The last year has brought both highs and lows for the litigation finance industry, an increasingly significant area of interest for many of the top law firms and corporations across the globe. Here, we explore the five most crucial developments in this sector throughout 2023.
Firstly, the controversial Sysco Corp. case saw the corporation file a lawsuit against litigation funder Burford Capital. Sysco accused Burford of obstructing attempts to resolve several antitrust suits aimed at poultry processors and meatpackers. The dust finally settled when Sysco assigned its claims to an affiliate of Burford, Carina Ventures LLC, and removed itself from the docket jointly with Burford, thereby placing Carina as the real party in the interest. Learn more about the case here.
Second on the list of significant happenings was a massive victory for Burford, which could result in a 37,000% return on an investment involving claims against the Argentine government. However, the final decision hangs in limbo amidst appeal processes and a momentary delay enforced by an American federal judge.
Disclosure regulations also made headlines. Montana became the first state requiring lawyers to publicly announce their usage of litigation finance in civil cases. In Louisiana, similar legislation was vetoed, but renewed efforts are expected with the state’s incoming governor. Meanwhile, federal legislators introduced their own bills advocating for the same, though they will likely face pushback given the current divided congress. Noteworthy among these is the legislation introduced by Senator Joe Manchin (D-WV) and Senator John Kennedy (R-La) that would bar foreign entities from funding lawsuits in the USA.
Fourth on the list includes developments in the United Kingdom. Following a Supreme Court decision regarding a class action case involving truck-manufacturing company PACCAR, litigation finance agreements that predicate the funder’s recovery on a percentage of damages won in the claim are now deemed legally unenforceable. This decision caused a significant ripple effect, prompting many organizations to rewrite contracts with their clientele.
The last big shift came in the form of U.S. Federal Judge, Colm F. Connolly, who pledging transparency, published a standing order in 2023 to mandate the disclosure of litigation funding in his court cases. In particular, his strong stand against patent monetization firm, IP Edge LLC, is viewed by many as a significant step towards increased transparency and accountability in funded law proceedings.
These events only illustrate a snapshot of the consistently evolving landscape of litigation finance. Its role in the legal sphere is likely to continue to develop and expand, making it a key area to watch in the coming years.