Hot Legal Topics — Friday

Period: Last 3 days (Tue–Thu)

New Legislation / EU Directives

The Federal Government has advanced legislation against digital violence, creating new criminal offences for sexualised deepfakes, digital voyeurism, and identity abuse [3]. These new offences are likely to trigger a wave of civil law follow-on claims (damages, injunctive relief), as affected parties can now rely on clearer criminal law anchoring points [3].

In Ohio, a Litigation Funding Disclosure law has come into force; trucking industry associations support the initiative with reference to inflated damages awards ("nuclear verdicts") in suits against transport companies [13]. This forms part of a broader US trend towards greater transparency in litigation funding, which may also have knock-on effects on mass claims business models [13].

BGH / Landmark Judgments

The Federal Court of Justice (BGH) has ruled that a trans man cannot effectively acknowledge paternity of a child if, at the time of the child's birth, he was still legally female; this applies also to children born before the Self-Determination Act (SBGG), and a statutory cure after five years (§ 1598(2) BGB) is not available [1]. The decision potentially affects a larger number of comparable filiation constellations arising prior to the SBGG entering into force [1].

The Federal Labour Court (BAG) has backed employers: parental leave commences bindingly even where the employee separates from his partner and child and moves out following the application [2]. The decision is likely to serve as a precedent for numerous comparable employment law disputes concerning the binding commencement of parental leave [2].

The Regional Court of Braunschweig (LG Braunschweig) has dismissed a state liability action brought by 30 relatives of victims of the Germanwings crash against the Federal Republic, on the grounds that potential claims against the airline took precedence over any state liability claim [4]. The judgment is of significance as a landmark decision on the delimitation of state liability and corporate liability in aviation mass casualty cases [4].

Trends in Litigation Funding & Legal Tech

In connection with the planned USD 800 million settlement of the Archdiocese of New York, a litigation funder has cautioned claimants against the "quick-pay" option, illustrating the growing role of legal funding providers in large-scale mass tort proceedings (abuse cases) [5]. According to a portfolio manager, the litigation funding industry has reached an "institutional inflection point" at which institutional capital is flowing into the sector in increasing volumes [6].

On the regulatory side, New York's usury interest rate cap remains a risk factor for litigation funders despite the new consumer financing legislation [7], while Delaware has introduced a rule providing for limited disclosure of litigation funding arrangements — without requiring the contracts themselves to be disclosed [10] — representing a further building block in the US trend towards greater transparency in legal funding, which is expected to influence mass claims business models [10].

Market signals are mixed: Litigation Capital Management lost an Australian insolvency claim financed with proprietary capital (A$2.9 million) [8], while insolvency-focused funder Manolete reports record revenues of £17.4 million and a case portfolio valued at £69 million [9], and Omni Bridgeway has closed its second fund series at its full target of USD 1 billion with 99% investor reinvestment [11]. In the legal tech space, compliance-focused platform Teddy AI has raised USD 60 million in seed funding against revenues exceeding USD 25 million [12].