November 1, 2021

A US federal district court has rejected a novel request from class counsel for reimbursement of litigation funding expenses, stating that litigation funding is just "the cost of doing business" for class counsel. Among the costs for which counsel sought recovery were a $300,000 payment to a broker that reportedly arranged the litigation funding agreement, as well as $15 million to be paid to the litigation funder, which represented a $5 million return on the funder’s $10 million investment.
The U.S. Justice Department has initiated more False Claims Act actions this year than in any year since 1994, driven by increased government spending during the COVID-19 pandemic as well as litigation funders' appetite to back whistleblower claims. More from Claims Journal. (Editor's note: it is worth keeping in mind that the government appears potentially wary about funders' involvement in such cases)
Adam Jacobs and Julian Chamberlayne of Stewarts urge claimant groups in large-scale funded commercial claims to consider the importance of ensuring that ATE insurance policies are sufficiently robust in light of a recent UK case in which the litigation funder was required to put up additional security after the court found that there was a real possibility that the ATE insurance policy taken out by the claimants could be avoided by the insurer.
Felicity Ewing of Dentons comments on the FCA's concerns that certain unscrupulous firms are looking to cash in on investor appetite for ESG investment by simply putting a "green" wrapper around funds without true ESG credentials and warns that the risk of being held to account in litigation should not be under-estimated, as the combination of angered investors and claimant law firms and litigation funders looking for opportunities will likely be a dangerous cocktail.
European consumers do not want lawsuit finance companies to invest in civil litigation without oversight, and they strongly support a range of proposed safeguards to keep third party litigation funding in check. Those are the major takeaways from a survey of over 5,000 European Union consumers across France, Germany, Netherlands, Poland, and Spain, conducted by international polling firm WorldThinks.

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