This document provides an overview of a webinar on third parties involved in the litigation finance industry. It introduces the concept of litigation funding and notes that it allows parties to share litigation risks and rewards with investors. The webinar will discuss the different players in the litigation finance ecosystem, including litigation finance firms, brokers, experts, law firms and insurance brokers. It will explain how these third parties can assist clients and facilitate financing arrangements.

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4. Disclaimer
The material in this webinar is for informational purposes only. It should not be considered
legal, financial or other professional advice. You should consult with an attorney or other
appropriate professional to determine what may be best for your individual needs. While
Financial Poise™ takes reasonable steps to ensure that information it publishes is accurate,
Financial Poise™ makes no guaranty in this regard.
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5. Meet the Faculty
MODERATOR:
Marc Carmel – McDonald Hopkins LLC – Member Business Restructuring Services
Department and Co-Head Litigation Finance Group
PANELISTS:
Joel Cohen – Stout – Managing Director – Disputes, Compliance, & Investigations
Andrew Langhoff – Red Bridge Advisors – Founder & Principal
Andrew Mutter – CAC Specialty – Co-Lead of Contingent Risk Solutions – Senior Vice
President
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6. About This Webinar –
Third Parties Involved in the Litigation Finance
Industry
Litigation funding is an increasingly-popular tool for attorneys and parties with legal claims to
share the risk and reward of litigation or arbitration with third-party investors, and for investors
to capitalize on the uncorrelated returns generated by legal-driven revenue. While some
people know a little about the litigation finance industry, few have an in-depth understanding
of the industry, the different ways that litigation finance can benefit attorneys and their clients,
and the process of securing financing. This webinar focuses on the different aspects of the
commercial litigation finance industry, the different uses of litigation funding, different types of
investment structures and the documents used for litigation finance arrangements, and the
key provisions in the agreements.
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7. About This Series – Commercial Litigation Funding
2022
This webinar series discusses introductory through advanced topics in the field of litigation funding.
Once a fledgling industry predominantly used in the Commonwealth nations of the United Kingdom and Australia,
litigation funding has become a well-accepted and common practice throughout the World and especially in the United
States over the past ten years. As the industry has matured, there has been significant evolution in the types of litigation
finance investments that are available, the process for securing litigation funding, and the advisors involved in the
industry. This three-part series is geared towards educating attorneys and clients on legal/ethical, strategic, and business
decisions when considering litigation funding, and investors seeking to learn about an increasingly mainstream asset
class. Panelists include experts in the field of litigation funding, including investment managers at preeminent litigation
funders, advisors who assist litigators and attorneys who are interested in securing litigation funding and advisors who
are involved in the litigation funding industry.
Each Financial Poise Webinar is delivered in Plain English, understandable to investors, business owners, and
executives without much background in these areas, yet is of primary value to attorneys, accountants, and other
seasoned professionals. Each episode brings you into engaging, sometimes humorous, conversations designed to
entertain as it teaches. Each episode in the series is designed to be viewed independently of the other episodes so that
participants will enhance their knowledge of this area whether they attend one, some, or all episodes.
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8. Episodes in this Series
#1: Introduction to Commercial Litigation Finance
Premiere date: March 9, 2022
#2: Litigation Finance Market Process
Premiere date: April 6, 2022
#3: Third Parties Involved in the Litigation Finance Industry
Premiere date: May 11, 2022
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9. Episode #3
Third Parties Involved in the Litigation Finance Industry
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10. Litigation Finance or Litigation Funding: Definition
Litigation or legal funding is the “funding of litigation activities by entities other than the parties
themselves, their counsel, or other entities with a pre-existing contractual relationship with
one of the parties.”
