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

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

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

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

Funding the fights

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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Suspicious minds

Suspicious minds

Third-party litigation funding has yet to really take off, despite being around for five years. While a mature market is still some way away, litigation specialists are finally seeing that self-funding is not the only way forward.

Big-ticket disputes in the public sphere and funded by a third party are rare. The biggest case in the UK to date came in 2008 and featured an £89m negligence claim brought by Stone & Rolls against audit firm Moore Stephens. The dispute was driven by Norton Rose’s Sam Eastwood for client Stone & Rolls and was funded by IM Litigation Funding. The case was thrown out by the House of Lords as part of its grand finale in 2009, gifting a massive victory to Barlow Lyde & Gilbert client Moore Stephens.

Continue reading “Suspicious minds”