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Harrison (Buzz) Frahn, Simpson Thacher Chris Mammen, Hogan Lovells Advanced Patent Law Institute Litigation Funding Featured image from Hogan Lovells 2018 Capture Photography Competition
Working definitionIsn’t this just “Patent Trolls 2.0”?Doesn’t litigation funding raise champerty problems?Why use litigation funding? Law firmsClientsWhat is Litigation Funding?
Hogan Lovells | 3 What’s in it for the funders? https:// www.bloomberg.com/news/articles/2018-08-27/for-the-world-s-super-rich-litigation-funding-is-the-new-black
Hogan Lovells | 4 IMF Bentham: Average investment in 19 cases in 2015 was $3.5 millionBurford: $414 million “actively deployed,” average investment in 2013 was $3 million, in 2017 was $24 millionGerchen Keller: $1.4 billion under management, 50 active investments, averaging $10.8 million. Acquired by Burford in Dec. 2016, has raised an additional $1.75 billionLongford: Initially raised $56.5 million in 2014, invested in 11 “portfolios”; second fund closed in 2017 with $500 million Parabellum: Raised at least $200 million Other funds: Between 12/16 and 6/18, eight different funds each raised more than $100 millionHow Big Is This? https://www.law.com/americanlawyer/almID/1202745122975/The-Big-Players-in-the-Litigation-Funding- / https://www.law.com/americanlawyer/2018/06/28/litigation-funders-face-their-hardest-sell-big-law /
Hogan Lovells | 5 Chambers now Ranks Litigation Funders
Hogan Lovells | 6 Is this just a plaintiff-side tool?How would defense-side litigation funding work?How does it compare with Contingent-feesIndemnityInsuranceWhat do you fund?Single case?Portfolio of cases? Same client / mix of clientsAdvantagesLaw firms: manage fee risk Clients: offload risk, smooth litigation spends, cash source Litigation Funding in IP Litigation
Hogan Lovells | 7 PrivilegeDuring due diligenceDuring litigation Settlement authorityAnalogous questions to insurance, indemnityWho is the contracting party?Litigation counselParty-clientBoth Single-case or portfolio?When, in the life of the litigation, do you seek investment? Things to Watch For When Doing a Deal
Hogan Lovells | 8 Clearly an established asset/investment classEthical risksPrivilege NYC Bar Ass’n finding (under review) that a strict reading of ethical rule on prohibition against sharing fees with non-lawyers would prohibit litigation fundingNote: even if that is not revised, deal structures may exist to avoid the finding Discovery/disclosure obligationsND Cal local rules considered Fed. R. Civ. P. Ordinary discoveryhttps://www.skadden.com/insights/publications/2017/04/thirdparty-litigation-financing-mandatory-discl What’s Around the Corner?
Harrison Buzz Frahn Simpson Thacher Chris Mammen Hogan Lovells Advanced Patent Law Institute Litigation Funding Featured image from Hogan Lovells 2018 Capture Photography Competition Working definition ID: 764442 Download Presentation