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Litigation funder Therium should be jointly and severally liable for indemnity costs after a specialist currency debt management firm unsuccessfully sued HSBC, the UK High Court has ruled. The funder agreed to back the claim by ECU Group against a number of HSBC entities over allegations that traders used knowledge of ECU’s foreign exchange orders to make a profit between 2004 and 2006, in a practice known as ‘front running’. However, ECU’s claim was ruled to be time barred by Mrs Justice Moulder, who held that the company had ‘sufficient knowledge’ to plead its case in 2006.
Costs lawyers should be more widely retained to stop firms from inflating their costs when they are working on a contingency basis, according to a new report by the Costs Lawyer Standards Board. One litigation funder told researchers that costs never came in on budget and were often overestimated. A specialist professional negligence insurer said they were ’desperate for claims to be presented honestly, based on evidence’. The message from both was that, in their view, solicitors’ firms were often presenting wildly inflated claims based on their interests in a CFA and this was not always acting in the best interests of the client.’
A solicitor accused of dishonestly funnelling nearly £20m of investors’ money from a legal financing fund into his own pocket has told jurors the fund was set up to fill ‘the big black hole in the market’ after access to legal aid was reduced. Timothy Schools is said to have received ‘just over £19.5m’ from the Cayman Islands-registered Axiom Legal Financing Fund before it collapsed in 2012. He allegedly used some of the money to pay for an estate in Cumbria, a personal trainer and football season tickets.
Solicitors are coming under the spotlight amid growing concern about how vulnerable clients were sold loans to fund family litigation. More than a dozen people have claimed to the Gazette they felt compelled to take out the loans with Novitas, now a subsidiary of merchant banking group Close Brothers, to fund proceedings in the last 10 years. They borrowed from £20,000 to £350,000 at an annual interest rate set between 18% and 30%. Both financial and legal regulators are understood to be investigating allegations – so far unfounded – of misconduct.
London-based commercial law firm Candey has urged the Court of Appeal to ‘remove the medieval shackles of champerty from legitimate solicitor-client agreements’ and validate the assignment of a now-deceased client’s claim to his solicitors. Candey is asking the court to ‘develop’ the common law so that assignments to solicitors are permitted where it would not ‘enlarge the benefit they would otherwise have received’. The commercial firm argues the introduction of damages-based agreements (DBAs) and the growth of litigation funding means that ‘lawyers are now as much commercial parties in litigation as they are officers of the court.'
Tets Ishikawa of Lionfish comments on the Competition Appeal Tribunal's rulings in two recent judgments (Kent v Apple and Coll v Google) that disclosing ATE premiums would give the defendants an 'unfair tactical advantage' and argues that if defendants want to go for marginal gains on funding and insurance agreements, they should equally be willing to give disclosure and transparency around the financial strategy for their case defence, including the costs provisioned for defending the claim and the amounts provisioned for any potential loss on their account. 
Google has failed to get a claimant's ATE premium disclosed. This is the second time the Competition Appeal Tribunal has refused to disclose a proposed representative claimant’s after-the-event insurance premiums, ruling that to do so would give Google as defendant an ‘unfair tactical advantage’. 
Affiniti Finance, a UK-based litigation funder backing thousands of cases, folded last year when it defaulted on its obligations to its main finance provider Fortress Capital. A recent administrator's report shows that the company was dependent on Fortress to enable it to advance loans to consumer litigants. But the relationship broke down shortly before administrators were appointed last November and Fortress issued an acceleration notice to Affiniti demanding repayment of the entire £42.9m outstanding.
Becca Hogan of Law Gazette predicts that recent landmark 'opt-out' cases have helped in the law of England and Wales, and the wider legal system, to combine to create an extremely powerful way for consumers to discharge their rights. With the first three opt-out collective actions having been approved, she predicts it is likely that we will see an increase in claimants pursuing breaches of competition law on an opt-out basis.
Technology giant Apple has lost a bid to reveal a proposed representative claimant’s after-the-event insurance premiums, with the Competition Appeal Tribunal ruling that disclosure would provide an ‘unfair tactical advantage’ by revealing the insurers’ assessment of risk. The class action is seeking estimated damages of up to £1.5 billion. A hearing to decide whether to grant a CPO in the proposed claim brought by Dr Rachael Kent – who is represented by international disputes firm Hausfeld and backed by litigation funder Vannin Capital – is due to take place in May.

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