News & Blog
In a Law Society Gazette commentary piece, Lisa A. Rickard, the president of the U.S. Chamber Institute for Legal Reform, said a case potentially before the UK Supreme Court is the only thing separating the UK legal system from a “US-style litigation monster”. Merricks v. Mastercard, a £14 billion collective action lawsuit, represents the first true test of the Consumer Rights Act of 2015, which created a collective action mechanism in the UK.
New Zealand announced its Law Commission will be looking into the growth of third party litigation funding, becoming the latest country to examine the practice. A previous review of litigation funding by the Law Commission stalled last year.
A US-based litigation funder announced this week it will fund the £14 billion lawsuit against Mastercard, with an eye towards a massive payday. Innsworth Litigation Funding, which is owned and funded by the well-known New York hedge fund Elliot Management, said it would fully fund the largest class action case in the UK, which was revived after first being rejected by the Competition Appeal Tribunal.
As the European Parliament deliberates on a bill that would bring U.S.-style class actions to the European Union, one of the world’s largest litigation funders announced that it will return to the continent for the first time in two years.
Five Australian law firms have threatened to sue a single company. If they all file, this would be the most class actions against one company in Australian history. Reuters recently called this an “unprecedented class-action feeding frenzy.” What you’ll also notice in that article is how litigation funders are backing these lawsuits and looking to make a profit.
Three U.S. Senators have introduced a bill that would require transparency in third party funding in class action and multi-district litigation. It takes aim both at litigation funding and lawsuit lending, in which lending firms offer plaintiffs loans with “up-front” cash that usually come with sky-high interest rates.
Burford Capital, a third party litigation funding firm, announced that its stock just gained 29.4 percent in value. The firm, which makes its money investing in lawsuits, took in £244.3 million ($341.2 million) in revenue last year, according to Shares Magazine, which is about 20 percent more than what was forecast. Burford’s investments reportedly returned 75 percent on invested capital (Shares Magazine says just a 15 percent rate is the sign of a “good quality business”) and 31 percent internally.
Mark Behrens, chairman of the International Association of Defense Counsel’s civil justice response committee, told National Law Journal that third party funding can “raise ethical problems” and inflate litigation costs.