The Top 5 Developments in Litigation Finance in 2023
In 2023, the litigation finance industry experienced a series of noteworthy developments. From high-profile lawsuits to increased regulatory scrutiny, this article explores the top 5 events that shaped the industry. Learn about the legal battles between Sysco and Burford, the YPF case with its staggering return on investment, the ongoing debate on disclosure requirements, the impact of the PACCAR ruling, and the efforts of Judge Connolly to uncover hidden connections. Stay informed about the latest trends and challenges in litigation finance.
Sysco Sues Burford
In March, Sysco Corp. filed a lawsuit against litigation funder Burford Capital, accusing them of interfering in settlement efforts for multiple antitrust suits against poultry processors and meatpackers.
Burford had invested $140 million in the cases and obtained a New York arbitration award that prevented Sysco from finalizing settlements. The dispute was eventually resolved when Sysco assigned its claims to an affiliate of Burford, Carina Ventures LLC.
YPF Case: A Landmark Victory
Discover the YPF case and the remarkable return on investment achieved by Burford Capital, as well as the ongoing legal battle and its potential implications.
Burford Capital secured a significant victory by positioning itself for a staggering 37,000% return on its investment in claims against Argentina related to the nationalization of YPF SA, a state-owned oil company.
In September, a New York federal judge ordered Argentina to pay $16 billion. However, Argentina has appealed the decision, leading to a temporary delay in the enforcement of the judgment.
Disclosure Requirements: A Divided Landscape
Montana passed a law requiring litigation funding disclosure in all civil cases before its courts, while a similar bill in Louisiana was vetoed by the governor. With a new governor taking office in January, there will be renewed efforts to advance legislation in Louisiana.
At the federal level, legislators introduced bills aiming to require disclosure of foreign entities funding lawsuits in US courts and prohibit sovereign wealth funds and foreign governments from engaging in such practices. However, these bills face long odds of passage in a divided congress.
The Impact of the PACCAR Ruling
Uncover the implications of the UK Supreme Court’s decision on litigation funding agreements, its effect on funders and clients, and potential legislative changes.
The UK Supreme Court ruled that litigation funding agreements, where the funder’s recovery is a percentage of the damages secured in the funded claim, are unenforceable in a class action involving truck manufacturer PACCAR.
This decision prompted funders to revise their contracts with clients, as many agreements were structured in this manner. However, an amendment to the Digital Markets, Competition and Consumers Bill could partially reverse the PACCAR decision, allowing certain third-party funding agreements to remain enforceable in opt-out collective proceedings.
The bill will undergo a detailed review in the House of Lords, potentially leading to significant changes in the litigation finance landscape.
Judge Connolly’s Pursuit of Transparency
Explore the efforts of Judge Colm F. Connolly to uncover hidden connections in litigation funding and the potential consequences for lawyers involved.
Delaware federal Judge Colm F. Connolly took it upon himself to investigate the presence of litigation funding in cases in his courtroom. In April 2022, he issued a standing order requiring disclosure of litigation funding.
In November, Connolly published a 105-page opinion outlining his plans to refer lawyers associated with Houston patent monetization firm IP Edge LLC to the Justice Department, U.S. Patent & Trademark Office, and state lawyer ethics officials.
Connolly accused the lawyers of violating professional conduct rules in a scheme involving 60 patent infringement suits in Delaware. IP Edge allegedly oversaw the litigation but used LLCs to conceal its involvement. This investigation has significant implications for the transparency and ethics of litigation finance.