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Category: Litigation Funding

Judge Overseeing Concussion Settlement Invalidates Litigation Funding Agreements with NFL Players

Judge Overseeing Concussion Settlement Invalidates Litigation Funding Agreements with NFL Players

A federal judge ruled last week that litigation funding agreements with National Football League players who are seeking to recover under the NFL’s concussion settlement agreement. In a sweeping ruling, U.S. District Court Judge Anita Broady held that the anti-assignment provision in the settlement agreement precluded the agreements where by the players sold their right to receive future settlement payments in order to receive more immediate sums from the litigation funders. The high-profile concussion settlement involves former NFL players who settled…

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Will NFL ‘Feeding Frenzy’ Lead to ‘Watershed’ Moment – and Greater Disclosure – for Litigation Funding?

Will NFL ‘Feeding Frenzy’ Lead to ‘Watershed’ Moment – and Greater Disclosure – for Litigation Funding?

The news in July was that litigation funding companies were engaging in a “feeding frenzy” of agreements with former National Football League players who could be among the nearly 5,000 NFL veterans entitled to a share of the $1 billion concussion claims settlement. The latest news reports two new twists: that the agreements are being challenged en masse, in ways that involve some unusual procedural means, and that a lead attorney in the concussion lawsuit – who has voiced criticisms of…

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Federal Court in Florida Says Putative Class Action Challenging Litigation Funding Practices Should Be In Illinois State Court

Federal Court in Florida Says Putative Class Action Challenging Litigation Funding Practices Should Be In Illinois State Court

A putative class action filed against a litigation funding company – claiming that the company violated usury, lending practices, and other laws – has been dismissed as filed in the wrong forum, although the plaintiff may seek to proceed in another jurisdiction. In Smith v. Oasis Legal Fin., LLC, Case No. 8:17-cv-2163-T-33JSS, 2017 U.S. Dist. LEXIS 180081 (M.D. Fla. Oct. 31, 2017), the court dismissed the case under the doctrine of forum non conveniens, adding that because the court decided “that the case…

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Finding Violation of New York’s Champerty Laws, Federal Court Dismisses Fair Debt Collection Practices Act Lawsuit

Finding Violation of New York’s Champerty Laws, Federal Court Dismisses Fair Debt Collection Practices Act Lawsuit

Agreements among a credit repair organization, a law firm, and a New York woman were unenforceable or otherwise ran afoul of the law, a federal court ruled this week.  The reasons?  The credit repair organizations agreement with the woman violated a federal statute, and an agreement with the law firm violated New York’s champerty laws and other rules, the court said. Judge Robert W. Sweet, of the U.S. District Court for the Southern District of New York, issued the July 17…

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New York Times: ‘High-Risk’ Viaticals May Have Contributed to Debt Problems for Virgin Islands

New York Times: ‘High-Risk’ Viaticals May Have Contributed to Debt Problems for Virgin Islands

The pension system for the Virgin Islands has been “chasing high returns by investing in high-risk assets, like a $50 million placement in life viaticals — an insurance play that is, in effect, a bet that a selected group of elderly people will die soon.” That is a line from an article with the headline After Puerto Rico’s Debt Crisis, Worries Shift To Virgin Islands, available here.  

Litigation Funding Rule Change May Take A While

Litigation Funding Rule Change May Take A While

Don’t hold your breath. That’s one way to summarize the National Law Journal’s summary of the U.S. Chamber of Commerce’s long-term plan to try to rein-in litigation funding via a change to the Federal Rules of Civil Procedure. The piece, entitled Lit Funding Opponents Play Long Game in Bid for Transparency, points out that the federal rules change process is designed to take more than two years – at least. The article is available in full here.  Another recent Secondary…

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A Primer on Champerty and Lawsuit Funding – and Impact on Insurers – Is Part of Report On U.S. Chamber’s Support for Federal Rule Change

A Primer on Champerty and Lawsuit Funding – and Impact on Insurers – Is Part of Report On U.S. Chamber’s Support for Federal Rule Change

What’s champerty?  How does it relate to litigation funding? And why should it matter to the insurance industry? These are a few questions addressed this month in a short but pithy piece in the National Law Review, “U.S. Chamber Seeks New Federal Rule Requiring Disclosure Of Third-Party Litigation Funding Arrangements” (available here). As for the answers: (1) champerty is “an agreement between an officious intermeddler in a lawsuit and a litigation by which the intermeddler helps pursue the litigant’s claim…

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Forbes Reports That Litigation Finance Company Faces Lawsuit By Former Customers Over Allegations of Too-High Interest Rates

Forbes Reports That Litigation Finance Company Faces Lawsuit By Former Customers Over Allegations of Too-High Interest Rates

  Forbes this month reports that a litigation finance company has been sued by former customers, who have alleged that the company charged usurious interest rates.  Says reported John O’Brien in the May 9 article, Customers Sue Legal Finance Company, Allege Interest Rates Over 100%: Six individuals who did business with Oasis [Legal Finance] are suing the company in Georgia, asking for a federal judge to declare the interest rates charged by the company in violation of the lending laws of…

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Commentary: Litigation Funding Arrangements May Open Doors for Defense Teams to Use Targeted ‘Strategic Discovery’ in Litigation

Commentary: Litigation Funding Arrangements May Open Doors for Defense Teams to Use Targeted ‘Strategic Discovery’ in Litigation

In an employment law blog post, a labor litigator says that litigation funding may create opportunities for employer-defendants to use “strategic discovery” in the litigation strategies.  Among the suggestions: A defendant “may request that the Case Management Order require the plaintiff to disclose any third-party litigation funding” as per Federal Rule of Civil Procedure 26(f)(3)(F). If a litigation funding arrangement is uncovered, the defendant could leverage that fact “to reduce litigation costs and gain strategic advantages” based on, among other things,…

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Minnesota Court of Appeals Says State’s Strong Policy Against Champerty Means Litigation Funder Can’t Enforce Forum Selection Clause or Compel Parallel Lawsuit to Proceed in New York

Minnesota Court of Appeals Says State’s Strong Policy Against Champerty Means Litigation Funder Can’t Enforce Forum Selection Clause or Compel Parallel Lawsuit to Proceed in New York

The principles at stake in Maslowski v. Prospect Funding, 890 N.W.2d 756, 2017 Minn. App. LEXIS 26 (Minn. App. Ct. Feb. 13, 2017), can be summed up as follows: A trial court does not abuse its discretion to refuse to enforce a contractual forum-selection clause where the court’s refusal was based on protecting Minnesota’s local interest against champerty; and A trial court does not abuse its discretion by issuing an anti-suit injunction enjoining a litigation funding company from prosecuting a lawsuit…

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