“We have our own plan”: LionFish rejects the litigation funding playbook

It’s been a year since the LionFish Capital rebrand and some added hires that significantly expanded its senior advisory board, including Andrew Saker, former CEO of Omni Bridgeway. In this Q&A, we speak candidly with Tanya Lansky, Managing Director, and Tets Ishikawa, CEO, about LionFish’s middle-market strategy, its balance-sheet approach to funding, the case for greater industry transparency and professionalisation, and where they see litigation finance heading next.

1. Is hiring Andrew Saker another step on the road to becoming an Omni Bridgeway? 

TL: For about six months, we kept on being asked this, but the answer is no. That’s no disrespect to Omni, which is a fantastic business, or to Andrew, for that matter. We have our own plan and vision for achieving our definition of success, which doesn’t involve replicating others but is rooted in building a long-term sustainable business.

Nothing in litigation funding is easy and time will tell if we’ve got the right strategy, but irrespective, Andrew has brought with him a huge amount of experience, not just as the former CEO of Omni Bridgeway, but as an insolvency practitioner and a hands-on litigation financier.

2. That was actually going to be my first question - LionFish is not only an outspoken thought leader in the market but you mark your territory based on being different. But everyone says they are. What really makes you different?

TI: I would say it’s our capital structure that defines where and how we play. When LionFish was being conceived, we could have set up as an investment manager, like most litigation funders, generating revenues from management and performance fees by managing third-party investor monies which require big ticket investments. But had we done that, we would have just been more of the same. To put into context, a $300 million hedge fund can find a place to play in the $13 trillion alternative assets market where opportunities are diverse and plentiful. But in the relatively paltry $25 billion litigation funding market, a $300 million fund is already quite outsized, fighting with other similar sized funders for a very limited number of ultra-high value claims.

Instead, we chose to go down the principal investment route – invest money off our own balance sheet where we keep all our winnings but take the full hit when we lose – because this allows us to invest in more general, but still high value, commercial litigation cases that require anything from £1 million to £5 million of funding for claims in excess of £10 million. We may be seen to be small fry versus our peers, but we believe the market we focus on is actually far larger and more common for litigators than the ultra-high value claims litigation funders are generally known to fund.

TL: From a business perspective, Tets is right; our capital structure shapes everything we do. But it also underpins our focus on creating a sustainable, long-term business. And this is relevant because it shapes how we work with lawyers and claimants.

We may not be the cheapest funder – nor are we the most expensive either! – but we are always communicative, transparent and fair, which we feel over the years has given us the credibility and trust we seek to build in the market. And because we know it only takes a second to lose that hard-earned trust, we keep our sharp elbows tucked in and maintain the highest standards at all times. At least that’s how we see it but you’d better ask the legal market!

3. You started life as a subsidiary of a listed company that owned a law firm. Since LionFish exited the group in 2023, how have things changed?

TI: The idea was to invest money off our own balance sheet into cases run by other law firms, and we would use the group’s law firm to assess our cases using their unutilised hours. Operationally this was very efficient and cost-effective and it sounds great to have an entire law firm at your disposal to assess cases. But the real problem of this business model was, even if operated at arms’ length from each other, conflicts of interest.

The reality is there is an inherent conflict of interest between funder, solicitor and client, something which the European Law Institute’s Principles to Third Party Litigation Funding (published in November 2024) picked up on. We didn’t even fund our own law firm’s cases but we saw others do it before and some are still doing it. Quite how they do so still baffles us but even if that could be managed out, the real cost is commercial.

After we left the group, a significant number of law firms told us they had previously avoided approaching us because of our connection with another law firm. So coming out of the group and reasserting our independence has been a big boost.

TL: It’s not just market perception that has changed, but we have grown operationally too. Before, we were limited to investing in cases that matched the specialisms of the group law firm assessing them. It meant that of the 25-30 cases we received a month, we could only realistically assess what the law firm was capable of looking at.

Now, we have a much wider array of lawyers who cover most case types, and, with a preference for lawyers who have experience on the defendant side, we bring a wealth of experience and invaluable knowledge. So, not only are we better resourced, but we have much deeper and broader capabilities, and our underwriting is becoming both quicker and more comprehensive to help address the inevitable confirmation bias that comes with all funding applications.

4. Some would say that shift makes it less likely for you to approve cases and therefore less attractive to approach.

TL: Possibly. But let’s not forget that litigation is not a symmetrical game. A win for a claimant or plaintiff means winning the legal arguments and getting home on quantum and then recovering losses. A win for a defendant is rarely about winning the case, but rather getting the best possible financial outcome, whether that be through a strategy of delay, deferral, causation breaks, quantum and/or recoverability. A defendant may only need to succeed on one of those to be successful and “win”. So, we could fund any case but if we lose too many, we won’t be around to fund more – and for some funders, that might also mean not being able to continue funding existing cases.

TI: Like an Alfa Romeo – beautiful and fast, but it broke down so often you didn’t get to the end!

