complex Litigation Funding Agreement Void as Champertous

litigation funding agreement Polydyn Vs. Bayer caseA three judge panel has ruled a litigation funding agreement in WFIC LLC v. Labarre to be champertous, meaning to invest in litigation with interest in future proceeds, and, thus, void. The lawyer who represented the plaintiff in the original case obtained a $12.5 million jury verdict for his client, but received no money in contingency fees since the payment to the litigation funding investors was to come out of his fees. It is left to be seen what impact this decision will have on future litigation funding within Pennsylvania, as there is not much precedent on chemparty or litigation funding within the State’s jurisprudence.

View full post at Pennrecord.com

Summarized by Meghan Hallinan.

Australia’s Money Max Decision Allows Litigation Funders to Collect Fees from all Class Members

In Money Max Int Pty Ltd v QBE [2016] FCAFC 148, Australia’s Full Federal Court permitted a “common fund”, which allows a litigation funder to collect a “reasonable funding commission” (the exact amount of which would determined at a later time) from all members of a particular class, including members who did not sign up to a funding agreement.

The Court also stated that no class member be worse off under the order than had the order not been made, and that all class members be given notice of the order and an opportunity to opt out. In its order, the Court sought greater access to justice.  Although uncertainties remain, this decision will most likely make litigation funding more enticing for litigation funders in Australia.

View full post at Mondaq

Summarized by Francis Michigan.

UK’s Commercial Court permits Third Party Litigation Funding Costs in Arbitration Proceedings

essar-v-norscotIn CL-2016-000188 Essar Oilfield Services Limited v. Norscot Rig Management Pvt Limited, the United Kingdom’s Commercial Court upheld a decision to reward litigation funding costs to the victor of an arbitration proceeding. The Court’s decision to award litigation funding costs was based on the Arbitration Act 1996, which states that an Arbitrator “may determine by award the recoverable costs of the arbitration”, including “the legal or other costs of the parties.”

This is seen as a landmark decision that will draw third-party funded parties more towards arbitration  than litigation.

See full article at Lexology

Summarized by Jonathan Winsley

 

UK’s High Court Orders Litigation Funders be Revealed for Defendant’s Potential Security of Costs Application

The United Kingdom’s High Court recently ordered that Stuart Wall, the Claimant in a £700m swap misspelling, breach of contract, and LIBOR manipulation claim, must reveal litigation funders. The order’s purpose is to allow for Defendant RBS’s application against such litigation funders for security of costs, also known as legal fees in case of a successful defense. The High Court held that the Claimant’s right to privacy under the Human Rights Act of 1998 was not violated, because the Claimant pursued large stakes litigation in a system which allows th  e identity of such funders to become public. This is a notable decision because although litigation funders usually become revealed through the course of litigation, it is the first time that the High Court has ordered that their identities be revealed so early in the process.

Read full article at Lexology

Summarized by Antonis Tsenesidis

New York Court Revisits Litigation Funding and the Law of Champerty

The New York Court of Appeals, New York’s highest court, upheld in
Justinian Capital SPC v. WestLB AG the trial court’s summary judgment in defendant’s favor, holding that the lawsuit violated the State’s champerty statute. This is the first time in over a century that the Court found a suit to be champertous, meaning illegally funded by a third party that would also share the potential benefit if the funded party were to prevail. The noteworthy aspect of the Court’s holding is its expansive definition of champerty, which extends beyond fraudulent suits or suits that would not have been filed but for the third party’s funding. However, the decision confirms that the New York law does not apply to those investing over $500,000.

Read full article at Reuters.com

Summarized by James Wright

Proposed Northern District of California Rule Could Reveal Identity of Litigation Funders

Major players in the litigation funding industry are resisting a proposed amendment to the local civil rules of the Northern District
of California that would require plaintiffs who litigate in that forum
to disclose whether their suits are backed by third-party investors.
Promulgation of a rule requiring such disclosures could have a
nationwide effect, including opening doors to the possibility of
promulgation of a similar rule within the Federal Rules of Civil
Procedure, the rules that govern procedures in all federal trial
courts in the country.

See full article at TheRecorder

Summarized by Meghan Hallinan

Litigation funding company commits $1.7 million to a case against Chevron

therium-litigation-funding-icLitigation funders’ traditional cloak of confidentiality was recently ordered to be removed from a litigation funding firm by a federal judge presiding over the putative class action Gbarabe v. Chevron. 

The District Court for the Northern District of California granted Chevron’s motion seeking to require the plaintiff to produce a funding agreement between attorneys for the putative class and Therium Litigation Funding IC, whereby Therium invested $1.7 million in the outcome of the litigation.

In light of the class action nature of the litigation, the Court adopted Chevron’s argument that disclosure of the information regarding third-party funding was necessary to evaluate the adequacy of class counsel, which is one of the elements that a Court considers in determining whether a lawsuit should proceed as a class action.

See full article at LegalNewsLine.

Summarized by Jonathan Winsley

Oasis Financial Sued By Ex-employees

COOK COUNTY RECORD – Oct.18 – Ex-employees have sued Oasis Financial company.  The litigation finance company funds money to individuals.  Oasis is claimed to overwork their employees overtime pay, and also enforced employment agreements preventing former employees to work with competitors for as long as two years.

According to the lawsuit, Oasis required employees (Tyler Beauchamp and Trevor Scott) to work 10+ hour days, five days a  week.  They were and “discouraged from taking lunch breaks.” The lawsuit also alleges that the company did not pay to compensate for the added work hours, and paid no overtime.

Damages assessed to Oasis includes twice the amount of unpaid overtime hourly wages, statutory damages, punitive damages and attorney fees.

By Jonathan Bilyk

See full article at CookCountyRecord

Summarized by Walter Langkowski

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