Tag: 爱上海LU

first_imgLitigation funders will be liable for indemnity costs where these are awarded against their funded client, even if the funder itself has been guilty of ‘no discreditable conduct’, the Court of Appeal ruled today in Excalibur Ventures v Texas Keystone and others [2016] EWCA Civ 1144.The court also dismissed funders’ arguments that their liability should be reduced because the amounts that were provided as security for costs – as opposed to the ongoing funding of the case – should not count towards the Arkin cap.The Arkin principle limits a funder’s liability at a level equivalent to the amount it put into the litigation.In December 2013, Excalibur Ventures, represented by Clifford Chance, suffered a crushing defeat in its $1.6bn claim against Texas Keystone over interests in four large oilfields in Iraqi Kurdistan. Ordering indemnity costs against Excalibur, the trial judge described the litigation – which failed on every point – as ‘speculative and opportunistic’.The litigation was financed by five funders to the tune of £31.75m, including £17.5m provided as security for costs.In today’s judgment, Lord Justice Tomlinson said: ‘The argument for the funders boiled down to the proposition that it is not appropriate to direct them to pay costs on the indemnity basis if they have themselves been guilty of no discreditable conduct or conduct which can be criticised.‘Even on the assumption that the funders were guilty of no conduct which can properly be criticised, and I accept that they did nothing discreditable in the sense of being morally reprehensible or even improper, this argument suffers from two fatal defects… .‘First, it overlooks that the conduct of the parties is but one factor to be taken into account in the overall evaluation. Second, it looks at the question from only one point of view, that of the funder…. It ignores the character of the action which the funder has funded and its effect on the defendants.’He added: ‘A litigant may find himself liable to pay indemnity costs on account of the conduct of those whom he has chosen to engage – e.g. lawyers, or experts [who] may themselves have been chosen by the lawyers, or witnesses… The position of the funder is directly analogous.’Tomlinson LJ said it would ‘seldom’ be necessary for a judge to consider whether the funder knew or ought to have known the ‘egregious’ features of the case that gave rise to indemnity costs.‘By funding, the funder takes a risk, a risk as to the nature of which he has the opportunity to inform himself both before offering funding and during the course of the litigation which he funds,’ he added.Addressing the issue of the extent to which funders were permitted to involve themselves in the litigation they fund without falling foul of the doctrine of champerty and maintenance, the judge said: ‘Litigation funding is an accepted and judicially sanctioned activity perceived to be in the public interest.‘What the [trial] judge characterised as “rigorous analysis of law, facts and witnesses, consideration of proportionality and review at appropriate intervals” is what is to be expected of a responsible funder… and cannot of itself be champertous.’On the issue of security for costs, Tomlinson LJ said: ‘One question which arises in this appeal is whether funds made available solely for the purpose of enabling a litigant to put up security for costs counts towards the Arkin cap, ie. whether such a funder risks losing the amount advanced plus the same amount again, as in the ordinary case of a funder who advances funds to defray the litigant’s own costs.’He concluded that he agreed with the trial judge’s assessment that ‘money provided to Excalibur [for] security for costs was an investment in the claim just as much as money provided to pay Excalibur’s own costs and should count equally towards the Arkin cap’.The Association of Litigation Funders, which provided evidence to the court, said it welcomed the Court of Appeal’s ‘reaffirmation’ of third-party funding as a judicially sanctioned activity. It noted that the court had drawn a distinction between professional funders, and those who are inexperienced, and had not adopted the professional approach expected of ALF members in assessing the merits of the case.Susan Dunn, head of litigation funding at Harbour, added: ‘Specifically to Excalibur we mustn’t forget that, although the judge upholds the High Court’s decision, he reiterates that awarding costs on an indemnity scale is a departure from the norm. ‘In this particular case, he agreed that the character of the claim, the size and effect justified this specific outcome. ‘It highlights not only the importance of the due diligence process before the decision to fund, but also that it is taken by experienced people who are well versed with the risks of third-party funding and very knowledgeable about the litigation process.’ She added: ‘In our view, the decision also offered peace of mind related to some of the concerns the ALF had made with relation to champerty.’last_img read more

