Capital Law – the Cardiff-based practice that earlier this year became the first law firm to set up its own litigation fund  – this week announced that the first case backed by the £50m pot settled on favourable terms.
The firm is backed by an unnamed hedge fund and they share profits.
It supported a claim brought by Fix Training against the Welsh government over non-payment of invoices.
In a statement, Fix directors Helen Jones and Jacqui Niven said: “Our contract with the government was the main focus of our business, and being starved of cash made it impossible for us to fight a costly battle through the courts. Luckily for us, Capital had faith in our claim…
“Without the litigation fund, we would not have been able to unlock our claim. Our opponent had deep pockets, but the backing of Capital’s fund gave us financial muscle and access to justice that we would not otherwise have had.”
Capital Law disputes partner Andrew Brown said the fund enabled the firm to cut out the “middle men” of third-party financiers and insurers. “We have the flexibility to fund cases quicker and cheaper than them. This enables us to finance smaller cases previously ignored by other litigation funders and to fund larger litigation more competitively than ever before.”
Capital Law said the inspiration for the fund came the Roadchef case that senior partner Chris Nott worked on for nearly 20 years.
In early 2015, the Roadchef Employee Benefits Trust settled its £100m claim against their former CEO, who had acquired shares held for the benefit of workers and subsequently sold them for £28m. The Roadchef employees were supported by Harbour Litigation Funding.
In that case, the original budget/funding requirement was £1.1m and the realistic damages recovery was over £26m, although eventually the claimant costs came it at £2.4m. Harbour admitted  after the case settled that it should have spent more time working with the claimants and their lawyers in building contingency into the original budget.