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Prohibitively expensive: Pinsent lands £25m litigation funding deal

Pinsent Masons has secured a £25m preferred-supplier deal with litigation funder August Ventures to offer ‘non-recourse’ funding at better terms than would normally be available.

Clients will have access to a dedicated facility at preferred rates and a fast-tracked due diligence process, while Augusta will also refer some clients to Pinsents.

Claimants will pay nothing if a claim is unsuccessful, and Augusta will fund the cost of pursuing the claim, including lawyer and expert fees, and recover payment from the paying party if the outcome is successful. The fee is reflective of the time taken to make a recovery, meaning the sooner the case settles, the smaller the fee.

Pinsents head of international arbitration Mark Roe, who leads third party funding for the firm, told Legal Business many clients viewed litigation and arbitration as prohibitively expensive. Even those that could afford it often preferred to invest in other areas of their business, he said.

He claims the deal with Augusta will provide clients with access to better prices for litigation funding than were generally available in the market.

‘Our deal with Augusta allows those who either haven’t got funds available or wish to use their funds on other things, to access justice substantially less expensively than would otherwise be the case,’ he commented. ‘What we’ve done is that by agreeing with Augusta that we will prefer them as our supplier they’ve agreed to give our clients much better terms than are generally available.’

Roe added that the disputes market had been busier this year: ‘What’s driving those varies from industry to industry. In the infrastructure space, margins are tighter, and there has been some tightening of the amount of cash available to contractors to pay claims and honour contractual obligations.’

Pinsents’ deal follows Clyde & Co announcing in March it had entered into an arrangement with Litigation Capital Management (LCM), which listed on the London Stock Exchange’s Alternative Investment Market last December, to make funding available for its clients on a single case or portfolio basis.

That deal landed its first portfolio financing arrangement in June this year, with LCM giving access to funding for 38 worldwide disputes and contractual claims over an initial five-year period for one of the firm’s aviation clients.