Firm / Organisation

Validity Finance LLC

This content is provided by Validity Finance LLC.

CEO: Ralph Sutton
Number of employees: 14

Overview & History:
Validity is a commercial litigation finance company that provides businesses, law firms and individuals with non-recourse financing for a wide variety of commercial disputes. Founded in 2018, Validity is backed by $300 million in financing with an investment team composed entirely of former trial litigators from prestigious firms such as Gibson Dunn, Kirkland and Ellis, and Boies, Schiller & Flexner. Most of team have clerked for federal judges, including the U.S. Supreme Court.

With an average of over four years financing litigation, Validity’s management team maintains a 70% success rate on resolved cases. Validity’s founder, Ralph Sutton is one of the pioneers of the industry having co-founded one of the first dispute funding entities in the US, Credit Suisse’s litigation risk strategies group. In 2011, Ralph launched and ran the US arm of Bentham IMF until 2017. Dave Kerstein, Validity’s Chief Risk Officer brings unparalleled expertise in helping mitigate litigation risk with creative funding models. Prior to joining Validity, Dave was an investment manager at Bentham and practiced at Gibson Dunn for 15 years. Laina Hammond, who runs Validity’s Houston office, is widely recognized as a thought leader in disputes and regularly asked to speak about funding at Texas Bar, Women’s Litigation, and Law Firm CLE events.

Validity puts clients at the heart of their business by offering full transparency on the funding process. The firm will only invest in cases in which the client can realistically recover 50-60% of any eventual monetary award or settlement. In 2019, Validity partnered with The American Lawyer to run the Litigation Finance Client Experience Survey. With more than 330 respondents, Validity found that 99% agreed trust is one of the most important criteria for clients to use when choosing a funder.

Beyond capital investments, Validity has also demonstrated its commitment to making a difference in the legal community through contributions to academic, regulatory, and non-profit programs. Validity’s Equal Access Fellowship program offers law students of diverse backgrounds an opportunity to learn about funding, with the option to spend half the summer at a legal aid organization. Validity also supports the NYU Center for Civil Justice for the Library of Dispute Finance, where Validity’s Director of Underwriting, Julia Gewolb serves on the board.

Services:
Validity invests in general commercial litigation, encompassing a wide variety of disputes in different disciplines and industry sectors including bankruptcy, asset enforcement, arbitration, intellectual property, and portfolio investments for law firm and corporations. A typical funding commitment is between $2-10 million for single case investments, and $2-20 million for portfolios.

In under two years, Validity has committed over $100M to cases and clients across diverse industries and jurisdictions. The firm’s investments are helping lawyers pursue breach of contract cases, international arbitrations, fraud, insurance, patent, and copyright/trademark claims for more than 150 clients in the pharmaceutical, real estate, mining, banking, hospitality, and manufacturing industries in the United States, Europe, Asia, and Africa.

Some recent case highlights include:
Validity has committed $10 million in funding to a multi-national to support their multi-billion-dollar arbitration claim arising from a failed international joint venture.
■ Validity has committed $10 million in portfolio funding to a boutique litigation firm to help handle several hundred million dollars’ worth of weather-related insurance disputes.
■ Validity has committed $4 million to an international corporate affinity program in a breach of contract case with claim value in the tens of millions.
Validity has committed $3.75 million to a biotech manufacturer locked in the middle of a multi-million-dollar case related to the patent rights of specific breakthrough technology.
■ Validity has committed $11 million in portfolio funding to an AmLaw 50 firm to support a variety of cases the firm is pursuing.