Litigation funds finance large disputes between companies against a hefty slice and take on all litigation costs. In Finland, the project will be launched by DLA Piper’s lawyer Jussi Savonen.
Finland DLA Piper, one of the largest law firms, introduced a new type of dispute financing model last August.
It allows the client to pay the costs of their dispute over a claim of more than EUR 5 million to an external investment fund.
The mutual fund pays the legal costs and typically pays between 20% and 40% of the compensation won. If the case is lost, the fund will pay the costs.
“Typical cases are over EUR 20 million cases without a ceiling”, DLA Piper’s Director of the Finnish Dispute Resolution Team, Attorney Jussi Savonen reports on litigation funded by the funds in Europe and around the world.
There are no case studies in Finland yet.
According to Savonen’s information, dispute investors have contacted Finnish law firms in the last couple of years.
According to lawyer Jussi Savonen, the use of artificial intelligence is clearly increasing in the decision-making of litigation funds and the experts used by it.
Mutual funds began buying disputes over their investment portfolios in the 1990s. It is known that the first pioneers in the field came from Australia, from where the idea spread to Britain with larger players in the 21st century.
In the United States, trading in dispute financing is often commonplace, especially in class actions.
The international law firm DLA Piper has entered into its own co-operation agreement with Litigation Capital Management (LCM), a listed fund in London, and its partner Aldersgate Funding.
Aldersgate, for example, experts are contemplating the possibility of winning the dispute, the parties and the counterparty’s ability to pay. In addition, they evaluate whether the decision is enforceable in the country where the counterparty money is, Savona says.
Aldersgate also analyzes precedents, jurisdiction and strategy.
“All this requires a long line of expertise,” says Savonen.
Streaming channel On HBO rotating The Good Fight There is a recurring scene in the series of laws in which two litigation investment experts sit down with law firm shareholders to discuss whether a case can be pursued.
These nerds tap their laptops and then tell the algorithm to decide who gets the right, i.e. whether there is funding for the lawsuit.
According to Savonen, the use of artificial intelligence is clearly increasing in the decision-making of litigation funds and the experts it uses.
Once enough information has been added to the expert databases on the outcome of similar disputes, the funders of the dispute will be able to decide, on the basis of the indicators they receive, whether it is worthwhile to start financing the dispute.
Dispute investors start from their calculations that the case should be won with a probability of more than 60 percent. Compensation for a dispute must also be at least ten times the legal costs, Savonen says.
the payment risk of a lost story counterparty’s legal costs, investors sell off the insurance companies. The cost of insurance is often in the order of about one percentage point of the amount in dispute.
Savonen thinks that in Finland, litigation costs paid by dispute financiers could be best suited to companies that do not want to invest millions of euros in litigation costs in a dispute where there is uncertainty about the court’s decision.
“When a dispute does not pay the claimant and the investor suffers if the case is lost,” Savonen explains.
Savonen says that the return on dispute investment does not keep pace with the rise in share prices.
Stateside top attorneys with a large pool of assistants often collect huge fees based on percentages of damages, especially in class actions and damages cases.
According to Savonen, the practice in litigation and arbitration proceedings paid by dispute investors in Finland will be more moderate already due to the ethical rules of Finnish lawyers.
He says the DLA Piper law firm has agreed with LCM and Aldersgate that the work will be done 30 percent below list prices.
If the case is won, the agency may charge the full price and may receive a small bonus based on the amount won.
Savosen The group is currently representing the City of Helsinki Transport Authority (HKL) in the metro dispute between Siemens and HKL in the Helsinki District Court. It is potentially a dispute over compensation of more than EUR 200 million.
Savonen admits that the case would be an excellent target for a disputed investor, but he reminds that public spending often places restrictions on how disputed investors can be used.
“There are also clear reasons why the matter is being heard in public in the Helsinki District Court and not among the arbitrators.”
In principle, the public body must act as openly and transparently as possible in order for democracy to take place.
Ten Over the past year, litigation costs in Finland have even doubled or tripled.
According to Savonen, the income of dispute investors can contribute to changing the way justice is conducted.
“Rarely does anything interesting happen in our business. This is now, ”Savonen estimates.
“Especially useless stuff is not run because the dispute investor does not want losses.”
Savonen thinks that the use of disputed investors and artificial intelligence may also affect the fact that things are more easily agreed after the disputed investor has assessed the case and concluded in his preliminary calculations that the risk is worth taking.
“It can start opposing the weight väpättämään.”
Investors dispute investment may also be of interest because it is not dependent on stock and interest rate developments.
On the contrary, with the onset of the recession, there may be even more disputes during the boom.
DLA Piper and Dispute Investors
■ DLA Piper is an international law firm that is among the top three law firms depending on the method of calculation. It employs about 5,000 lawyers.
■ In Finland, DLA Piper has 60 employees, 45 of whom are lawyers. Its turnover is about 15 million euros.
■ Founded in 1998 in Australia, Litigation Capital Management (LCM) classifies itself as an alternative asset management company specializing in litigation financing. LCM was listed on the AIM Marketplace in London in 2018. LCM finances individual disputes, maintains portfolio investments consisting of litigation, and acquires individual litigation, typically related to insolvency.
■ Major litigation investors include Burford Capital Limited, listed on both the London and New York stock exchanges, and Omni Bridgeway, Australia.
■ Among other major players in the market, APEX, for example, utilizes artificial intelligence tools in initial risk assessment. In addition, new types of players have entered the market, such as the Silicon Valley algorithm-based startup called Legalist, which raised $ 100 million in its second round of funding in 2019.
.
source https://pledgetimes.com/investing-artificial-intelligence-decides-which-lawsuits-to-pursue-dispute-investors-also-arrived-in-finland-and-the-costs-of-the-dispute-can-now-be-sold-to-the-fund-for-a-hefty-slice/
Disqus comments