ILFA holds inaugural European Conference at The Law Society in London

The International Legal Finance Association (ILFA) hosted its inaugural European conference on 27 June at The Law Society in London, bringing together leaders across legal finance, law firms, corporates, investors and the insurance industry.

Gary Barnett, Executive Director of ILFA, kicked off the day stressing the momentous nature of the event for ILFA, its members and the industry. Following his remarks, the conference began with the State of the Industry Panel – moderated by Paul Hodkinson, Editor in Chief of International – with Christopher Bogart, Chief Executive Officer, Burford Capital; Sarah Johnson, Co-Head Litigation Finance, D.E. Shaw; Neil Purslow, Chief Investment Officer, Therium; and Andrew Saker, Chief Executive Officer, Omni Bridgeway.

These leaders in legal finance discussed the opportunities and challenges facing the industry and the developments we can expect to see in the future, beginning with law firm financing. While Therium expressed interest in this opportunity and said that this type of financing is happening more than is discussed, Omni expressed slightly more doubt about pursuing these investments. Consolidation and the secondary market were other key areas of discussion, specifically, panelists shared insights into how the secondary market can be moved from theory to practice. Lastly, this panel highlighted the steps that are being taken with the SEC to create clear financial accounting practices for the industry in order to move towards a global standard and how this could add value to the industry.

Following this, Phillip Leibfried, Head of Europe at Burford Capital, moderated a panel on The European Opportunity. Speakers included Paul Hitchings, Managing Partner, Hitchings & Co; Genevieve Poirer, Partner, LALIVE; and Claus Thiery, Partner CMS.

This panel provided an insight into the state of play in Europe, particularly in Spain and Germany, and panelists discussed how the introduction of the EU Representative Action Directive could lead to greater competition between jurisdictions to establish the most optimal legal mechanisms for redress. While there remains some lack of understanding about legal finance across Europe, this is improving as lawyers observe others using various products and familiarize themselves with different financing structures.

The Investing in Legal Finance Panel moderated by Equities Market Professional Trevor Griffiths featured both public and private market experts including Nils Bendler, Portfolio Manager, PG3; Gareth Hunt, Managing Director, Stifel; Daniel Lasry, Investment Analyst, Partner, Forton Partners; and Bjorn Tessiore, Partner, Metric Capital Partners.

Panelists revealed that while the opportunities within legal finance for investors are often misunderstood, the current economic climate has created new incentives to better understand the industry. While investors have varying degrees of knowledge about legal assets, there is growing awareness and interest in the law firm industry and investors are watching the developments in this space with much interest. One of the key takeaways from this panel is that as the industry continues to grow, we can expect it to become more of a mainstay asset class for investors.

Attendees then heard the client view from Amaury de Brujin, Associate Director Legal, Royal FrieslandCampina; Chris Campbell, Senior Litigation Counsel, Baker Hughes; Emma Carr, Partner and Co-Chair of ThinkHouse, Gowling WLG; Karl Hennessee, Senior Vice President, Head of Litigation, Investigations & Regulatory Affairs, Airbus; and Paul Salazar, Principal Counsel, Siemens AG in the In-House Perspective Panel, moderated by Ellora MacPherson, Managing Director and Chief Investment Officer, Harbour.

Panelists discussed the factors that are considered when deciding whether or not to pursue a claim and described their conversations with their CFOs, which are often concerned about predictability and their bottom line. One of the key takeaways from this panel was that defence financing is top of mind for corporates and an area of interest for continued discussion with providers. Lastly, Emma Carr shared fascinating research that highlights the impact of litigation on companies’ share prices, how that impact differs whether you are brining a claim or defending, and explained how legal finance can play a role in reassuring investors.

Innovation in the European Legal Market was the next topic on the agenda and Neil Purslow, Chief Investment Officer at Therium, moderated the discussion by Jamie Curle, Partner, DLA Piper; Natasha Harrison, Founder and Managing Partner, Pallas Partners LLP; Richard Healey, Partner, Gately; Elena Rey, Partner, Brown Rudnick LLP; and Clive Zietman, Partner, Stewarts.

This panel focused on the ways in which law firms use legal finance. As well as discussing opt in and opt out claims, book building and portfolio arrangements, law firm financing to accelerate growth and use of technology was also a key theme. Legal finance providers are able to be more creative than banks and other sources of financing, which is important for law firms. Panelists also shared how they pick and choose legal finance providers to work with, revealing that they are not always wedded to one legal finance provider.

The final panel of the day was Insurance and Risk Management, moderated by Mark Wells, Global Head of Portfolio Management, Omni Bridgeway. Nicholas Marler, Head of Technical Underwriting, Litica; Nick Moore, Director, M&A Transaction Solutions, AON; and Richard Wise, Partner, Addleshaw Goddard, were panelists. This discussion provided insight into developments in the insurance market, and ways in which it can complement the legal finance industry. Developments include judgment protection insurance, a growing market which is helping clients turn a contingent asset into a definite one. In addition, award enforcement insurance can be used in tandem with financing in order to reduce the risk involved in enforcement actions. Finally, we can expect more large credit funds entering the legal finance industry, thanks in part to insurance wrappers.