I think it also reflects a more commercial approach to funding. We really don’t “lawyer” cases, nor do we pretend to be a funder run by lawyers for lawyers. Tanya and I are finance professionals who get approached by legal teams with a strategy which we due diligence. We look at the case and the team and see if it is one that can win. In that regard, it’s no different to any other asset class, where you look at the business proposal, you assess the management team and then decide whether to invest. What we don’t do is run the case itself. Not only are we not qualified to do so, but we wouldn’t want to. And, actually, who would want us to? If we were a biotech investor, you wouldn’t expect us to be in the laboratory telling the scientists how to research their next breakthrough drug, so why would we do it with lawyers and legal cases?

TL: That’s not to say we don’t understand. The knowledge and expertise base we have is very strong but managing investments is a different skill set and that’s again one way in which we differ from the rest of the market.

5. That touches on the issue of the industry’s credibility, which seems to be the underpinning argument for those lobbying against the industry. 

TL: Yes but thankfully, the arguments are finally moving on from shallow, headline-grabbing narratives to substantive and meaningful debates. The various reviews, like the CJC report in the UK, the ELI Principles in Europe and others have helped start the process of reframing the narrative around substantive points. And that’s positive.

TI: But as an industry, I think we can be much more proactive in improving matters. There are lots of easy wins out there. A self-regulatory framework at the standard of other industries, perhaps based on the best of existing regulatory frameworks like Basel III, alongside standardised definitions similar to those used in ISDA derivatives documentation. Greater analysis of pricing levels that set out why litigation funder returns are actually reasonable (and for those critics out there who think it is too expensive, we invite you to cross sides and invest in cases alongside us!) would be a welcome tool, bringing greater transparency and encouraging better industry practice. We contribute where we can to this but it requires an industry to do it, not just one funder.

6. Is that why you released your documentation?

TI: Yes, not because we think our documentation is the best, but to encourage others to be more open. We keep on updating them and we’ve also released a waterfall calculator to help claimants and lawyers see more clearly how the cost of funding, ATE insurance and solicitor uplifts actually affect the amounts claimants take home.

TL: It lays bare the economic reality of funded litigation that might make uncomfortable reading but that’s precisely the point – let’s not sweep it under the carpet but be straight and honest about it and encourage higher standards.

7. Some in the industry see you as being critical of your own industry which might make you unpopular. Do you think that’s fair?

TL: That is more a result of the fact that we have not followed the path of joining the Association of Litigation Funders in the UK or the International Litigation Finance Association. But just because we’re not members does not mean we don’t want to achieve the same objectives. We contribute positively where we can. But at this stage, we have just chosen to contribute by action rather than by membership. *

TI: Having said that, we’ve been expanding into Australia this year and we have joined the Association of Litigation Funders of Australia, who are very proactive and constantly looking at ways of pushing the agenda forward for a better funding community and trying to put the industry on the front foot. And when there are criticisms of the industry, they engage with them and move the debate from the abstract to the factual so we can filter out non-sensical arguments like social inflation (the argument that because of litigation funding, insurers are paying out more claims which is driving up insurance premiums for the general public) and onto more sensible ones, such as pricing, control and process.

8. Wouldn’t you say that the way you just dismissed social inflation is a sign you’re not actually engaging in the debate?

TI: Not at all. Social inflation is actually a very poorly thought through argument, which remains stuck in the abstract rather than being grounded in facts. If anything is priced too low, there will always be inflation when the price needs to correct itself. The social inflation argument is premised on low insurance premiums being correct, but if insurers are paying out on claims to such an extent that it drives up premiums, then not only are those claims not vexatious but it means they were priced not on the basis of whether the underlying event would happen or not, but whether anyone would find out and bring a claim that the insurers would have to pay out on.

The fact that premiums go up is therefore factually not one of whether the insurable event happens or not but merely whether people claimed on it. That pricing correction is not social inflation but a simple market correction. It just so happens that the market correction doesn’t suit some.

9. Where do you think the industry will end up in a few years’ time?

TL: It will continue evolving, but evolution is not measured solely by size but also by quality. Whatever the size of the market, two things are obvious.

The first is that the market will naturally gravitate to jurisdictions and forums that offer greater certainty for funders. One just needs to look at the Competition Appeal Tribunal in the UK. Most funders have too much exposure. The number of new opt-out claims filed and certified has fallen off a cliff and until there is greater clarity and a framework that removes uncertainty, we feel there will be little new funded activity going into the CAT.

The second is that the funding market will become more professionalised. That is not to say it’s not professional at the moment, but when you compare the growth of litigation funding with that of any other asset class, it is going through the same blips. While the last few years may have been tough for funders, a lot of lessons have been learnt, and practices and standards have improved accordingly.

10. Closing Comments?

TI: The debate around litigation funding is often shaped by its loudest failures or its flashiest headlines but litigation funding is a lot more nuanced and far more encouraging.

Naturally, attention gravitates to the extremes: at one end, the ultra high value (nine-figure plus) cases and class actions; at the other end, to the high-volume consumer claims market. But in between sits the middle market, where we play – £1 million to £5 million investments into high-value general commercial litigation – a segment that has quietly worked, and continues to work, largely without fanfare.

TL: In the long term, we believe this is the segment that will build the industry's track record and durability. Not because of headline-grabbing wins or losses, but because it is built on strong, meritorious cases that genuinely demonstrate improved access to justice.