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The Minnesota Supreme Court recently struck down the state’s prohibition against third-party litigation funding. Experts with Validity Finance say the ruling sheds light on how courts and legislatures should approach the question of industry regulation. Reprinted from BloombergLaw. Article by Julia Gewolb and Joshua Libling Advocates of litigation finance have claimed victory for years. Gone, they assert, are questions about whether funding has a future in the U.S. Covid-19 is likely to accelerate the industry’s acceptance…
By Wendie Childress and William C. Marra When it comes to litigation, perhaps the only certainty is that the outcome is uncertain. There are many roads to defeat, and your fate rests with unpredictable and fallible humans: juries, judges, lawyers and witnesses. This is why claimholders and lawyers frequently share litigation risk with litigation funders. And it is why courts have held that usury laws do not prohibit litigation finance agreements. Usury laws apply only…
The District of Delaware is the most recent federal court to refuse to allow discovery into communications with litigation funders.  In a June 12, 2020 Memorandum and Order issued in United Access Technologies, LLC v. AT&T Corp., et al., Cause No. 1:11-cv-00338, U.S. District Court Judge Leonard P. Stark denied defendant AT&T’s motion to compel litigation funding-related discovery from plaintiff United Access Technologies (“UAT”) in the patent infringement suit.  The decision follows a trend…
By providing non-recourse funding for a variety of commercial claims, funding is a tool that can ease the financial burden for companies and law firms alike and provide a path forward for good claims to reach the courthouse. The Texas market is suffering a significant double blow because of the COVID-19 crisis and plunging energy industry. The institutions that form the backbone of our economy, including in health care and oil and gas, are seeing…
By Joshua Libling You are the general counsel, CFO, or even CEO of a business engaged in litigation, or with potential litigation you could bring. Budgets are tight, and your capital needs to be conserved. You have probably read enough articles about the “death of the billable hour” and the rise of alternative fee arrangements to fill a book. You have probably been pitched to by law firms that say they can be more efficient…
Overview, May 2020 David Kerstein and Wendie Childress, Validity Finance Reprinted with permission from Bloomberg Law Litigation Finance in Focus Litigation can be essential to corporate restructurings or liquidation proceedings. However, the capital available to claim holders in the context of a corporate bankruptcy has traditionally been limited, offered on unfavorable terms, or both. Litigation finance provides an alternative way for debtors, trustees, creditors and creditors’ committees to finance their claims. Litigation in Bankruptcy In corporate…
By Joshua Libling Litigation finance has always billed itself as a way of helping meritorious claims regardless of the economic strength of the litigant. The coronavirus pandemic is now exerting enormous and growing stress on law firms and clients. If ever there was a moment for litigation finance to live up to its own hype, this is it. We think it can. Keeping Plaintiff Cases Running at Reduced Cost.  Paying hourly fees to a law…
By now, the emerging consensus among courts is clear: Defendants generally may not obtain discovery of a plaintiff’s litigation funding arrangements. Many lawyers and litigants are familiar with the argument that funding documents are not discoverable because they are protected by the work product doctrine. But a recent decision by a federal district court in Nevada highlights that courts increasingly recognize that they need not even consider whether the work product doctrine applies because discovery…
March 12, 2020 The New York City Bar Association’s working group on litigation funding recently rejected some of the leading arguments against the commercial litigation finance industry. Validity Finance’s William C. Marra discusses the group’s two principal recommendations. A much-anticipated New York City Bar Association report provided a strong boost to the growing litigation finance industry, concluding that funding agreements between lawyers and funders will benefit litigants, and recommending that the legal ethics rules explicitly…