Stefan Kirsten heads Nivalion’s activities in Germany and Northern Europe. He has seasoned expertise in the resolution and assessment of complex disputes, which he gained during his many years as a lawyer with multinational law firm Clifford Chance and as founder of his own high-end boutique. Stefan holds degrees from the University of Michigan (LLM) and the University of Regensburg (Dr jur), the latter of which appointed him adjunct lecturer for international litigation in 2015.
What types of cases does your organisation look to provide funding for?
Nivalion’s focus is on high-end litigation and arbitration proceedings with a dispute value of at least €7.5 million and good merits.
What jurisdictions do you provide funding for?
As a direct funder, we concentrate on continental Europe but also fund investment disputes against non-European states. As a secondary funder, we assume litigation portfolios and conduct co-funding operations with other first-class funders worldwide.
What are the main reasons clients seek out litigation funding?
While we still receive the classic “David versus Goliath” requests, we are increasingly approached by medium-sized and large companies that seek innovative solutions to transfer their disputes risks and to realise liquidity-intensive opportunities without drawing on their own resources. In other words: most successful corporates do not consider litigation as an attractive business line and prefer to put their money to better use. As a result, litigation funding develops more and more into legal finance.
What sort of cases do you personally enjoy working on most?
If litigation funding is the “final frontier” of corporate finance, then we at Nivalion like “to boldly go where no one has gone before”. Funding is an extremely dynamic industry, and we intend to shape it. This is why our favourite cases always start with a call from a top-notch lawyer who happens to have a “crazy” idea – which then develops into a completely new product, such as defence funding. We love to be first movers.
How might the coronavirus pandemic affect the third-party funding industry? Do you expect an uptick in certain cases being provided funding and/or an uptick in certain parties seeking funding?
The uptick is already there – particularly in clients from hard-hit sectors such as retail, transportation, automobiles and travel. Interestingly, the cases themselves are often completely unrelated to the pandemic but have been identified as assets that could bring in liquidity. This is why monetisation and portfolio funding solutions are heavily sought after.
As to the uptick in certain cases, it is safe to assume that insolvency-related disputes will increase over time, but to be honest, this is nothing that we hope for. We would very much prefer a world without covid-19 and would still have our desks full.
What attracted you to move to a third-party funder?
In retrospect, I would call it a logical development: I have always been passionate about complex litigation and arbitration matters, be it as counsel during my time with Clifford Chance or subsequently as an independent adviser in my own high-end boutique firm. However, after my first meeting with Nivalion’s managing partner and now my mentor Thomas Kohlmeier, it felt like watching The Matrix or 3D television for the first time: I realised that outstanding funders regularly deal with the sophisticated cases I was already used to, but in addition had to consider a totally new dimension – namely, the value of a dispute, which can actually turn a litigation or arbitration into an asset. When I then also realised that Nivalion was the only high-end funder with an explicit focus on civil law jurisdictions, I was hooked. The rest is history.
What advice would you give to younger practitioners who are thinking about working for a third-party funder?
You are absolutely right to consider third-party funding as a highly attractive alternative to a long-term career in a law firm. That said, do keep in mind that every funder will rely heavily on both the legal expertise and the professional network that you have acquired as a disputes practitioner – otherwise we would not be able to talk eye to eye to the world’s preeminent litigators and arbitrators. Therefore, be grateful for the excellent training that leading law firms have to offer, do not make the move too early – and do take your time to explore the differences among funders.
What’s been your greatest achievement in third-party funding to date?
This is easy: to have convinced three brilliant and super-cool lawyers to join Nivalion’s Germany and Nordics team!