February 8, 2022

Kirstin Dodge, Jonathan Barnett, Lucas Macedo, Patryk Kulig and Maria Victoria Gomez of Nivalion AG question whether third-party funding can find the right place in investment arbitration rules. They look at recent recent regulatory developments in TPF in investor-State dispute settlement, including publication of the VIAC Rules of Investment Arbitration and Mediation to determine the impact of these provisions on TPF.
Rhys Corbett of Bryan Cave Leighton Paisner LLP predicts that the High Court’s decision in Crossley & Ors v Volkswagen Aktiengesellschaft & Orsa may lead to a new direction for the law on implied fraudulent misrepresentations. Implied fraudulent misrepresentation claims are generally difficult to get off the ground, primarily due to an apparent requirement for the claimant to have given contemporaneous conscious thought to the representation for the purposes of reliance (the “Awareness Requirement”). Rhys notes that there are a number of actions currently proceeding under this provision, which appears to be particularly attractive to litigation funders, but none has yet proceeded to trial.
Tets Ishikawa of LionFish Litigation Finance (UK) Ltd sets out several common-sense reasons as to why recoverability of CFA success fees, ATE premiums and funder returns should be considered for commercial cases and what degree of recoverability should be permissible, now that we have a market with sufficient experience to provide a useful reference point. 
The litigation finance industry, like many others, saw deal activity slow to a crawl during the pandemic as courts were closed for all but the most heinous crimes, creating backlogs of cases in many countries. Now that some normalcy is returning to societies and economies, litigation funders are anticipating the increased deal flow from both new cases coming to market and the backlog beginning to clear. 
In Australia, a Senate committee has signed off on the Morrison government’s controversial litigation funding reforms but have asked for changes to the bill before it is passed by the parliament. The senators recommendation is that greater judicial discretion be written into the bill to weaken its centrepiece policy of limiting costs claimed by lawyers and litigation funders. The bill came out of concerns that third-party litigation funders were claiming a disproportionate share of successful actions relative to their costs and risks. 
The proliferation of litigation funding in the U.S. has extended to civil rights claims brought by the wrongly convicted. Some funders are willing to provide exonerees as much as $1 million in upfront cash. Recently, Chicago-based exoneree Charles Johnson received $226,000 from Illinois after serving 22 years for a crime he didn’t commit. With funding from Validity Capital (at their cost of capital) and represented by his lawyers at Kirkland & Ellis, he was able to successfully sue the City of Chicago and its police department in 2018.
A Scottish judge has said he will allow hundreds of Kenyan farm workers to sue for damages in a class action against their employer, Finlays, one of the world's biggest tea producers. In a previous hearing the firm argued the action does not meet the requirements of Scotland's rules on group litigation proceedings. Thompsons Solicitors are representing the workers.

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