More Attorneys Exploring Third-Party Litigation Funding | NY Law Journal
Ask Louis M. Solomon where his fees are coming from these days, and you will get a complicated answer.
Solomon, who joined Cadwalader, Wickersham & Taft earlier this year, counts corporations such as Bristol-Myers Squibb and PepsiCo as part of his book of business. Yet while companies like those still are generally paying his fees, lately the source of funds is not just his clients’ corporate war chests but money they received from investors looking to take stakes in the lawsuits he files for them.
Solomon, 54, is among a handful of corporate litigators handling commercial disputes with outside, third-party litigation funding. Two litigation funds have in the last three years launched initial public offerings, and both are on the lookout for U.S. litigants who would allow them to finance their cases in return for a portion of any settlement or judgment.
Juridica Investments Limited, which launched in 2007, last month reported that through March it had committed almost $123 million to 15 investments in 22 cases, one of which is in New York, according to a spokesman. Burford Capital Ltd., which went public in October, has so far invested $40 million across 10 cases, many of them international arbitrations.
But the practice of allowing outside investors into lawsuits is not without its critics. The U.S. Chamber of Commerce in October called for the prohibition of third-party litigation financing at all levels.
Selvyn Seidel, a former Latham & Watkins partner who is chairman of the investment advisor side of Burford, said the concern is understandable given the relative newness of the investment funds in the United States.
“The industry’s biggest enemy is unawareness,” he said. “And most of the lawyers in the U.S. are unaware of it.”
Third-party litigation funding is a relatively recent phenomenon in the United States, after establishing itself in Australia, then later in the United Kingdom. Until recently, in the United States it tended to focus on consumer disputes like personal injury claims, with advances of $1,750 to $4,500 in exchange for a percentage of the recovery, according to a Juridica-funded report by RAND Corporation released last month.
The newer phenomenon has been the emergence of investors like Juridica and Burford, which finance commercial claims brought by companies against other companies. While not alone in the field — Credit Suisse has a unit that invests in litigation — Juridica and Burford are two of the largest funds dedicated solely to litigation finance. Both are publicly traded on the Alternative Investment Market in the United Kingdom, where investors are likely more familiar with these types of funds.
Burford raised about $130 million in an October IPO and is looking to invest in commercial disputes. It plans to make average investments exceeding $3 million, and expects to have its capital fully committed by October 2011. Seidel declined to provide details on a suit in which Burford has invested.
via Law.com – More Attorneys Exploring Third-Party Litigation Funding.
More Attorneys Exploring Third-Party Litigation Funding | NY Law Journal
Ask Louis M. Solomon where his fees are coming from these days, and you will get a complicated answer.
Solomon, who joined Cadwalader, Wickersham & Taft earlier this year, counts corporations such as Bristol-Myers Squibb and PepsiCo as part of his book of business. Yet while companies like those still are generally paying his fees, lately the source of funds is not just his clients' corporate war chests but money they received from investors looking to take stakes in the lawsuits he files for them.
Solomon, 54, is among a handful of corporate litigators handling commercial disputes with outside, third-party litigation funding. Two litigation funds have in the last three years launched initial public offerings, and both are on the lookout for U.S. litigants who would allow them to finance their cases in return for a portion of any settlement or judgment.
Juridica Investments Limited, which launched in 2007, last month reported that through March it had committed almost $123 million to 15 investments in 22 cases, one of which is in New York, according to a spokesman. Burford Capital Ltd., which went public in October, has so far invested $40 million across 10 cases, many of them international arbitrations.
But the practice of allowing outside investors into lawsuits is not without its critics. The U.S. Chamber of Commerce in October called for the prohibition of third-party litigation financing at all levels.
Selvyn Seidel, a former Latham & Watkins partner who is chairman of the investment advisor side of Burford, said the concern is understandable given the relative newness of the investment funds in the United States.
“The industry’s biggest enemy is unawareness,” he said. “And most of the lawyers in the U.S. are unaware of it.”
Third-party litigation funding is a relatively recent phenomenon in the United States, after establishing itself in Australia, then later in the United Kingdom. Until recently, in the United States it tended to focus on consumer disputes like personal injury claims, with advances of $1,750 to $4,500 in exchange for a percentage of the recovery, according to a Juridica-funded report by RAND Corporation released last month.
The newer phenomenon has been the emergence of investors like Juridica and Burford, which finance commercial claims brought by companies against other companies. While not alone in the field — Credit Suisse has a unit that invests in litigation — Juridica and Burford are two of the largest funds dedicated solely to litigation finance. Both are publicly traded on the Alternative Investment Market in the United Kingdom, where investors are likely more familiar with these types of funds.
Burford raised about $130 million in an October IPO and is looking to invest in commercial disputes. It plans to make average investments exceeding $3 million, and expects to have its capital fully committed by October 2011. Seidel declined to provide details on a suit in which Burford has invested.
via Law.com – More Attorneys Exploring Third-Party Litigation Funding.
Will Shanghai Overtake Hong Kong as World Financial Center?
A report by British law firm Eversheds claiming that Shanghai could overtake London as a world financial center in 10 years has led to a predictable round of hand-wringing from the British press, including the Financial Times, the BBC and the Telegraph.
But not all of Asia is gloating. Missing altogether from Eversheds’ report is the city that’s most worried about losing ground to Shanghai: Hong Kong.
Obviously, such surveys are to be taken with a grain of salt; after all, over a tenth of Eversheds’ respondents predicted Dubai would emerge as the world’s preeminent financial center in decade’s time.
And Hong Kong, a special administrative region of China with a separate local government and legal system, has been booming recently. So far this year, its exchange is leading the world in initial public offerings, mostly on behalf of mainland Chinese companies. It remains the preferred regional base for global banks and, consequently, international law firms.
Still, Hong Kong has long had a complex about Shanghai, which was the region’s preeminent financial center before falling under communist rule in 1949. Now that that same communist government has embraced capitalism, fears abound that Shanghai will be promoted at Hong Kong’s expense.
That anxiety was reflected in a Reuters article last week, in which one Hong Kong banker fretted that his city would become a second city — a Boston or a Chicago to Shanghai’s New York.
via Will Shanghai Overtake Hong Kong as World Financial Center?.
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