Covering Every Contingency – Portfolio Funding of Litigation

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 MARKET VIEW – LITIGATION 

Therium’s Neil Purslow examines the different funding options available

Since the introduction of damages-based agreements (DBAs) on 1 April 2013, use of contingency fee arrangements (CFAs) in England and Wales has been very limited, due largely no doubt to the fact that partial DBAs are not permitted and also the flaws in the enabling regulations have created uncertainty as to the efficacy of this new form of agreement. Nevertheless, commercial litigators have shown significant interest in taking litigation risk on their cases in return for a contingency fee upside. While this has, however, been difficult to achieve to date, Therium has now launched a portfolio funding offering which, through using a variation of a typical funding structure, allows law firms to offer contingency fee-based services to their litigation clients,
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Pick your battles

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 THIRD-PARTY FUNDING 

London’s litigation funders are turning their attention to international arbitration. Can this deliver their breakthrough?

No sooner had Excalibur begun to drift from memory than another setback befell the litigation funding industry: the decision in August of the RSM v Saint Lucia majority to award security for costs on account of an unnamed funder’s involvement in the case, the first time such an order had been issued in the context of investment arbitration.

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Growing the Litigation Funding Market

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 MARKET VIEW – LITIGATION 

Simon Dluzniak of Bentham IMF discusses Europe’s litigation funding market and compares it with the more mature Australian market the funder has come from

The third-party litigation funding market in this jurisdiction is, relative to Australia, still in its infancy. Hence it is incumbent upon the various stakeholders within the industry to continue to create awareness of the benefits of litigation funding in assisting and shaping its growth. After what appears to have been a fairly positive start, third-party funding (TPF) appears to have suffered a backlash of sorts as a result of a spate of so-called ‘setbacks’, most notably the loss of high-profile funded cases (for example, the Excalibur case) and the collapse of a well-known funder (Argentum).

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Litigation finance for trustees

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Nick Rowles-Davies of Burford Capital talks facilitating recovery while mitigating risk

Litigation is an ever-present issue to trustees, whether bringing claims or defending cases. Now more than ever there is a need for trustees to be aware of the options available for funding this litigation.

There has been a significant increase in certain types of litigation in the last few years, for example, fraud cases such as the Stanford and Madoff matters, media litigation caused by events at News Corp and the largest area of litigation in recent times – banking and finance litigation. Continue reading “Litigation finance for trustees”

Guest Post: Third party funders, out of the shadows

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Third-party funding (TPF) has suddenly become the black sheep of the litigation finance industry. In the wake of the spectacularly unsuccessful TPF-backed Excalibur Ventures case – a huge piece of litigation that Lord Justice Christopher Clarke described in December as “speculative and opportunistic” – questions are now being asked about what the problems that are emerging with some of the funding in that litigation mean for the rest of the industry. Continue reading “Guest Post: Third party funders, out of the shadows”

Litigation funders seek greater credibility with introduction of new complaints procedure

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The UK’s leading litigation funders have taken further steps to improve their PR and attack head on suggestions that they lack transparency by introducing a new complaints procedure and capital requirements, which could see funders given public warnings or struck off their voluntary quasi-regulatory body. Continue reading “Litigation funders seek greater credibility with introduction of new complaints procedure”

How to win cases and influence people – litigation funding strives to go mainstream

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As third-party funders enjoy robust growth within a buoyant disputes climate, Legal Business assesses current attitudes towards litigation’s controversial bankrollers.

Third-party litigation funders have suffered bad PR for more than 40 years. Often depicted as lurking in the shadows of the courtroom, waiting to collect their share of damages, lawyers have historically been curiously wary of funders since their inception.

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No such thing as a free lunch – first judgment clarifies termination of third party litigation fund

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Third party litigation funders look set to adopt a similar position to insurers in driving the litigation agenda after a judgment last week confirmed what the market already knew; there is no such thing as a free lunch or litigation.

Sitting as deputy judge of the High Court, Mr David Donaldson QC in Harcus Sinclair v Buttonwood Legal Capital Limited (BLC) and others set out the first judgment to consider termination of third party litigation funding agreements since the arrival of the Jackson reforms. Continue reading “No such thing as a free lunch – first judgment clarifies termination of third party litigation fund”

RBS investors secure litigation funding for action against bank

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Third-party funder Argentum has agreed to bankroll a multimillion-pound claim against The Royal Bank of Scotland (RBS) in London’s High Court.

The floodgates have opened for cases against RBS following its £20bn government bailout in 2008, as investors seek to recoup their losses following its nationalisation.

The group of 21 claimants includes a number of UK and international financial institutions and pension funds suing the bank over a rights issue in April 2008, in which RBS sold its shares at £2 per share. The claimants allege that the prospectus on which the rights issue was based was ‘defective’ and contained material misstatements and omissions. Continue reading “RBS investors secure litigation funding for action against bank”

Funding the fights

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With litigation funders having established their own industry regulator and starting to move into arbitration cases, there are more reasons to believe that third-party funding is here in a big way

Leslie Perrin, chairman of litigation funder Calunius Capital, remembers the atmosphere in New York during the autumn of 2008 when he was attempting to raise money for Calunius’s inaugural litigation fund. Tumbleweed was rolling down Wall Street and Citigroup’s share price was plunging by the second. It was an inauspicious time for raising capital.

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