Third party funding of international arbitration disputes has been a hot topic for some time, and more and more we see its globalization take hold. Third party funding and international arbitration are a natural fit because of the great risks, high costs, and large amounts at stake in international arbitration disputes. Third party funding allows those costs and risks to be mitigated by the funder in exchange for a share of the potential award. In the past year, we have seen a noticeable uptick in the number of claimants seeking funding for international arbitration claims. (Lake Whillans funds U.S and Canadian litigation as well as domestic and international arbitration).Read More
The results reflect the growing norm of litigation funding. Forty percent of respondents have had firsthand experience working with a litigation finance firm. Interestingly, law firms with the most experience using litigation finance were the very largest and very smallest firms surveyed: law firm size of 500+ lawyers (48.57%) and law firm size of 2 – 5 lawyers (58.54%). Litigators whose practice concerns the energy industry had the highest proportion of firsthand experience followed by the technology sector; finance/banking had the lowest. A resounding 85% of those with firsthand litigation finance experience would use it again.
For those without firsthand experience, the most commonly cited reason for ruling out the possibility of litigation finance by nearly 75% of negative respondents was “ethical reservations.” We’d like to address those reservations with a primer on the ethics of litigation finance.Read More
Recently, the race in Asia has led Hong Kong and Singapore to introduce legislation that would enable the use of third-party funding in arbitrations seated there. Lake Whillans funds litigation and arbitration globally, and we asked Nicholas Lingard, Robert Kirkness and Emily Stennett of Freshfields Bruckhaus Deringer’s international arbitration practice in Asia to detail the recent developments in Hong Kong and Singapore.Read More
The High Court decided an appeal brought by Essar Oilfield Services, which challenged an award granted in an ICC arbitration to Norscot Rig Management, in which the arbitrator directed Essar to pay not only Norscot’s damages and attorneys’ fees, but also Norscot’s costs of litigation financing. In the dispute between the two oil and gas companies, Norscot used financing to pay for its £647,000 in attorneys’ fees, and, as a result of the successful arbitration, Norscot was obligated to the funder for the greater of three-times that amount or 35% of the damages award. (The amount of the damage award has not been reported.) Essar challenged the arbitrator’s authority to award the litigation finance costs in the High Court.Read More
In mature industries, there is usually a set of rules outlining best practices for individuals and organizations. In newly developing industries, however, best practices are less clear, and once established spread more slowly. In order to promote the development of best practices in litigation finance, we recently identified key aspects of a funding arrangement that we believe will lead to the best results for a claimholder. Companies considering a litigation financing offer should consider the following principles and their importance:Read More
Last week, the Delaware Superior Court held that a litigation finance arrangement does not run afoul of the medieval doctrines prohibiting champerty and maintenance. These laws, which were originated by medieval kings who were annoyed by vexatious litigation of feudal lords, are still recognized in Delaware though their application has been very much limited.Read More
This post was contributed by Bill Patterson; he was the general counsel of Business Logic where he oversaw a “bet-the-company” litigation. He now manages complex litigation at Swanson, Martin & Bell. You can contact Bill at firstname.lastname@example.org.
Litigation finance is here to stay. Having worked as outside counsel, in-house and now as outside counsel again, I can confidently make that statement. There are three fundamental ways litigation finance changes your job, whether you’re inside or out.Read More
I recently had the pleasure of participating in a panel discussion on litigation finance hosted by the Association of Business Trial Lawyers in Ojai, California. The audience was engaged and asked a variety of questions, including many on ethical considerations related to litigation finance. Since this topic seems to be top of mind for lawyers when it comes to litigation finance, we offer the following sample Q&A:Read More
Interesting article from The Hill discussing litigation finance in the context of the World Justice Project placing the U.S. 65th in its ranking of affordability and accessibility to its legal system.Read More
The Delaware Chancery Court handed down a favorable decision on work product protection for funding documents last week. Here are links to an article discussing the decision and the decision itself.