Tag Archives: Arbitration

Third party arbitration funding

Use of third party funding for international arbitration is growing, especially in Hong Kong and Singapore where prohibitions against its use have been either relaxed or eliminated. As third party funding is to stay in international arbitration, principles for arbitrators, parties and lawyers to use in such proceedings have been introduced. The purpose of these proceedings is to develop consistency and more informed decision-making in issues relating to third party funding. It is common knowledge that third part funding of litigation generally, and in the international arbitration sphere in particular, is a field that changes extremely fast. Therefore, there is a risk that any fixed set of principles introduced to this field will quickly become outdated and obsolete.

Read full article at Out-Law.com

Summarized by Natalia Tsar.

Third-party arbitration funding in the Netherlands

Nowadays, the Netherlands has a developing third-party arbitration funding market. A lot of international funders are active on the Dutch market. Third-party funding is more typical in the Dutch court litigation funding. Funders are active in relation to cartel damages follow-on litigation, at the enforcement stage, in relation to both arbitral awards and court judgments. Funding respondents appear less common. Claimants use arbitration or litigation risk insurance as an alternative to third-party funding. The initial fees are covered by the claimant and, in case of a negative outcome, by the insurer.

Read full article at Lexology.com

Summarized by Natalia Tsar.

Brexit effect on the litigation funding market

In the process of Brexit negotiations a lot of attention has been placed on freedom of movement and the status of EU citizens in the UK. There is also a question of what role the European Court of Justice will play in UK law. It is obvious that Brexit will have significant consequences for all sectors and markets, including litigation funding.

As a result of Brexit, the number of funded disputes in the UK is likely to rise. Also, it looks as if English courts will once again be permitted to grant anti-suit injunctions. And it can be a powerful weapon in international disputes. It is also becoming clear that the UK’s withdrawal from the EU won’t affect funded disputes negatively.

Read full article at Lexology.com

Summarized by Natalia Tsar.

CFPB/NY AG lawsuit against RD Legal Funding

RD Legal Funding, LLC is seeking to dismiss the lawsuit filed against it, two of its affiliates, and their individual principal in February 2017 by the CFPB and the New York Attorney General in a NY federal district court. It alleges that a litigation settlement advance product offered by the defendants is a disguised usurious loan. Notably, the complaint offered that the transactions violated New York usury laws. They were falsely marketed as assignments rather than loans. Moreover, they could not be assignments because the underlying settlements expressly prohibited assignment of claimant recoveries.

In the complaint, both the CFPB and the NY AG asserted deception and abusiveness claims under Sections 1031 and 1042 of Dodd-Frank. In addition to alleged violations of state civil and criminal usury laws (which were the predicate for one of the CFPB’s deception claims), the NY AG’s state law claims included alleged violations of NY’s UDAP statute.

Read full article at jdsupra.com

Summarized by Natalia Tsar.

Celgene Whistleblower Lawsuit

Plaintiff Grant & Eisenhofer PA, headquartered in Wilmington, Delaware, filed its lawsuit in the U.S. District Court for the Central District of California August 10. The law firm represents a California whistleblower in a False Claims Act lawsuit over the off-label promotion of cancer drugs. It is seeking more than $7 million in fees and costs. The defendants include California resident Beverly Brown and law firms Richard Harpootlian PA and Bienert Miller & Katzman PLC.
Ms Brown, who worked as a Celgene Corp. sales representative, filed her whistleblower complaint in 2010 over the off-label use of drugs Thalomid and Revlimid. According to Celgene, the litigation related primarily to allegations that it promoted Thalomid for off-label uses before its 2006 U.S. Food and Drug Administration approval for newly-diagnosed multiple myeloma, a form of blood cancer that develops in the bone marrow. Celgene reported last month that the pharmaceutical company would pay a total of $280 million to the U.S. federal government, 28 states, the District of Columbia and the City of Chicago.

Read full article at LegalNewsLine.com

Summarized by Natalia Tsar.

Takata Airbag Lawsuit

The lawsuit in this matter was filed in the U.S. District Court for the District of Connecticut. It was alleged that a woman was killed when a faulty airbag device violently exploded during a moderate speed crash. The deceased victim was a passenger in a 2009 Toyota Corolla. Her husband, who was driving car, sustained minor injuries. This lawsuit was filed just after Takata filed for bankruptcy. The Connecticut lawsuit alleges Takata knew its airbags were defective.  It did nothing to solve the problem. The injured husband has a long litigation process ahead of him. He may have problems paying litigation costs. “In situations like that, the perfect answer in most cases is to apply for litigation funding,” said Darren Monroe, representative for Litigation Funding Corporation, Michigan.

Read full article at LawFirmNewsWire.com

Summarized by Natalia Tsar.

Minnesota AG Files Lawsuit

The Minnesota Attorney General has filed a lawsuit against two pension advance companies. It is alleged that the companies violated Minnesota lending laws by making loans to Minnesota borrowers without being licensed as a lender. The New York Attorney General states that a litigation settlement advance product is usurious. It indicates that pension advance companies and litigation funding companies have become targets of state and local regulators. Certain states are trying label cash advance providers as lenders and their products as loans, as opposed to direct purchases, which would subject them to state and local usury laws.

Read full article at Litigationfinancejournal.com

Summarized by Natalia Tsar.

Litigation Funding in Arbitrations may be allowed in Hong Kong and Singapore

Hong Kong and Singapore are in the process of amending laws which will allow litigation funding. The proposed amendments will allow third-parties to fund arbitrations seated in these cities. Despite the fact that Singapore and Hong Kong are among the top locations for arbitration globally. Their current laws prohibit litigation financing.

Litigation Funding in Hong Kong

The Hong Kong Law Reform Commission first proposed an amendment to allow third-party funding in October 2015. Over a year later, a bill to that effect was published in the Government Gazette. The bill was formally introduced in Hong Kong’s Legislative Council in January 2017 at its “first reading.” The next step is the second reading, where a vote will take place. The date has not been announced yet. But the law is expected to take effect this year.

The bill amends the Arbitration Ordinance, the current law applicable to domestic and international arbitrations in Hong Kong. The amendment provides that the laws of maintenance, champerty, and barratry will not apply to third-party funding in arbitrations. The proposed law also provides for certain standards and requirements needed to provide or access funding in these cases.

Litigation Funding in Singapore

Singapore published its amendment in the Government Gazette in February 2017. Singapore Parliament approved the law, the Civil Law (Amendment) Act 2017, in January 2017. The law will abolish maintenance and champerty laws in Singapore and permit third-party funding in certain categories of dispute resolution proceedings. The new law takes effect on March 1, 2017.

Singapore’s amendment comes with associated regulations and rules of professional conduct. The regulations provide a list of criteria third-party funders must meet in order to provide financing. One such requirement is that the third-party must be in the “principal business” of litigation funding. The regulations also set out certain categories of cases where third-party funding will be allowed. As for professional conduct, one new rule requires attorneys to disclose any funding agreements to the relevant court or tribunal. The identity of the third-party funder must also be disclosed.

Read full article at AboveTheLaw.com

Summarized and reviewed by Jim Smith.

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