Source: American Bar Association Commission on Ethics 20/20, “White Paper on Alternative
Litigation Finance”
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11. Relevant Parties Involved with Litigation Funding
Arrangements
• Parties with legal claims – individuals, companies, or fiduciaries
• Attorneys and law firms representing parties holding legal claims
• Litigation finance firms
• Brokers/ advisors and outside experts (including valuation experts; forensic, economic,
and industry consultants; insurers and law firms to negotiate and document arrangements)
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12. Different Types/ Segments of the Litigation Finance
Industry
• Commercial litigation
• Mass torts litigation
• Class actions litigation
• Consumer litigation
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13. Types of Cases that Commercial Litigation Funders
Finance
• Breach of contract
• Breach of fiduciary duty
• Insurance coverage
• Intellectual property – patents, copyright, trademark, trade secret
• Fraud
• Antitrust
• Class action opt out claims
• International arbitration (treaty or commercial)
• Judgement enforcement
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14. Types of Cases that Commercial Litigation Funders
Finance (cont’d)
• Personal injury
• Consumer Fraud
• Employment discrimination and other employment related litigation
• Malpractice
• Product liability
• Divorce
• Judgement enforcement
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15. A Few Other Ways to Use Litigation Finance
• Defense funding
• Intellectual property monetization
• Support environmental social governance (“ESG”) litigation
• Bankruptcy
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16. Characteristics of Cases that Are Attractive to
Litigation Funders
• Meritorious litigation
• Provable liability that funders are able to confirm
• Damages that are monetary and significant relative to amount to be funded
• Defendants with ability to satisfy judgment
• Counsel with successful track record
• Counsel with willingness to accept hybrid compensation model
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17. Different Types of Arrangements
• Single case financing – litigation funding to a party to a single dispute (litigation or arbitration)
• Corporate portfolio financing – litigation funding to a party to multiple disputes (litigation or
arbitration)
• Law firm portfolio financing – litigation funding to a law firm representing clients in multiple
disputes (litigation or arbitration)
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18. Process of Securing Litigation Funding
• Determination that litigation funding is a good fit for investment (often with the use of a
broker)
• Preparation of diligence information (including legal budget)
• Reach out to litigation funders
• Sign non-disclosure agreement
• Funder(s) performs initial due diligence
• Enter into term sheet with (single) funder
• Funder performs confirmatory due diligence
o At times, hire outside experts
• Negotiate and execute documentation for litigation funding
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19. Advisors and Other Third Parties Involved in the
Litigation Finance Industry
• Litigation finance advisors / brokers
• Insurance brokers
• Damages / valuation experts
• Law firms
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20. Benefits of Working with Advisors and Other Third
Parties with Litigation Finance Expertise
• Industry expertise (substance and process)
• Make process of securing financing more efficient
• Increase likelihood of closing transactions
• Find better fit
• Secure better economic and non-economic terms
• Avoid or minimize conflicts
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21. Advisors / Brokers in Litigation Finance Industry –
Generally
• Advisors / Brokers work to assist those seeking litigation finance
• Those seeking funding are often doing so for the first (and only) time
• The role of the Advisor / Broker is to assist in:
o Identifying appropriate funders (sources of capital)
o Positioning the financing opportunity for presentation to these funders
o Negotiating pricing and entering in to term sheet with a lead funder
o Assisting in final due diligence with such funder
o Negotiating final deal documentation
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22. Advisors / Brokers – Role When Working with
Plaintiffs and Law Firms
• Funder selection is key – as the market specializes, knowing which funders are optimal for a given
opportunity is important
• Creating materials for the funders’ review is a significant advantage – you have the chance to
highlight your client’s best arguments and to mitigate any concerns
• Advisors / Brokers should have a finely-tuned sense of market rates for the opportunity presented
– this awareness and experience greatly aids in negotiations
• The fact that the Advisor / Broker is a repeat player in the industry typically means that the
funders will be more responsive to the opportunity (i.e., better service)
• Working closely with the lawyers who will be litigation the underlying claims is a clear advantage,
and effort should be made to feature such lawyers in the process
• Knowledge of industry standard transactional terms is another major advantage that the Advisor /
Broker brings to the equation
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23. Advisors / Brokers – Role When Working with Other
Parties
• Advisor / Brokers should ideally work alongside their clients for the entire funding cycle –
from conception to the closing of deal documents
• As a result, Advisor / Brokers will often find themselves working with experts (especially as
regards the estimation of damages) and insurance brokers (for more sophisticated funding
transactions that may include multiple parties
• As such, Advisors / Brokers should develop a network for such experts so that they can
refer such experts to their clients and/or monitor the performance of such experts for their
clients
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24. Insurance Brokers in Litigation Finance Industry –
Generally
• Insurance brokers help litigation finance groups, law firms, and litigants identify portions of
