Insurers at War and Argentine Text Messages: Litigation Finance

Happy Friday! This week I wrote about a split in the insurance industry over litigation funding.

Some US insurance companies are attacking the industry while others are servicing the sector.

During my time covering this space, I noticed that the many litigation finance conferences I attend often include insurance brokerage firms as sponsors. There are often panels about insurance and how it can be utilized in funding deals. I’ve also written about how litigation funders have jumped ship and moved over to work for these brokerage firms.

Yet insurance carriers have become some of the industry’s most vocal opponents. Can’t we all just get along?

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Nationwide, Liberty Mutual, and Sentry are among the insurers who lobbied on the litigation finance tax bill that would’ve added a 40% tax on funder profits. After the bill stalled, the leaders of Chubb and Marsh McLennan publicly pledged in the Wall Street Journal to continue fighting for regulation.

Meanwhile, insurance brokerage firms like Marsh McLennan, Lockton, Willis Towers Watson, and Alliant offer litigants and law firms contingent risk insurance. These policies underwrite case dockets and can be used as collateral for litigation funding, oftentimes leading to cheaper capital. Some insurers will also underwrite funders’ investments.

In any event, the movement in Congress to do something about litigation finance hasn’t completely stopped. Last week, I tuned into a House judiciary subcommittee hearing that examined China’s use of US courts. Rep. Darrell Issa (R-Calif.), chair of the subcommittee, is pressing for legislation that discloses litigation finance in civil matters.

Emily de La Bruyere, co-founder of consulting firm Horizon Advisory, said the Chinese government was financing IP cases and could obtain sensitive information on US companies during discovery. Bloomberg Law reported in 2023 how a Chinese litigation funder financed four intellectual property lawsuits in US courts.

Funding announcement

Uncorrelated Capital, a new alternative asset investment firm, announced Thursday that it closed on $53 million in funding from an unnamed private credit fund and a plaintiff law firm. Uncorrelated is focused on litigation finance and other investment strategies. It’s deployed tens of millions into legal claims including claims of toxic water causing cancer at marine base Camp Lejeune, according to a press release.

“Litigation finance is one of the most exciting asset classes in the world,” founder Miles Cole said. “We align incentives by investing alongside law firms as partners, rather than lending to them, to drive better outcomes for plaintiffs.”

What I’m reading

My colleague Bob Van Voris had some updates on the endlessly interesting case backed by Burford Capital against Argentina, in which shareholders are trying to collect on a $16 billion court judgment. On Tuesday, US Judge Loretta Preska ordered Argentina’s top officials — including its Economy Minister — to turn over Gmail, WhatsApp and Signal messages to former YPF SA shareholders. On Wednesday, a lawyer representing the shareholders told Preska that they’re on a “treasure hunt” for gold bars that Argentina’s central bank secretly sent abroad. Argentina called it a “wild goose chase.”

Litigation funder and former lawyer at the Department of Government Efficiency James Burnham launched a new artificial intelligence policy council this week according to the New York Post. Burnham held a senior position at DOGE during Trump’s first term. He is also the president and founder of Vallecito Capital, a fund that backs cases supporting the conservative policy mission.

Listen here! Robyn Kazatsky, a partner at Lock Gordon Law Group, joined Talking Transports podcast and discussed litigation funding and how the trucking industry faces rising expense from large jury awards.

Also in the News

Haynes Boone Adds Business Litigators to Growing New York Office

Gabriel Berg and Lauren Coppola joined Haynes Boone as litigation partners in its New York office, the firm announced Tuesday.

Womble Bond Dickinson Onboards Business Litigator in Houston

Robert N. Hancock Jr joined Womble Bond Dickinson as a partner in its business litigation practice group in Houston, the firm announced today.

Dorsey & Whitney Adds Three-Partner Litigation Team From Cozen

A group of four New York litigators jumped to Dorsey & Whitney from Cozen O’Connor, their new firm said Monday.

Commentary and Opinion

Allowing ‘Settled Expectations’ in Patent Cases Harms Innovation

Former US Rep. Bob Goodlatte and ex-House Judiciary counsel Paul Taylor say a new US Patent and Trademark doctrine has led to questionable rejections of patent validity challenges.