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Asset recovery roundtable: Post-pandemic trends in offshore markets

Learn what leading litigators, insolvency practitioners and financial professionals have to say about major legal developments and expected trends in the offshore markets.

  • Daniel Hall, Michael Redman

In June 2021, Daniel Hall and Michael Redman, Managing Directors and co-leads of global corporate intelligence at Burford, posed questions on major legal developments in the offshore markets over the past 18 months and economic trends that will play out in the markets post-pandemic to leading litigators, insolvency practitioners and financial professionals in the region.

A recent act in the Cayman Islands, the Private Funding of Legal Services Act 2020 (PFLSA), which came into force in May 2021, permits third-party funding in a much wider range of proceedings and allows law firms to enter into contingency fee agreements. How do you anticipate this law changing the way law firms interact with their clients and how will it benefit both the claimant and the representing attorney?

John O’ Driscoll: The issue prior to PFLSA was that litigation funding agreements were subject to advance approval by the Grand Court on a heavily restricted basis. They were all but unknown in commercial cases as a result of the continued existence of maintenance and champerty as criminal offenses, and the availability of litigation funding remained scarce. With the increased certainty provided by PFLSA, we anticipate an increase in claims. However, there is likely to be a short delay in uptake initially as the act specifically applies only to causes of action which have accrued since it came into force.

Laura Hatfield: In reality, litigation funding has been available for over 15 years (particularly in the insolvency space), but PFLSA removes the need to carefully avoid landmines of champerty and maintenance lurking around alternative financing—which often adds a layer of costs in obtaining advice and court confirmation. The law also allows for contingency fee arrangements, either based on value of recoveries or an uplift on normal fee rates as a success fee. Cases that were unable to proceed because of a lack of finance can do so, and claimants will get compensation where otherwise there will have been none.

Christopher Smith: PFLSA is still in its infancy, but if it achieves its intended purpose, it should allow for a much wider use of litigation finance and flexible fee arrangements between claimants and their attorneys. From a claimant’s perspective, the most obvious benefit is that it allows claims to be brought that might otherwise have been difficult to pursue due to a lack of resources. From the attorney’s perspective, the main benefit is commercial given the uplift in fees in the event of a successful claim. It remains to be seen what appetite Cayman Islands’ attorneys will have for increased risk versus potential increased recovery in these new contingency fee arrangements.

Matthew Brown & Jonathon Milne: Nowadays, litigation funding and other alternative fee arrangements are commonly viewed as necessary components of a sophisticated and high-functioning legal system. The Grand Court of the Cayman Islands has expressly recognized the shift in the tide of public interest. The principal objective of the act is to remove any lingering uncertainty in relation to the status of litigation funding in the Cayman Islands. The introduction of clear parameters through bespoke legislation is likely to bring benefits to claimants, funders and their attorneys. While the Cayman Islands is among the first offshore jurisdictions to implement specific litigation funding legislation, they have the benefit of learning from and following the lead of other sophisticated onshore common law  jurisdictions, such as the UK and Australia.

Tim Prudhoe: The act is welcome and overdue; the tensions inherent in a contingency “onshore” will be no different in Cayman. The main impact will be the improved access to justice.

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About the participants

Matthew Brown is Counsel in the Litigation & Restructuring Department of Conyers Dill & Pearman in the BVI and has a broad practice covering all contentious aspects of commercial, trusts and insolvency law. Since joining Conyers in 2017, he has been involved in some of the jurisdiction’s leading cases and has appeared in a number of cases in the Commercial Court and Court of Appeal.

Laura Hatfield is the head of the Litigation and Insolvency & Restructuring groups in the Cayman Islands and Partner at Bedell Cristin. She has advised bankruptcy and restructuring professionals, lenders, investors and professional service providers in the Cayman Islands, UAE and Europe and has been involved in most of the significant Cayman Island cases in the last decade, including Bear Stearns and Weavering.

Jonathon Milne is a Partner in the Litigation department in the Cayman Islands office of Conyers Dill & Pearman and has extensive experience of complex litigation and insolvency matters. He focuses on financial services, litigation and insolvency/restructuring, acting for investment managers, directors, service providers, liquidators and receivers.

John O’ Driscoll leads the Insolvency and Dispute Resolution (IDR) team at Walkers in London and practices BVI and Cayman law. He specializes in contentious and non-contentious insolvency work and international disputes, and advises creditors, debtors, private equity and hedge funds and other stakeholders.

Owen Prew is a Senior Associate at Bedell Cristin. He is an English and BVI qualified solicitor advocate specializing in Commercial and Insolvency litigation. He has substantial offshore experience acting for and advising clients in respect of high-value commercial matters involving shareholder disputes, director’s breach of duty claims, enforcement of judgments and all forms of insolvency proceedings and remedies.

Tim Prudhoe is an English Barrister and practices both across the Caribbean from a Turks and Caicos Islands base as well from 3 Hare Court, London. A former Big Law lawyer, he brings commercial acumen to cross-border litigation strategies. He is often offshore counsel to disputes run from onshore involving litigation funding issues.

Christopher Smith is a Director of R&H Restructuring (Cayman) with more than 25 years of experience in corporate restructuring and insolvency. He is a UK-qualified and licensed insolvency practitioner and an insolvency practitioner in the Cayman Islands. He has been involved in a wide variety of restructuring and liquidation assignments, from advising stakeholders and investors in distressed situations, to acting as Official Liquidator appointed by the Grand Court of the Cayman Islands.

About the moderators

Daniel Hall is the Managing Director and co-lead of Burford’s global corporate intelligence, asset tracing and enforcement business. He previously spent ten years investigating fraud and financial crime and was a co-founder of Focus Intelligence Ltd, a leading asset recovery
advisory boutique acquired by Burford in 2015.

Michael Redman is the Managing Director and co-lead of Burford’s global corporate intelligence, asset tracing and enforcement business. He has worked in complex asset recovery and enforcement, holding senior positions in both Moscow and London before co-founding Focus
Intelligence Ltd.

Read Daniel Hall's Profile
Daniel Hall

Daniel Hall

Managing Director

Read Michael Redman's Profile
Michael Redman

Michael Redman

Managing Director