Third party financier Harbour Litigation Funding (HLF) has opened an office in Hong Kong to meet a rise in class actions in the Asia Pacific region.
The US Chamber of Commerce, scarred by the American litigation culture, has long been spreading the word about the pain that litigation can cause, and has a particular bee in its bonnet about third-party litigation funding (TPLF).
A sign of the growing third party funding market, Harbour Litigation Funding has raised a significant £230m investment fund to bankroll disputes as it looks to capitalise on rising demand.
It’s been a turbulent year for third-party funders, from court battles shining a spotlight on risky investments to new entrants and exits. Legal Business scopes the changing landscape for litigation’s bankrollers.
In early autumn, high-flying disputes lawyer Harvey Rands was taking a vacation in upstate New York. While many spend breaks catching up on books and perfecting golf swings, Rands, one of Memery Crystal’s highest billers, held in his possession an embargoed draft of the Excalibur costs judgment, a Commercial Court ruling on one of the most controversial pieces of litigation in recent years. Crucially the ruling, made public on 23 October, found third-party funders liable for indemnity costs in what became a precedent for an industry historically dogged with a controversial reputation.
In what constitutes the latest major bailed-out bank facing a shareholder dispute, third party financier Therium Capital Management is understood to be bankrolling the high profile claim by shareholders against Lloyds with the cost of funding the case thought to be as high as £12m so far.
The latest instalment in the Excalibur case is interesting for many reasons. One is Lord Justice Clarke’s claim that making litigation funders pay costs on an indemnity basis when costs are awarded against the party they are funding on an indemnity basis is not likely to chill access to justice.
‘A warning to third-party funders’: Litigation funders found liable for indemnity costs in $1.6bn Excalibur dispute
In what was a keenly awaited judgment for the third party funding profession, the Commercial Court has yesterday (23 October) handed down judgment on the costs liability of litigation funders in the high profile Excalibur Ventures v Texas Keystone & Ors battle, a $1.6bn energy dispute over oil rights in Iraqi Kurdistan and one of the biggest cases of 2013, and has ordered the funders to pay the defendants’ costs of the action.
London’s litigation funders are turning their attention to international arbitration. Can this deliver their breakthrough?
No sooner had Excalibur begun to drift from memory than another setback befell the litigation funding industry: the decision in August of the RSM v Saint Lucia majority to award security for costs on account of an unnamed funder’s involvement in the case, the first time such an order had been issued in the context of investment arbitration.
MARKET VIEW – LITIGATION
Simon Dluzniak of Bentham IMF discusses Europe’s litigation funding market and compares it with the more mature Australian market the funder has come from
The third-party litigation funding market in this jurisdiction is, relative to Australia, still in its infancy. Hence it is incumbent upon the various stakeholders within the industry to continue to create awareness of the benefits of litigation funding in assisting and shaping its growth. After what appears to have been a fairly positive start, third-party funding (TPF) appears to have suffered a backlash of sorts as a result of a spate of so-called ‘setbacks’, most notably the loss of high-profile funded cases (for example, the Excalibur case) and the collapse of a well-known funder (Argentum).
MARKET VIEW – LITIGATION
Therium’s Neil Purslow examines the different funding options available
Since the introduction of damages-based agreements (DBAs) on 1 April 2013, use of contingency fee arrangements (CFAs) in England and Wales has been very limited, due largely no doubt to the fact that partial DBAs are not permitted and also the flaws in the enabling regulations have created uncertainty as to the efficacy of this new form of agreement. Nevertheless, commercial litigators have shown significant interest in taking litigation risk on their cases in return for a contingency fee upside. While this has, however, been difficult to achieve to date, Therium has now launched a portfolio funding offering which, through using a variation of a typical funding structure, allows law firms to offer contingency fee-based services to their litigation clients,
Continue reading “Covering Every Contingency – Portfolio Funding of Litigation”