3 Questions For A Litigation Finance Chronicler (Part I)

Litigation finance’s progression toward acceptance as a mature asset class continues apace.

There is no lack of attention on developments in the litigation finance space, just as there is no lack of developments in the litigation finance space to pay attention to. Whether it is Reuters’ coverage from early September of an interesting funder/law firm collaboration or a Bloomberg Law article about the closing of yet another big-dollar fund by one of the industry’s more prominent pure-play funders, litigation finance news abounds. Add in the occasional discussion of industry developments by the likes of the Financial Times and it is clear that litigation finance’s progression toward acceptance as a mature asset class continues apace. At the same time, there is always room for consistent, focused, industry-specific coverage in any business area, so it is also heartening to see that a new weekly newsletter promising to make sure that readers are “caught up on all that is happening in the litigation finance market” has started to make inroads as a dedicated source of litigation finance news.

Started by a Canadian chartered accountant with deep experience in coverage of the insolvency area, Litigation Finance Insider (LFI) is a new online publication dedicated to the litigation finance market. Led by editor Henry Louis, the LFI team writes about new cases being funded, industry trends and insights, as well as analysis of funder performance and firm news. Henry launched the publication earlier this year with the goal of giving legal professionals, investors, and other interested individuals an inside look at this fast-growing corner of the legal space. I first spoke to Henry over the summer and have since found LFI a worthy weekly read, containing as it does both a recap of litigation finance-related news as well as a healthy set of job listings for those looking to get into the litigation finance game. In short, LFI already does a nice job of providing a timely look at the state of play in the litigation finance industry, and I have every expectation that Henry and the LFI team will mirror the growth of litigation finance in terms of the scale and quality of their content going forward.

In light of the above, I am very pleased to share with this audience a written interview I did with Henry, who was gracious enough to agree despite his busy schedule around the LF Dealmakers Forum that I teased on these pages. Between dedicated industry coverage sources like LFI and industry-focused conferences like LF Dealmakers, there is no doubt that the litigation finance train continues to barrel along the tracks — and thus continues to command the attention of IP litigators and their clients, as I imagine it will for a long time to come.

Now to the interview. As usual, I have added some brief commentary to Henry’s answer below but have otherwise presented his answer to my first question as he provided it.

Gaston Kroub: Where do you see the litigation funding industry heading over the next few years?

Henry Louis: The litigation finance industry in the United States has grown tremendously in the last fifteen years and will without question become an even bigger part of the litigation landscape in the future.

The influx of capital into the space and the increasing levels of sophistication of the industry will create more options for plaintiffs looking for case funding. New funders will emerge that will be dedicated to specific niches, such as insolvency or construction or intellectual property, or are focused on a specific investment type, such as the enforcement of awards.

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I think we’ll also start to see law firms offering their own funding solutions to clients, either on their own or in partnership with litigation funders. We’re already starting to see this — in June, Longford Capital announced that they had entered into a $50 million funding agreement with the Chicago office of international law firm Willkie Farr & Gallagher LLP.

With the rise of funding options will come the challenge of picking the right solution and the right terms for a funding deal — for this reason I see the role of litigation finance brokers and advisors growing in importance in the coming years.

Regulation is also something that the industry will also have to grapple with, as any new and fast growing industry does. The current hot topic in the U.S. right now are rules around disclosure. Earlier this year, the State of New Jersey joined a few other U.S. jurisdictions in requiring disclosure of third-party funding information. Whether other states will follow suit and what impact this will have on funding levels and litigation tactics remains to be seen.

GK: As someone who shares Henry’s bullish views on the prospects for the litigation finance industry, it is hard to take issue with any of his predictions. I agree that we are likely to see additional launches of litigation funding firms, as sophisticated investors continue to realize the potential for significant returns in the space. And with the rise of a greater variety of funding options, the role of brokers will surely increase, just as more law firms will find themselves drawn to forming deeper relationships with existing funders. I fully expect LFI to keep us abreast of any developments on those fronts, as well as with regard to regulatory issues as they arise.

Next week, we will hear from Henry about why he thinks learning about litigation finance is an important step for U.S. law firms as well as his thoughts on what critical misconception around litigation finance calls out for correction. In the interim, you can sign up for LFI’s free weekly emails here.

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Please feel free to send comments or questions to me at gkroub@kskiplaw.com or via Twitter: @gkroub. Any topic suggestions or thoughts are most welcome.


Gaston Kroub lives in Brooklyn and is a founding partner of Kroub, Silbersher & Kolmykov PLLC, an intellectual property litigation boutique, and Markman Advisors LLC, a leading consultancy on patent issues for the investment community. Gaston’s practice focuses on intellectual property litigation and related counseling, with a strong focus on patent matters. You can reach him at gkroub@kskiplaw.com or follow him on Twitter: @gkroub.