Here is the analysis of "Hot Legal Topics" for the last three days (Tuesday to Thursday) focusing on mass litigation, landmark judgments, and litigation funding.

Hot Legal Topics — Friday

Period: last 3 days (Tue-Thu)

New Laws / EU Directives

What has been passed/discussed that could enable waves of litigation?

• Stricter Regulation of Litigation Funders (USA): In the United States, legislative pressure on "Third-Party Litigation Funding" (TPLF) is growing. The states of Michigan and Colorado are advancing legislation that prescribes extensive transparency obligations for litigation funding in civil proceedings [1, 2]. In parallel, the U.S. International Trade Commission (ITC) has proposed a new disclosure rule that compels parties to disclose third-party funders [3].
• Disappointment in the United Kingdom (UK): The British litigation funding industry had to accept a setback. The expected legislation to remedy the "PACCAR" judgment (which complicates the funding of collective actions) was surprisingly absent from the King's Speech on the new government agenda [4].
• Opening of New Markets (India): India is increasingly coming into focus for litigation funding. Domestic and global investors are beginning to finance commercial disputes in exchange for profit participation more intensively, which could benefit mass proceedings in the region in the long term [5].

Federal Court of Justice / Landmark Judgments

Judgments with mass impact.

• Liability for AI Chatbots (Germany): The Higher Regional Court of Hamm has decided that companies (in this case doctors) are liable for false statements made by their AI chatbot on their own website. The bot had incorrectly assigned non-existent specialist medical designations. Leave to appeal to the Federal Court of Justice (BGH) was granted. This pending landmark judgment has enormous relevance for the mass deployment of AI bots in customer contact [6].
• Success Against Shrinkflation (Germany): In an important judgment for consumer protection, the Regional Court of Bremen ruled in favor of a lawsuit by the Consumer Protection Center against Mondelez (Milka). The reduction of the chocolate bar from 100 to 90 grams while maintaining the same packaging was deemed impermissible misleading of consumers [7, 8].
• Compensation Claims Against Tech Giants (ECJ): The European Court of Justice has confirmed the Italian implementation of the EU Copyright Directive. This massively strengthens the position of press publishers to collectively demand compensation from platforms like Meta or Google for the use of their content [6, 9].
• False Discount Promises (Australia): A court has found that the supermarket chain Coles misled customers with their campaign for alleged price reductions. This judgment is a major success for the consumer protection authority and supports parallel class actions against such pricing tactics [10].

Trends in Litigation Funding & Legal-Tech

What's moving?

• Tokenization of Litigation Risks: Legal-Tech and crypto continue to converge. With Kairos Digital Loan Notes, British litigation funding is being brought to tokenized capital markets for the first time. This opens up completely new, decentralized capital sources for the industry to finance mass proceedings [11].
• Criticism of "Nuclear Verdicts": In the United States, litigation funding is increasingly being identified as a price driver. New lobbying campaigns argue that external funding leads to increasingly extreme damage awards ("Nuclear Verdicts"), whose costs are ultimately passed on to the general public through higher consumer prices [11].
• Aggressive Margin Demands in Class Actions: In an Australian class action against sports betting providers (Ladbrokes/Neds), the law firm Maurice Blackburn is demanding a "Group Costs Order" of 35 percent of the amount recovered. This underscores the fierce battle over margins in collective legal protection, especially since the firm argues that the "pie to be distributed" is smaller in this case [12].