The recent rise of litigation funding, frequently noted on this site, has been accompanied with rising uneasiness, at least in certain quarters, as well as calls for some form of regulation. Litigation funding is in fact subject to regulation in some countries, including those where there is a longer history of third-party litigation financing; in Canada, for instance, it has become an accepted practice that litigation funding must be disclosed and judicially approved. There have been various calls in this country for litigation funding to be regulated, but up until now, now there have been no affirmative steps toward regulation. However, on January 23, 2017, the Northern District of California adopted new rule — the first of its type — requiring the automatic disclosure of third-party funding agreements in proposed class action lawsuits.
Continue Reading District Court Adopts First-of-its-Kind Litigation Funding Disclosure Requirement
A Watershed Event in Litigation Funding Industry and More Thoughts About Litigation Funding
Any question that litigation funding has become a very big business was completely eliminated by the December 14, 2016 announcement of the merger between Burford Capital Ltd., the world’s largest publicly traded litigation funding firm, and GKC Holdings, LLC, the parent company of Gerchen Keller Capital, the largest privately held litigation funding firm. When the combination is completed the merged company will have $2 billion committed to litigation and a current portfolio of more than $1.2 billion in litigation investments, with hundreds of millions of dollars of capital available for further litigation investments.
Continue Reading A Watershed Event in Litigation Funding Industry and More Thoughts About Litigation Funding
Class Action Litigation in Australia Poised for Further Growth
Class actions have been a big deal in the U.S. for a long time now, but what is really interesting is that class actions (and other forms of collective action) are now becoming a big deal outside of the U.S. One place in particular where class actions have become a very big deal indeed is in Australia. As detailed in a recent study, class actions have in recent years become a well-established part of Australia’s litigation landscape. Recent judicial developments seem likely to make Australia an even more attractive jurisdiction for class action litigation.
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U.K. Court Sends Cautionary Note to Fledgling Litigation Funders
A recent U.K. appellate court sends a strong cautionary note to litigation funders about the need for vigorous and independent pre-litigation due diligence and of the risks that can follow their support of an unmeritorious claim. In a November 2016 Judgment, the U.K. Court of Appeal ruled that the litigation funders that supported a claimant’s unsuccessful claim to oil field production rights are jointly and severally liable for the successful parties’ fees and costs. The Court’s ruling acknowledges litigation funding’s role in the system of civil justice, but the Court’s decision also highlights an expectation that the funders must evaluate the claims they support – and, because they have a substantial stake in a claim’s outcome , must accept the consequences if their evaluation is deficient. The U.K. Court of Appeals’ November 18, 2016 decision in Excalibur Ventures LLC v. Texas Keystone, Inc. et al. can be found here.
Continue Reading U.K. Court Sends Cautionary Note to Fledgling Litigation Funders
Guest Post: The 101 of Litigation Funding in the German D&O-Claims Arena
One of the most significant recent developments in the litigation environment has been the rise of third-party litigation funding. However, as I noted in a recent post, the impact of litigation funding has varied from jurisdiction to jurisdiction based on differences in the local law. In the following guest post, Burkhard Fassbach, a German attorney and D&O Advisor to the Frankfurt-based MRH TROWE Brokerage Group, and Carsten Wettich, a founding partner of Berner Fleck Wettich, a Dusseldorf-based corporate law firm, take a look at litigation funding environment in German and its impact on the D&O claims arena there. I would like to thank Burkhard and Carsten for their willingness to allow me to publish their article as a guest post. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Burkhard and Carsten’s guest post.
Continue Reading Guest Post: The 101 of Litigation Funding in the German D&O-Claims Arena
As Litigation Funding Rises Globally, Important Local Differences Affect its Impact
As I have previously noted on this site, the rise of third-party litigation funding is one of the most significant and potentially consequential development in the global litigation arena. But because of differences in countries’ legal systems, the escalation of litigation funding means and will mean different things in different jurisdictions. In an interesting November 10, 2016 Law 360 article entitled “U.S. vs. The Rest: Litigation Funding’s Local Characteristics” (here, subscription required), Noah Wortman of the Goal Group of Companies and Jeremy Marshall of Bentham Europe Ltd. suggest that the rise of litigation funding has had and will continue to have important consequences in the litigation arena, but those consequences differ and will differ due to important differences in the litigation environment in the various countries. The authors’ comments include some interesting insights into litigation funders’ investment goals.
Continue Reading As Litigation Funding Rises Globally, Important Local Differences Affect its Impact
Courts Throw Some Shade at Litigation Funding Arrangements
One of the most interesting and important recent litigation-related developments has been the rise of third-party litigation funding. An important part of this development has been the more or less general view that there is nothing improper about these kinds of arrangements and, in particular, that litigation funding does not represent improper champerty or
Guest Post: Litigation Finance: Stop The Hide-And-Seek Game
Litigation Funding is an increasingly important part of the current litigation scene, but it remains controversial. One of the important issues under debate is the question of whether or not litigation funding arrangements must be disclosed. In a recent discovery-related ruling (here), Northern District of California Judge Susan Illston confronted this question of whether or not a class action plaintiff must disclose third-party litigation funding contracts. As discussed below in the following guest post from Lisa Rickard, the President of U.S. Chamber Institute for Legal Reform, takes a look at Judge Illston’s decisions and examines its relevance in the ongoing debate regarding litigation funding. I would like to thank Lisa for her willingness to publish her article as a guest post on my site. I welcome guest post submissions from responsible authors on topics of interest to this site’s readers. Please contact me directly if you would like to submit and article. Here is Lisa’s guest post.
Continue Reading Guest Post: Litigation Finance: Stop The Hide-And-Seek Game
Interview with Christopher Bogart, CEO of Litigation Funding Firm Burford Capital
One of the most noteworthy recent developments in the litigation arena has been the rise of litigation funding. Litigation funding is well-established in Australia and Canada, and it is becoming increasingly important elsewhere. Among the largest litigation funding firms is Burford Capital, which is a publicly traded company with offices in London and New York and whose securities trade on the London Stock Exchange. The company’s most recent interim financial results can be found here. Christopher Bogart, who previously was EVP and General Counsel of Time Warner and whose background includes a stint at the Cravath law firm, is the company’s CEO. In the following post, Chris answers my questions about litigation funding and about his firm. My questions appear in italics, followed by Chris’s answers in plain text. I would like to thank Chris for his willingness to participate in this Q&A.
Continue Reading Interview with Christopher Bogart, CEO of Litigation Funding Firm Burford Capital
After the Hulk Hogan Lawsuit Funding Flap, Is it Time for a Look at Litigation Financing Regulation?
In recent years, one of the most important developments in litigation in the U.S. has been the rise of the litigation funding industry. Indeed, the industry’s rise has more recently been fueled by increasing investor interest, even as the industry itself has diversified into lawsuit portfolio investing (as opposed to individual-case investing). The industry’s rise and increasing importance already had attracted scrutiny and criticism, but nothing compared to the deluge of attention that has followed revelations that Hulk Hogan’s privacy litigation against Internet scandal site Gawker was funded by Silicon Valley mogul Peter Thiel. The news about Thiel’s financial involvement has produced a cascade of commentary about litigation funding, which in turn has arguably put the litigation industry on the defensive. The news has also fueled a debate about whether there should be more transparency about litigation funding, and even whether there should be other litigation funding industry regulation, as discussed below.
Continue Reading After the Hulk Hogan Lawsuit Funding Flap, Is it Time for a Look at Litigation Financing Regulation?