Insights

Thoughts and opinions on industry issues and trends.

Chris Dryland and Michael Fenn of Pinsent Masons share the highlights learned from the High Court in London that rejected a challenge over third party arbitration funding costs. The court's decision provided useful guidance by ruling that all it needs to consider, to determine if third party funding is reasonable, is whether recourse to third party funding was reasonable in the circumstances, and not whether other sources of funding were available. 
Justin Maleson of Longford Capital predicts even more widescale adoption and continued innovation in litigation funding over the next decade. He expects to see several states follow Arizona’s lead in allowing non-lawyer ownership of law firms and the continued development of defense funding offerings.
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.
Mark Howe of Cadwalader discusses the tax aspects of litigation finance with Phil Balzafiore, Head of Tax for Tetragon Financial Group, examining the tax consequences and tax trade-offs for investors and law firm borrowers, as well as tax mitigation considerations.
Andrew Mizner of ICLG shares highlights from the 2021 edition of the Global Class Actions Symposium. Third-party funding is “changing the market significantly”, opening a wider range of cases, explained Chris Warren-Smith, a London partner with Morgan Lewis & Bockius, in particular for securities and tax claims. We are starting to see a lot more types of actions funded,” he continued, describing funders as sophisticated operators, making “a very intelligent deployment of capital".
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.
Burford Capital and Longford Capital Management executives say that Arizona’s loosening of legal industry regulations opens the door for them to co-own law firms. They predict that with Arizona no longer requiring lawyers to own firms—and other states considering similar steps—law partners will increasingly consider the benefits of non-attorney ownership stakes. 
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'.

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