Interview Kees Jan Kuilwijk (Liesker Litigation Financing)

1. You run the office the Liesker Litigation Funding office in Brussels, Belgium. What kind of cases does Liesker finance?

We fund commercial disputes in a broad sense, i.e. all kinds of conflicts about commercial agreements. Generally, they involve disputes between a company and a supplier or a customer. Sometimes it involves shareholders who no longer get along. Without focusing specifically on bankruptcies, we have had considerable success in Belgium, more or less by accident, working with receivers, both Dutch and Belgian, who were unable to monetise valuable assets, such as receivables, due to a lack of funds. The proceedings we finance do of course not come at the expense of the estate.

2. You are writing a book about the WAMCA. Publication is expected in summer 2024. Can you give us a sneak preview: what are the main findings that will be described in the book? 

Before writing the book, I dived deep into the ongoing proceedings and what has surprised me immensely is how carelessly litigation is conducted. I understand that the WAMCA is a new law and that there is not much case law available, but there is a law and there is a legislative history. Surely lawyers can be expected to have at least studied those.

Writs of summons are filed late or mandatory parts are not included. One foundation casually started a case on behalf of fifty to a hundred "acquaintances". Another foundation tried to raise a constituency without being clear as to what the case was actually about. This, of course, is negligent For a litigation funder, it is hugely important that lawyers  litigate carefully, and inadmissibility of a case purely because of mistakes that could easily have been avoided is not acceptable.

On the positive side, the other side of the coin, is that judges are strict and really want to make something of the WAMCA. The Netherlands has no use for a class action regime where foundations just do as they please and court decisions are unpredictable. A stable, mature regime is hugely important for litigation funders.

3. Recently, the court issued an interlocutory ruling in the case against TikTok. What does the ruling in TikTok - in which the court found it reasonable for a litigation funder to be allowed to recoup the amount it invested with a maximum multiple of five - mean for litigation funders? Is funding still attractive?

TikTok is an important ruling for several reasons, but certainly also for litigation funders. For us, it has both positive and negative aspects. On the positive side, all foundations involved in the proceedings will in principle be reimbursed for their costs, not just the foundation designated by the court as the one allowed to conduct the proceedings. So even if you have bet on the wrong horse as a litigation funder, it does not automatically mean that you will be left empty-handed.

Negatively, or at least regrettably, the court does not seem to fully understand exactly how litigation funding works. Litigation funders may receive as their return a maximum of five times the amount invested. What does the court mean by "the amount invested"?  It talks about "the costs incurred" but also about "the amount made available to the foundation." That is not the same thing.

Costs incurred are costs incurred, but the "amount made available to the foundation" is the available budget, i.e. including costs that were not incurred but would have been incurred in case of an appeal, for example. English funders call this "capital outlay" versus "costs". When a litigation funder makes a budget available, i.e. reserves it, for a five- or six-year period, it costs money (interest). It is the "capital outlay" that is funded.

Moreover, the court seems to believe that litigation funders just have money on the shelf but this is not the case. Every litigation funder, big or small, anywhere in the world, works with funds invested in by companies or individuals. Having a fund costs money and, as mentioned, setting aside a budget for a particular case from that fund also costs money. Looked at it this way, "five times the amount invested" is on the low side. Not if all the cases we invest in are actually won, but unfortunately that is not the case.

However, I do understand that the court wants to eliminate exorbitant returns. In some ongoing WAMCA cases, litigation funders can – in theory - receive 20 times the amount invested. That, of course, is excessive.

What can Ploum do for injured parties, claim foundations and/or litigation funders?

We regularly work with companies, litigation funders and claim foundations in the field of mass claims and complex (international) proceedings. Want to know whether your case is eligible for funding? Sparring on what a funding agreement should look like? Or questions about the WAMCA or a complex procedure? Then contact Michel Jacobs and/or Suzanne Poutsma.