litigation risk that can be transferred to insurance markets to achieve strategic goals
• Generally, insurance solutions work in the litigation finance context to guarantee minimum
outcomes
• Brokerage groups such as CAC have a team of bankers who help secure financing
against the A-rated insurance collateral, monetizing a portion of a litigation position
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25. Insurance Brokers – Role When Working with
Litigation Funders
• Insurance brokers can work with litigation finance groups to guarantee minimum outcomes
on either a single-matter or portfolio basis
• Typically litigation finance groups find insured solutions attractive for non-risk related
reasons, such as:
o Monetizing a position that has resulted in a substantial judgment or award but that will
be several years until liquidity
o Attracting new kinds of investors who want or require A-rated investment products
o Providing clients who have high quality litigation assets with financing options with a
cost of capital that is lower than traditional funding but that works for a funder from a
risk-adjusted internal rate of return (IRR) perspective
o Solving concentration risk issues or limited partner (LP) investment limits issues
o Raising non-recourse debt on the basis of the insured collateral for early distribution to
LPs and/or reinvesting in new litigation opportunities
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26. Insurance Brokers – Role When Working with
Plaintiffs and Law Firms
• Insurance brokers can also help law firms and litigants identify situations where insurance
can be used to set a minimum floor value to a claim or series of claims in a way that
achieves strategic goals
• For exceptional quality litigation assets (typically post-award or post-judgment), it often
makes sense for plaintiffs to secure judgment/award preservation insurance and then
allow groups like CAC with an integrated banking team to secure non-recourse financing
on the basis of the policy at attractive rates
o This often results in better economic terms, and larger monetization
o Plaintiffs often are interested in this because even post-award or post-judgment, a
liquidity event can be several years still in the future
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27. Insurance Brokers – Role When Working with
Plaintiffs and Law Firms (cont’d)
• As advisors, law firms should be aware
• Law firms, likewise, can benefit from floor-value insurance to protect their own contingency fee
or attorney’s fee interest in a case or portfolio of cases
- Law firms with substantial or growing alternative fee arrangement books can benefit too
from wrapping their book with insurance as a financial hedge and/or source of lower cost of
capital to pay attorneys while contingencies are still outstanding
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28. Insurance Brokers – Role When Working with Other
Parties
• Insurance brokers can assist litigation finance brokers by helping them understand the
availability of insurance on a given risk or portfolio
• Litigation finance brokers can then consider ways to leverage insurance to best position a
client’s opportunity in the finance marketplace
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29. Damages and Valuation Experts in Litigation
Finance Industry – Generally
• Industry and financial experts engaged to provide asset- or case-specific guidance to
litigation funder and litigants:
o Regarding the strength of the merits of the case
o Regarding the state of the documentation and alleged “bad acts”
o Regarding industry norms
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30. Damages and Valuation Experts – Role When
Working with Litigation Funders
• Industry and financial experts are engaged when there are esoteric assets in question or
industry specific issues that are part of the litigation claims
• Working with the litigation funder and (at times) the litigation firm to consult and provide
unbiased view of the merits of the case and potential approach
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31. Damages and Valuation Experts – Role When
Working with Plaintiffs and Law Firms
• Industry and financial experts can play the role of the various parties in the case and
attempt to uncover or protell the defense strategies that may be employed
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32. Damages and Valuation Experts – Role When
Working with Other Parties
• Financial and insolvency professionals are often serving as a Receiver, a Trustee, or
another fiduciary that can engage litigation funders
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33. Law Firms in Litigation Finance Industry –
Generally
Law firms and lawyers play an extensive role in the litigation finance industry because:
• Industry naturally involves litigation, for which lawyers are key parties, including in
analyzing the value of the litigation that is the subject of litigation finance arrangements;
• Lawyers assist parties with navigating legal and ethical concerns;
• Litigation finance arrangements are documented with bespoke agreements requiring
expertise
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34. Law Firms – Role When Working with Litigation
Funders
• Due diligence
• Negotiating and documenting transactions
• Navigating legal and ethical concerns
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35. Law Firms – Role When Working with Plaintiffs and
Law Firms
• Negotiating and documenting transactions
• Coordinating with litigation funders
• Coordinating with counsel handling the litigation that is the subject of litigation finance
arrangement
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36. Law Firms – Role When Working with Entities
Investing in Litigation Finance Firms
• Due diligence
• Negotiating and documenting transactions
• Navigating legal and ethical concerns
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37. About the Faculty
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38. About The Faculty
Marc Carmel – mcarmel@mcdonaldhopkins.com
Marc Carmel is a member of McDonald Hopkins’ Business Restructuring Services Department and the founder and
Co-Head of the firm’s Litigation Finance Group.
