Third-party ltigation funding is on the rise in France and international law firm Hausfeld is well-positioned to benefit
Leaders League attended a reception hosted by litigation specialist firm Hausfeld on 18 September to celebrate the opening of its Paris office, which launched officially in March earlier this year. The reception stood out both for its grand setting - the very plush Hôtel Perrinet de Jars, home of the prestigious Cercle de l’Union interalliée - and its very varied guest list - which included several representatives of litigation funders, among others.
The attendance of many of these funders is a testament both to the relationships Hausfeld has developed in France, the firm had an enviable French client base prior to opening its Paris office, and to the expansion of the French third-party litigation funding space.
There are several indicators of this expansion. Some of the attendees at the reception worked for French-headquartered funders, proving that the market is already at a stage where it can produce home-grown talent. Additionally, while Hausfeld itself had used litigation funders in Europe - its Berlin office launch was backed with €30 million provided by Burford - the Paris launch was not financed in conjunction with any funders and office head Laurent Geelhand had pointed out at the time of the launch that the idea of a third-party-financed law firm would be very new to the French market. From discussions at the reception, what was maybe a little too novel then already feels more accepted only 6 months later, another tell-tale sign of rapid growth.
But maybe most tellingly, the biggest source of optimism for third-party funders and those law firms, like Hausfeld, that have positioned themselves at the vanguard of this space, is the development of the Damages Directive in Europe and the growing use of group actions. What was once seen as a singularly US practice, and at a smaller scale an Australian one, is now becoming more commonplace in Europe as more and more victims seek damages from, for example, cartelists either individually or as part of a group.
Commenting Geelhand said, “The EU Damages Directive implementation last year, has made it easier for individuals and businesses that have suffered harm because of anticompetitive conduct, to secure damages. More and more we see French and European corporate clients proactively pursuing private enforcement against cartels. The use of litigation funding in these cases is a useful tool for business. Funding allows corporates to pursue litigation – that they would otherwise not have budget for – at no or minimal cost to a business. As Hausfeld was one of the first firms to utilise third-party funding for corporate entities, our experience and reputation in the market with funders and insurers, means that we can offer clients unique packages both in the growing French market and across Europe.”
As a recent example, Hausfeld has taken the lead in representing plaintiffs pursuing six of Europe’s biggest truck manufacturers accused of fixing the price of trucks. The damages involved for France alone could reach several billion euros. With that kind of money at stake, it’s easy to see how more and more companies will think very closely about their exposure to such cartels and look to leverage the EU Damages Directive for any redress.
All these positive indicators no doubt contributed to what was a very successful party.