first_imgLennar’s disappointment came the same day the National Association of Realtors reported that sales of previously owned homes fell in August to the lowest level in five years. The slowdown is extending to major retailers, including Target Corp. and Lowe’s Cos., which have trimmed profit expectations for the year as consumer spending wanes. “It’ going to be a distressingly long time before we get back to normal,” said University of California, Los Angeles, economist Edward Leamer, who predicts a 20 percent price slide over three or four years in once red-hot real estate markets, including California, Nevada and Florida. Since the magnitude of this housing boom was unprecedented, economists are uncertain about how severe the downturn will be, said Susan Wachter, a real estate and finance professor at the University of Pennsylvania’s Wharton School of Business. She rates the odds of recession in the next year at one in three. “We are in uncharted territory,” she added, noting that a recession would further slow recovery in the battered housing market. Former Federal Reserve Chairman Alan Greenspan estimates the likelihood of recession, generally defined as two consecutive quarters of a decline in economic growth, as less than 50 percent but greater than 1-in-3 odds. The Fed, chaired by Ben Bernanke, calculates that a 20 percent drop in inflation-adjusted home prices over two years would cut U.S. economic growth up to 11/2 percentage points after three years. The delay in the impact reflects how long it takes negative or positive events to show up in the gross domestic product in the U.S., with its huge and dynamic market, according to Fed research. Not everyone sees a gloomy outlook. The National Association of Realtors, which had been criticized by economists and bloggers for its sunny predictions during the boom times, remains optimistic. The group’s senior economist, Lawrence Yun, projects home sales will stabilize after modest gains early next year. Peter Orszag, director of the nonpartisan Congressional Budget Office, told lawmakers last week that financial market turmoil, weakened consumer confidence and the housing market downturn pose economic threats but are not likely to sink the economy. On the plus side, the nation’s unemployment rate is low, as are long-term interest rates. Despite a rocky summer, benchmark stock indexes are up for the year, and inflation appears to be in check. The central bank is doing its part to prevent the economy from stalling, cutting a benchmark short-term interest rate half a percentage point last week to 4.75 percent. Joel Naroff, chief economist for Commerce Bank, said that, if the Fed cuts rates by an additional percentage point, “that could help turn (the housing market) around by the end of next year.” Yet recession fears are on the rise. Dean Baker, co-director of the Center for Economic and Policy Research in Washington, warns of a severe downturn as the housing market continues to unravel. Baker said he is bracing for the worst recession since World War II. In a bubble market, buyers don’t need to focus on whether an asset is overpriced, he said. In a weakened economy, “the psychology is broken,” Baker said.160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! Home prices fell less than 3 percent during the economic downturn of the early 1990s and rose through the 2001 recession, but have already dropped 3.2 percent over the past year, according to a closely watched housing market index created by Shiller. “This time, we’re in a bigger boom, and we face the possibility of a bigger decline,” Shiller told lawmakers last week. “It’s not just an issue of a recession coming up; it’s an issue of a drag on the economy, which might extend over many years.” Record energy prices are exacerbating recession worries as the U.S. heads into the coldest season of the year in most parts of the country. Signs of the housing market fallout are easy to find. Employers cut jobs in August for the first time in four years. Especially hard hit: home builders and mortgage-lending companies. On Tuesday, home builder Lennar Corp. posted a third-quarter loss of more than $510 million, said it had cut its work force by 35 percent so far this year and warned of future job losses. WASHINGTON – U.S. home prices have fallen further since mid-2006 than during the 1990-91 recession, and professional traders bet they’ll plunge up to 10 percent more in the next year. If the speculative traders making big-money bets are headed are right about where housing prices are headed, the question is not whether a U.S. recession is ahead but when it will start. Sizable drops in home prices in a year would likely curtail consumer spending sharply. Yale University economist Robert Shiller, who has long warned of inflated home prices, said a big hit to U.S. housing assets, worth about $23 trillion, would shock the broader economy. “It will upset balance sheets, it will upset lots of our economic institutions,” said Shiller, who argues that home prices were driven higher by greed, not by people just looking to live in places they bought. Adjusting for inflation, housing prices have soared 86 percent nationally in the past decade, and some cities, such as New York, Los Angeles and Washington, saw far larger jumps than most regions of the country. Yet homeowners’ ability to tap into credit lines pegged to the value of their houses has been a potent economic driver in recent years. For the vast majority of U.S. households, the home is the most substantial financial asset. If its value plummets, so does consumers’ sense of prosperity, which can restrict spending on everything – vacations, cars, eating out or buying new clothes. last_img read more

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