Marc has extensive experience in the litigation finance industry. He represents clients in all aspects of the industry,
including plaintiffs and law firms seeking funding, traditional and non-traditional funders, and investors who provide
capital to funders. Before joining McDonald Hopkins, he was the leader of a litigation finance firm’s involvement in
the bankruptcy and restructuring sector. While there, he was responsible for investment sourcing, due diligence, and
monitoring of investments.
Additionally, Marc has two decades of experience representing public and private companies, private equity and
other investment firms, directors and executives, lenders, committees, and equityholders in distress and non-distress
engagements. He advises clients regarding strategic alternatives, including: out-of-court and in court restructurings
and bankruptcies; mergers and acquisitions, refinancings, recapitalizations, and sales; and fiduciary duties and
governance matters.
Marc earned his Juris Doctor from Harvard Law School and his Masters of Accounting and Bachelor of Business
Administration degrees from the University of Michigan.
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39. About The Faculty
Joel Cohen – jcohen@stout.com
Joel Cohen is a Managing Director in Stout’s Disputes, Compliance, & Investigations group. Joel has
over 19 years of experience in the dispute, forensic, and insolvency practice areas, most specifically
focused in the financial services and asset management industries. His experience encompasses a
number of significant cross-border insolvency and litigation matters, where he has served as financial
advisor and consulting expert to fiduciaries, offshore liquidators, bankruptcy trustees, and litigation
trustees. He has assisted these clients in a variety of litigation consulting services, including asset
tracing, fraud, Ponzi schemes, industry custom and practice for investment managers, and forensic
analysis. Joel has also led several internal investigations within the context of family office, investment
advisors, and various corporate structures.
Joel has expertise in managing the expectations of various stakeholders involved in insolvency
proceedings, liquidations, litigation settlements, and receiverships, namely in his capacity of assisting
a board, trustee, receiver, or official liquidator with their duties, including U.S. and cross border
considerations. He has extensive experience within the offshore world, regularly handling cases out of
the Caribbean.
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40. About The Faculty
Andrew Langhoff – andrew.langhoff@redbridgesadvisors.com
Andrew Langhoff launched Red Bridges Advisors LLC in December 2017.
Andrew has worked in litigation finance since 2012. He spent several years as the COO of
Burford Capital, also serving as CEO of Burford’s UK operations and as a Director of the
Association of Litigation Funders of England and Wales. Following his time at Burford, Andrew
was a Principal at Gerchen Keller Capital, where he led origination for the firm. At the time of
its acquisition in December 2016, Gerchen Keller was the largest litigation finance firm in the
world, with assets of over $1.4 billion.
Andrew began his career as a litigator with the law firm of White & Case in New York. He
subsequently held in-house legal positions at Disney/ABC and was the General Counsel of
Dow Jones & Company’s Local Media Group. Andrew is a graduate of the University of
Virginia Law School.
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41. About The Faculty
Andrew Mutter – andrew.mutter@cacspecialty.com
Andrew is a co-leader of CAC Specialty’s Contingent & Litigation Risk Team. Andrew specializes specializing in
negotiating, placing, and advocating for coverage for Litigation and Contingent Risk Insurance for corporate
claimants, defendants, law firms, and finance groups.
Andrew’s practice focuses on crafting bespoke solutions for Litigation and Contingent Risk Insurance, providing
strategic certainty around both contingent legal assets and contingent legal liabilities. Andrew has placed over $2
billion insurance limits in the contingent risk markets on both claimant-side and defense-side contingencies. On
the basis of these policies, Andrew and the Contingent Risk team has worked closely with CAC’s financing arm,
Dorset Peak, to provide several hundreds of millions of dollars in liquidity.
Andrew started his career at King & Spalding, where he gained significant insurance experience successfully
litigating over half a billion dollars in D&O and E&O claims on behalf of financial institutions. Andrew also has
extensive experience in bet-the-company litigation, business torts, and healthcare related investigations and
business disputes.
Andrew earned his J.D. from The University of Virginia School of Law and his B.A. from Vanderbilt University. He
is also a former Teach For America teacher, with four years of experience in public education.
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42. Questions or Comments?
If you have any questions about this webinar that you did not get to ask during the live
premiere, or if you are watching this webinar On Demand, please do not hesitate to email us
at info@financialpoise.com with any questions or comments you may have. Please include
the name of the webinar in your email and we will do our best to provide a timely response.
IMPORTANT NOTE: The material in this presentation is for general educational purposes
only. It has been prepared primarily for attorneys and accountants for use in the pursuit of
their continuing legal education and continuing professional education.
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