Funding round-up: Harbour backs Marriott case, LCM’s new portfolio

Sheraton: One of the affected brands

Harbour Litigation Funding is backing a representative action being brought by group claims specialist Hausfeld against Marriott International following a major data breach.

Martin Bryant has filed a data breach representative action seeking compensation on behalf of millions of hotel guests domiciled in England and Wales who made reservations at hotel brands globally within the Starwood Hotels group, now part of Marriott.

Mr Bryant is the founder of technology and media consultancy Big Revolution, and a speaker and writer.

Unauthorised access to hundreds of millions of guest records was gained by unknown persons between July 2014 and September 2018 following a data security incident involving the Starwood guest reservation database. Marriott took over the group in 2016.

It exposed information such as guests’ names, email and postal addresses, telephone numbers, gender and credit card information.

Hausfeld partner Michael Bywell said: “Over a period of several years, Marriott International failed to take adequate technical or organisational measures to protect millions of their guests’ personal data which was entrusted to them.

“Marriott International acted in clear breach of data protection laws specifically put in place to protect data subjects.”

Last year, the Information Commissioner’s Office issued a statement of its intention to fine Marriott for not undertaking sufficient due diligence when it bought Starwood and not doing more to secure its systems.

Mr Bryant said: “I hope this case will raise awareness of the value of our personal data, result in fair compensation for those of us who have fallen foul of Marriott’s vast and long-lasting data breach, and also serve notice to other data owners that they must hold our data responsibly.”

Guests domiciled in England and Wales who made a reservation to stay around the world in one of the former Starwood brand hotels before 10 September 2018 will automatically be included within the class.

The brands are: W Hotels, St Regis, Sheraton Hotels & Resorts, Westin Hotels & Resorts, Element Hotels, Aloft Hotels, The Luxury Collection, Tribute Portfolio, Le Méridien Hotel & Resorts, Four Points by Sheraton and Design Hotels.

Ellora MacPherson, chief investment officer at Harbour, said: “As new legislation protecting personal data is enacted, more and more data breaches are resulting in litigation.

“Claims of this size and nature are extremely difficult to bring and sustain without the benefit of litigation funding.”

However, the claim website does not say what proportion of the damages will go to Harbour in the event of winning.

Meanwhile, listed funder LCM has executed an agreement to finance a portfolio of up to 20 construction claims brought by a subsidiary of an unnamed global building and infrastructure contractor in jurisdictions around the world.

The transaction originated through LCM’s strategic alliance with Norton Rose Fulbright. It is the company’s third corporate portfolio deal, an area it has been prioritising.

Cameron Harvey, head of disputes of Norton Rose Fulbright, said: “We entered into a strategic alliance with LCM because we foresaw a growing need for corporate litigants to be able to engage in necessary dispute resolution without having the experience cripple their balance sheets, something which is even more crucial during the COVID-19 pandemic.”

Separately, rules that came into force in Australia last week mean that litigation funders now have to hold an Australian financial services licence and comply with the managed investment scheme regime.

The previous exemption meant they did not face the same regulatory scrutiny and accountability as other financial services and products.

The Australian government said it would ensure funders operate transparently, were appropriately regulated and were accountable.

LCM started in Australia and only recently moved its headquarters to London. Speaking earlier this year, chief executive Patrick Moloney said it already had a licence and backed the change.

He said that, as well as improving transparency, it could also provide LCM with “a strategic advantage as the cost and compliance issues are likely to create further barriers to entry and restrict the numbers of financiers that can fund class actions”.

There is also an Australian parliamentary inquiry into litigation funding and the regulation of the class action industry, which is due to report by 7 December.

In other funding news, Omni Bridgeway – formerly known as IMF Bentham – is to find the claims of a significant group of bondholders against leading Swiss investment bank UBS over its role in the 2017 sale of Swiss franc-denominated debt for Greek retailer Folli-Follie that has since defaulted.

The case will be pursued in Switzerland by international firm Quinn Emanuel Urquhart & Sullivan.

Finally, in an indication that funding is booming in the USA too, Pravati Capital this week announced the launch of its fifth litigation finance investment fund since 2013, looking to raise $200m.

For the first time it will allow non-US and US-tax exempt international qualified investors the chance to invest.

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