SPAC Deal Generates Millions for Lawsuits Against Insurers That Stiffed Medicare

Wall Street’s latest blank-check company promises to be a litigation finance nightmare for property and casualty insurers. MSP Recovery, a Miami-area company that earns revenue by winning lawsuits against insurers, merged with a special purpose acquisition company in July. Earlier this month, MSP and its new partner Lionheart Acquisition Corp. II announced that Virage Capital Management LP, a litigation finance investor, had agreed to pay $3 billion for rights to collect 50% of future awards against insurance companies. More from Claims Journal.

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Insurers Tapped to Pay Growing Number of False Claims Act Actions

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)

Insights

Social Inflation or Science: What Is Fueling Climate Litigation?

Adam Grossman of science-based data analytics firm Praedicat counts eighteen US cases of climate litigation against energy companies since 2017, and with better science to support claims and a shift towards smaller plaintiffs (cities and counties vs. states), litigation funders are jumping in to provide resources. Adam also predicts another wave of cases developing in the not-too-distant future in which meatpackers, trucking companies and makers of diesel engines could soon be added to the list of defendants.

In the News

‘The dark side’ of litigation funding…

Investigative journalist Bill Myers does a deep dive on US funder Virage Capital Management, arguing that the firm’s high-risk, high-reward approach to its business—and its aggressive pursuit of debtors—has brought it unwelcome attention.

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