Certum Group was pleased to sponsor the LF DealMaker’s Conference in September 2023.  Key takeaways from the conference were:

The market for secondary transactions in the litigation funding space continue to grow.  For those looking to invest in that space, a few lessons are critical:

• Buyers should ensure that the seller’s motivation for the deal and justification for the price are both compelling and convincing. 
• Buyers should understand the risks.  For portfolio deals, has the portfolio been hitting guideposts over time?  Are there looming collection risks?  What other downside scenarios could impact performance over time?  Due diligence is critical. 

While litigation insurance continues to be an important part of many litigation funding transactions, a few observations are worth reporting:

• Despite the importance of insurance, funders are not, generally, deciding to fund deals solely because there is insurance (and thus downside protection). 
• The current trend favors insuring portfolios of cases over single case risks.
• There is curiosity as to how the market will react when, inevitably, one or two big insurance “towers” fall.  Will this cause insurers to retreat?  Will pricing go up?  We should know more over the next 1-3 years.

For those looking for litigation insurance and/or funding, candor is the rule.  Sophisticated parties do not want to hear a pitch given through rose-tinted glasses.