March 29, 2022

Litigation funding companies in the U.S. committed $2.8 billion toward new deals in 2021, according to an annual survey by Westfleet Advisors. This represents an 11% increase from the prior year and can be attributed in part to rising interest from the world’s biggest law firms. While more money was spent overall, the average size of deals has declined by around 20% since 2020 to $6.5 million. The survey showed that new funds have popped up specialising in smaller deal sizes.
The UK is reconsidering its stringent defamation laws which effectively muzzle the press both in Britain, and in many other countries. "For the oligarchs and super-rich who can afford these sky-high costs the threat of legal action has become a new kind of lawfare. We must put a stop to its chilling effect,” said Prime Minister Boris Johnson in a statement. The government has suggested capping costs, but some hope for judges to impose double or triple costs if a claim was found to be abusive as done in Canada and elsewhere to prevent abusive litigation. This could potentially attract litigation funders to back these cases, secure in the knowledge that they could potentially double or triple their money if they won.
Subpostmasters who helped uncover the Post Office IT scandal but missed out on full compensation are to get payouts under a new government scheme. The 555 workers won a landmark civil case against the Post Office in 2019, but saw most of their settlements swallowed up by legal fees. They will now get the same level of compensation as other subpostmasters who were wrongly convicted. Therium, the funder that backed the initial litigation, has agreed to waive its rights to any claim on the new pot of compensation.
Clea Bigelow-Nuttall of Pinsent Masons reviews the set of amendments the Administrative Counsel of the International Centre for the Settlement of Investment Disputes (ICSID) has approved to its rules for resolving investor-state disputes after a six-year consultation period. She notes that while some updates to the ICSID Rules are wholly welcomed — addressing increased transparency, improving the efficiency of the arbitral process and codifying the use of third party funding — others, such as the new obligation to disclose the name and address of any third party funding, may risk fettering access to justice.
Mike Wright of ESA Risk shares the ins and outs of asset tracing after reports that some Russian oligarchs have moved their superyachts to avoid having them seized with sanctions being placed on some Russian organisations and individuals.
James Stewart of Penningtons Manches Cooper analyses the serious consequences of the decision in the UK case LS v PS which upheld the privilege afforded to Financial Dispute Resolution hearings under the Family Procedure Rules against the disclosure of potentially fraudulent activities. He stresses that if upheld, it may well “sound the death knell” for litigation funding in family proceedings.

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