Litigation funding company Woodsford Group Ltd. is moving closer to winning $1.8 million from a law firm it backed in a suit against
A federal district court in Delaware should confirm an arbitrator’s $1.8 million award for Woodsford against law firm Hosie Rice, US Magistrate Judge Sherry Fallon wrote Friday in a recommendation. Fallon said Hosie Rice failed to establish a basis to overturn the award.
The funding dispute started when a Hosie Rice client, Space Data Corp., refused to pay the law firm after it negotiated a settlement in a lawsuit brought against Google. An arbitrator determined Space Data owed Hosie Rice up to $4 million of its fees and costs but denied “any additional contingency award.”
The lawsuit was originally filed in 2016 and included patent infringement, trade secret misappropriation, and breach of contract claims related to a balloon-delivered Wi-Fi system Space Data developed.
Hosie Rice lawyers reached a partial settlement over claims Google violated a non-disclosure agreement, and then was fired by Space Data, leading to a fee dispute.
Hosie Rice received about $800,000 in funding from Woodsford in the case against Google. The firm argued that it wasn’t required to pay Woodsford back because the money it received from Space Data was for legal fees, not a contingency award.
The dispute is a “straightforward debt collection matter” complicated only by “recalcitrant debtors,” Steven Friel, Woodsford’s chief executive officer, said in a statement.
“We will continue with enforcement efforts until we have recovered the full amount of the debt owed to us,” Friel said.
Hosie Rice partner Spencer Hosie said the firm will fight the magistrate’s recommendation, which now goes to a district judge in Delaware. Most litigation funding contracts are “non-recourse,” Hosie said, meaning the borrower doesn’t have to pay if it doesn’t actually win the case.
“That was the agreement we had with Woodsford,” Hosie said in an email.
The case is Frome Wye Limited v. Hosie Rice LLP et al., D. Del., 22 00249, 12/16/22.
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