lawgazette.co.uk

All articles about lawgazette.co.uk.

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.
Ian Garrard of Innsworth Advisors argues that the criticism levelled at litigation funders for involving themselves in large groups or opt-out claims such as the recent Lloyd v Google case is ironic in that those levelling the criticism have benefited enormously in comparison to the returns for funders, who facilitate access to compensation for the class who have been wronged.
Michael Cross of the Law Gazette reports that nearly one third of partners at firms with 50 or more lawyers are examining a stock exchange float within the next 18 months, according to research published last week. The poll, commissioned by Harbour Litigation Funding, found that 31% are 'actively considering an initial public offering' while 44% said an IPO was 'under consideration'.

Before You Go

Never miss a thing in the litigation finance market.