下面是Ommid的客户问题及Adam所做出的回答。Here is Ommid’s guest post and interview of Adam Gerchen:
问j题：是什么吸引你关注到诉讼融资领域的？
Q：What first attracted you to litigation finance?
答：各个公司的管理层，包括律师事务所、公司及投资基金等，都受到法律预算的约束，他们需要更多的金融解决方案来解决诉讼成本问题。律师事务所经常碰到客户需要特别的费用解决方案。无论大公司还是小公司都几乎无法评价出法律花费所创造的价值。所以，我们的诉讼融资工具可以为这些客户提供成本对冲工具，同时，为一些投资人提供良好的有吸引力的回报。
A：The founding team, in their various roles at law firms, corporations, and investment funds, observed first-hand the internal constraints placed on legal budgets, and the need more broadly for financing solutions addressing litigation costs. Law firms continue to face a shifting financial landscape and client demand for alternative fee arrangements. And companies both big and small have little ability to tap the inherent value of claims or to finance their legal spend with corporate finance products. That market demand provides an opportunity for us to deliver solutions for our clients while achieving attractive returns for our investors.
问题：除了提供防守端产品外，我们还可以提供哪些不同东西？
Q：Besides offering products on the defense-side, how does GKC differentiate itself from other players in the space?
答：我们专注于我们能做的。比如我们专注于商业诉讼，回避诽谤类诉讼等。关注的类别包括：应收帐款、证券类诉讼、消费类诉讼，另外，我们专注于复杂的诉讼类别。
A：We wanted to separate ourselves in the industry in part by focusing on what we don’t do. By focusing solely on commercial litigation, and eschewing, on the plaintiff’s side at least, product liability claims, mass torts, securities litigation, and consumer class and mass actions, we felt GKC could attract a different breed of client, a quality of counsel and size of organization that historically never explored litigation finance. Our concentration on litigation with sophisticated parties has also been an important differentiator for the investors in our various funds as well.
问题：为什么有充足现金流的公司也发现诉讼融资是有利的工具？
Q：Why would large organizations with potentially sizable cash positions find third-party financing attractive?
答：无论一个公司有多大，其内部法律预算是有限的、紧张的。我们客户有全球100强公司，也有上市公司，仍然面临着推动他们的律师事务所去寻找其它资金来解决诉讼问题的情形。我们诉讼融资是帮助他们的工具之一。
A：Regardless of the financial strength of a company, internal legal budgets are normally tight and are established to fight wars of necessity, not choice. One of our partners, Travis Lenkner, witnessed firsthand the limitations of litigation spend even at a Fortune 100 company. The reality is, universally, whether from the C-suite or public shareholders, GCs face continual pressure to push their law firms to structure alternative fee arrangements. We are one of the tools that help address those forces.
问题：
Q：Can you walk the readers through how a typical litigation finance transaction works?
A：There is no typical transaction, in that the specific needs and goals of our client and the risk profile of the case drive our pricing, structure, and ultimate investment. But in general, we provide limited-recourse capital to companies or law firms and receive a return on our investment only when the underlying litigation is resolved successfully. For instance, we can offer a line of credit up to $5 million that is drawn as expenses arise during a legal proceeding with our investment return consisting of a percentage of the ultimate outcome of a case. The difficulty on the defense side is defining “success” ex ante. The basic construct of those investments involve classifying “success” at various stages of the litigation process (e.g., a $15 million settlement before summary judgment) and sharing the delta when outcomes are better than those predetermined levels. In the interim, GKC pays all costs of defense and only achieves an investment return if one of those “successful” outcomes is attained.
What type of clients has expressed an interest in your defense-side products?
The most interested parties have been repeat defendants that continually face ongoing legal spend in similar types of cases (e.g., product liability defendants, securities class actions, etc.). We have even explored with one Fortune 500 company taking over an entire portfolio of a specific class of claims, moving off of their income statement a sizable annual spend. The ideal candidate for financing on the defense side is not a first time litigant who believes anything besides dismissal with prejudice is a negative outcome.
What are the biggest concerns law firms and companies have expressed to you about litigation finance?
Most often, our potential counterparties want to confirm that we are not financing plaintiffs in the sorts of cases that produce outsized awards for trial lawyers but are unrelated to actual business disputes—massive class actions, tort suits, and the like. We also start each conversation by explaining the legal and ethical considerations surrounding litigation finance. Because we deal exclusively with sophisticated companies and law firms, and never with consumers, many of the stereotypes about “litigation funders” simply do not apply, and any lingering issues are easily satisfied. Even so, we have spent a tremendous amount of time and resources fleshing out these points and addressing them in the most comprehensive manner. We feel confident, as do the companies and law firms with which we have partnered, that we are adhering to the highest ethical standards in the industry. Recent court decisions about issues related to litigation funding — including a federal court case here in Chicago upholding the confidentiality of documents shared with a third-party funder — have vindicated our careful approach.
How should the insurance sector view litigation finance firms? Friend or Foe?
We serve the same clients as insurance carriers and we are all focused on evaluating risk and allowing companies to offset that risk when it serves their needs. As is true of the top insurance carriers, our clients include Fortune 500 companies and some of the leading law firms in the world. While not always in a D&O or E&O context, litigation finance is becoming mainstream and an important tool for these businesses, and we think overall the space should be viewed positively by the marketplace for bringing efficiency and financing tools that meet market demand. On the defense side, we believe our involvement incentives all parties to resolve litigation in an efficient and timely manner. From an insurance carrier perspective, resolution in this manner can only be viewed positively. We also believe that per the earlier response, repeat defendants whom understand the risks and costs of litigation are the ideal candidates to explore our defense products. Insurance providers, especially in a casualty context, might find our products quite attractive.
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