Tag Archives: litigation finance industry

Portfolio Litigation Financing

During the last ten years, third-party litigation funding has become an essential and profitable product for funders, investors, law firms, and clients. Eventually, the funding model has been changing. And now it looks extremely different from the model that was first introduced to the legal world. One of the signs of this evolution is the emergence of “portfolio financing”.

Portfolio litigation financing has recently been the defining trend in litigation funding. As there has been a shift away from single-case funding toward multiple-case, or “case portfolio”, funding. Portfolio financing is useful for parties who don’t need financial assistance, but seek to offset risk or cut their legal expenditure. This funding model has advantages such as diversifying risk, an even flow of profits and losses, and long-range stability with predictable returns.

Read full article at Lexology.com

Summarized by Natalia Tsar.

Litigation Finance and Insurance

Corporate litigation finance is a new phenomenon in the United States. However, it is rapidly developing. At first, corporate litigation finance was perceived as relevant only to the financially weaker party. Now major corporations with strong balance sheets recognize the benefits of using it. To manage to present the possibility of litigation finance to the board, general counsel will ask questions about how it works, its benefits and risks. According to James Blick, principal of TheJudge and head of its U.S. operations, and Erika Levin, Esq., senior vice president at TheJudge, there are 5 tips for securing the best funding terms possible from the market.

Read full article at InsideCounsel.com

Summarized by Natalia Tsar.

Third party litigation funding of class actions in Ontario

In Houle v. St. Jude Medical Inc., 2017 ONSC 5129, Bentham IMF Capital Inc., an Australian-based litigation financing firm, entered into a financing agreement with Mr. and Mrs. Houle. They are plaintiffs in a proposed class action alleging negligent manufacture and distribution of implantable cardiac defibrillators and failure to warn of rapid, premature battery depletion.

As for contingency fee, the later the stage at which the action is resolved, the larger the payout that Bentham would receive. Justice Perell reviewed existing case law. His Honour stated that third party funding agreements could be approved only if they were legal, fair and reasonable. However, the Bentham funding agreement failed some conditions that had to be satisfied in order for a court to approve a third-party funding agreement. It ran the risk of overcompensating Bentham and interfered with the lawyer-client relationship.

Read full article at SecuritiesLitigation.blog

Summarized by Natalia Tsar.

Litigation Reform Needed

Litigation Reform is needed to restrict lawsuits undermining conservation. Environmental advocacy groups have exploited federal laws with “sue and settle” arrangements that enrich trial lawyers at the expense of taxpayers. “The idea behind ‘sue and settle’ is to circumvent the normal regulatory, rule-making process so that environmental groups can achieve major policy changes without input from the public or Congress,” said IER president Tom Pyle. “When politically well-connected green groups get to call all the shots with compliant government officials, it leaves no room for accountability and transparency.”
During Obama presidency “sue-and-settle” agreements involving the Environmental Protection Agency and the Interior Department “almost quintupled”. Many of the largest environmental groups get significant rewards without any public disclosure regarding the cost to the taxpayers.
Kent Holsinger, the manager and founder of a Denver-based law firm named Holsinger Law that specializes in lands, wildlife, and water law, was one of several witnesses who appeared before the House Committee on Natural Resources on July 17 to testify on behalf of five new bills aimed at reforming the ESA. He is encouraging members of Congress to take up the Sunshine for Regulatory Decrees and Settlements Act of 2017 as legislative fix to the “abusive environmental litigation” made possible through the EAJA. The bill would require public notice of lawsuits and settlement agreements and provide for transparency in accounting for cost of these agreements.

Read full article at FreeBeacon.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.

$20 million financing deal

A $20 million financing deal has been signed with litigation boutique Lewis Baach by Woodsford Litigation Funding. It will offer clients an expedited, one-stop arrangement for the financing of high value litigation. The deal covers matters in any jurisdiction around the world where Lewis Baach Kaufmann Middlemiss offer contingency fee arrangements. Also, it will work where funding is required for the additional litigation expenses, including expert witness fees, e-discovery costs and court and tribunal fees. Brazilian funder, Leste Litigation Finance, also supports the international arrangement between the two. As part of a collaboration agreement announced in March, for any matters with a Brazilian element, Leste and Woodsford will regulate funding jointly.

Read full article at GlobalLegalPost.com

Summarized by Natalia Tsar.

Litigation Finance: Big Law Exit?

Nowadays, joining the litigation funding industry seems to be a popular route when leaving Big Law. There are a lot of examples of funders growing their operations by raiding it. From their point of view, enlisting people from Big Law may be positive as they get the dual benefit. On the one hand, they hire someone who can quickly point out the strengths and weaknesses of a case. On the other, they employ someone who can source deals from former colleagues. But what’s the draw for the attorneys? The answer lies in the number of working hours.

Read full article at Americanlawyer.com

Summarized by Natalia Tsar.

Litigation Funding Company Hit With CFPB Complaint

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