Litigation Finance: Structuring Third-Party Funding of High Cost Claims

Underwriting, Investment Terms, Documentation, Conflict of Interest and Disclosure Issues

Recording of a 90-minute CLE webinar with Q&A


Conducted on Tuesday, April 17, 2018

Recorded event now available

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Program Materials

This CLE webinar will examine the options available to litigators to finance litigation costs and how third-party investors underwrite and structure funding arrangements. The panel will also discuss issues associated with third-party involvement, including undue influence, conflicts of interest and disclosure, and how the courts have addressed these issues.

Description

Litigation finance refers to the third-party funding of legal costs in exchange for a financial interest in the outcome of a legal claim. The market is expanding rapidly, both in terms of funding sources and types of suits financed. Repayment is typically contingent upon a successful outcome, so lenders underwrite each proposed claim and assess the likelihood of payment and a return commensurate with the risk.

Parties tailor litigation financing terms to each transaction. Financing may be a fixed amount or tied to other benchmarks such as legal fees and expenses incurred. Pricing may be based on the amount of capital provided, on the size of the recovery in the underlying claim, or some combination. Capital may be available in a lump sum or may be drawn down over time. The parties must determine how proceeds will be split among the claimant, counsel and investor if a claim is successful.

The lawyer’s first responsibility is to render services solely to their client and must avoid any professional obligation to the financing provider. There also may be a duty to disclose third-party involvement in the case.

Listen as our authoritative panel discusses the mechanics of structuring litigation finance transactions. The presenters will also discuss recent case law which addresses the conflicts of interest, duty to disclose and other issues associated with litigation finance.

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Outline

  1. Reasons for financing legal costs—expensive claims, limited resources
  2. Underwriting the claim—what funders need to know
  3. Deal terms
    1. Amount and pricing
    2. Disbursement procedures
    3. Contingencies for repayment
    4. Distributions of proceeds among claimant, counsel and investor
  4. Issues with third-party involvement—conflict of interest, state champerty laws, disclosure
  5. Recent case law regarding litigation finance

Benefits

The panel will review these and other crucial issues:

  • What kinds of claims are appropriate for financing and how does the funding source underwrite a claim?
  • What are the critical terms of a litigation financing arrangement?
  • What are some of the issues inherent in a third party having a financial interest in litigation?

Faculty

Batson, James
James Batson

Investment Manager, Legal Counsel
Bentham Capital

Mr. Batson has significant experience in the litigation funding industry. He formerly held roles as Chief Operating...  |  Read More

Drucker, Lee
Lee Drucker

Founder
Lake Whillans Litigation Finance

Mr. Drucker provides experience in asset valuation and an understanding of claimholders' business needs. Prior to...  |  Read More

Weinstein, Boaz
Boaz Weinstein

Founder
Lake Whillans Litigation Finance

Prior to founding the firm, Mr. Weinstein was Director of Underwriting at BlackRobe Capital Partners. He previously was...  |  Read More

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