Third-Party Litigation Financing News

New fraud charges have been added to the criminal case against a former part-owner of a New York litigation funding firm arrested in March in a kickback scheme that allegedly defrauded his former business partners out of about $1 million.

Burford reported its profits surged to $15.9 million last year from $1.9 million in 2010, as the U.K. litigation-finance firm harvested millions of dollars from settlements negotiated by clients who turned to it for cash to maintain lawsuits they otherwise might have been forced to drop. Successful cases included one that settled for a $1.4 million profit a week after Burford invested in the litigation.

One of the most senior representatives of the US business community has warned that the risk of doing business in Australia will rise if the federal government adopts a light-touch approach to regulation of the litigation funding industry. Lisa Rickard, who is executive vice-president of the US Chamber of Commerce, is concerned that if the oversight of this industry is left to the courts "there is no doubt about the fact that it will add to the risk of doing business".