The Law and Business of Litigation Finance

How do litigation funders raise capital and how do they spend it? What are their corporate and financial structures? What types of cases do they invest in and what are their returns? What contractual structures do they use? What are the key legal issues relating to litigation funding? The Law and Business of Litigation Finance answers these questions and is an essential guide for those who seek to provide litigation funding, as well as for anyone who wishes to understand the litigation funding process. The Second Edition includes: - New content covering the commercial and finance aspects of litigation finance, examining the different stakeholders, what they seek to achieve, and the risks and rewards that attract them - Increased coverage of the position in Australia, continental Europe and jurisdictions such as Singapore and Hong Kong - Updated case law including recent high profile cases in the UK, USA and Australia, and a comprehensive record of relevant legislation and regulations in those jurisdictions Edited by one of the most accomplished litigation innovators in the international market with contributions from leading experts, this is a must-have guide for all lawyers, commercial court judges, legal policy makers, regulators, investors, and academics in these jurisdictions. This title is included in Bloomsbury Professional's Practice and Procedure online service. Forewords General editor Contributors Table of UK Statutes Table of UK Statutory Instruments Table of Australian Legislation Table of US Legislation Table of other International Legislation Table of UK Cases Table of Australian Cases Table of US Cases Table of other International Cases Chapter 1 Introduction Litigation finance, often known as litigation funding Trans-Atlantic evolution The law Business Multi-contributor Chapter 2 A brief history of third-party litigation funding in the UK, US and elsewhere in the common law Introduction TPLF and assignment The modern history of TPLF in the UK and Ireland The modern history of TPLF in the United States Conclusion Chapter 3 Regulation and legislation A England Introduction Statutory regulation PACCAR The ALF Code of Conduct Final thoughts on the position in England B The United States Introduction The US position – federal regulation The US position – state legislation C Australia, Hong Kong, Singapore and global The Australian position The Hong Kong position The Singapore position The global position Chapter 4 Third-party litigation financing and lawyers’ ethical obligations Introduction Choice of law The United States England and Wales Conclusion Chapter 5 Privilege and confidentiality Introduction English law Application to third-party litigation funding under English law US law Application to third-party litigation funding under the laws of the United States International arbitration Chapter 6 The litigation funding agreement Introduction Key stakeholders in the LFA Key characteristics of the LFA Key clauses in the LFA Miscellaneous provisions The closing Expert advice required Law firm funding agreements Conclusion Chapter 7 Adverse costs and security for costs Introduction Adverse costs in England and Wales English case law from the 1980s and 1990s The ‘purity test’ developed by the English courts in Dymocks and Hamilton v Al Fayed The Australian case of Gore v Justice Corp foreshadows Arkin Arkin Excalibur Courts refusing to apply the Arkin cap Litigation funder’s liability for adverse costs in the Australian securities class action regime Security for costs in England and Wales Security for costs from law firm funders ATE as security for costs Adverse costs in international arbitration: institutional rules Security for costs in litigation that follows on from arbitration Investor v State arbitration Commercial arbitration Conclusions Chapter 8 Other methods of financing litigation A State funding England and Wales United States Contingent litigation funds B Pro bono, philanthropic, charitable and ‘revenge’ funding Pro bono Philanthropic and charitable funding ‘Revenge’ funding C Insurance BTE insurance ATE insurance Other uses of insurance D Contingency and conditional fee agreements Introduction Conditional fee agreements in England and Wales Damages-based agreements in England and Wales Conditional and contingent fee arrangements in other jurisdictions Conditional and contingent fee agreements and the funding market Chapter 9 Types of litigation and arbitration that attract and are attractive to litigation finance A Patent litigation What is patent infringement litigation? Patent litigation is highly amenable to funding Key funding-related issues in US patent cases Patent litigation strategies especially amenable to litigation funding B Insolvency Evolution of funding insolvency matters Key considerations for insolvency practitioners Availability of legal expenses insurance Creditor financial support Other forms of external finance Assignment options Other considerations: contingent fees and ATE insurance C Investor–State and Treaty arbitration Introduction Investors’ recovery routes Types of claim arising under investment treaties Governance rules The parties Value Costs Issues for litigation funders to consider A sector to watch – energy and the environment Potential impacts of the Russia-Ukraine Conflict in investor–State arbitration Concluding thoughts D Class actions Opt-out class actions Opt-in class actions Conclusion and the future Chapter 10 The investors in litigation finance Litigation finance as an asset class Investment structures Types of investors in litigation finance Chapter 11 High risk, high return Introduction Key risks Big losses Risk assessment and risk management High returns Big wins Conclusion Chapter 12 Tax The devil is in the detail UK tax considerations US tax considerations Index