Commercial firm looking to cut out brokers names three to litigation funding panel

Harrison: Better value for clients

A commercial firm in Hertfordshire has appointed three litigation funders to a pioneering panel aimed at cutting out brokers’ fees and making smaller cases viable for backing.

Debenhams Ottaway, based in St Albans, has named Therium Capital Management, Sparkle Capital and Ferguson Litigation Funding following a tender.

The firm said the aim of the panel was “to open up litigation funding for more claims by cutting out the middle man, simplifying the funding process and developing longer term relationships with funders”.

The panel covers claims up to £5m in value but its aim is to unlock many claims worth £1m or less by making them suitable for funding.

As well as funding for individual cases, the firm intends to work with the panel of funders to develop schemes for particular types of litigation including office holder claims, professional negligence and intellectual property disputes.

Debenhams Ottaway’s head of litigation, Luke Harrison, said: “There is much more competition amongst funders now and, whilst funders quite rightly need to maintain prudent underwriting criteria, there are ways to streamline the process.

“Equally, there are ways litigators, with a little more focus, can reduce the costs of litigation. Where these efforts converge, it generates better value for clients.”

Launching the tender earlier this year, Mr Harrison told Litigation Futures that the cost of brokers could make the difference in deciding whether a claim was viable.

“A broker will get a percentage commission on the return the funder is going to achieve. For claims from £500,000 to £1m, once lawyers’ fees are taken into account, things can be quite tight as to whether they are viable.”

Mr Harrison gave the example of a claim for £1m, which settled at £750,000 shortly before trial. With legal fees of £150,000 for solicitors outside London, a litigation funder might be looking for a return of between £300,000 and £400,000 – a “large chunk” of damages.

Meanwhile, Woodsford Litigation Funding has become the first major funder to establish a presence in Israel with the appointment of Yoav Navon, who joins from Tel Aviv law firm Ron Gazit.

Steven Friel, Woodsford’s CEO, said: “We are already funding a number of Israeli parties in high-stakes litigation, and we see real potential for growth – particularly in the areas of intellectual property litigation and international arbitration.

“The Israeli tech sector in particular has many start-ups that come up against large multinationals in US and European litigation.”

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