National firm Pinsent Masons has agreed a £25m litigation funding facility with Augusta Ventures that offers clients a discount on the funder’s usual success fee.
Pinsent Masons partner Mark Roe, who is leading the firm’s work with Augusta, said they had negotiated “considerably better terms than our clients would typically receive from funders if we or they made an individual approach to the market”.
Funding will only be provided if Augusta and Pinsent Masons are satisfied that the majority of any sums recovered – after payment of Augusta’s funding costs and success fee, and any after-the-event insurance premium – will go to the client.
The funding is available at any stage throughout the life of the case – not just at the beginning – with due diligence managed by a joint committee with four senior representatives from each business.
Pinsent Masons lawyers are not required to use Augusta if they think another funder would be more appropriate, and the firm receives no commission or other payment from Augusta as part of this arrangement.
The close relationship between the two means the due diligence process will be quicker than usual, and funding is deployed in tranches based on key procedural and settlement milestones in the case.
In the event of a successful resolution, Augusta will be repaid the funds deployed, plus a success fee based on the amount of funds deployed at that time, rather than the overall commitment. The level of fee is dependent on the time taken to make a recovery. There is nothing for the client to pay if the case loses.
Mr Roe, Pinsent Masons’ head of international arbitration, said: “We know that the costs of pursuing a justified claim often deter our clients from obtaining justice and recovering money due to them.
“Often, even if clients have funds available, they prefer to invest them in their business rather than in pursuing claims. We wanted to address that problem. I believe our arrangement with Augusta will provide third-party funding to our clients efficiently, quickly, on clear terms and at lower cost.”
Augusta claims to be the largest general litigation funder in the UK by number of cases – having committed £162m of capital to 213 claims.
This represents a significant increase in just a year – at the point it announced an extra £150m in funding last July, it had committed £98m to 162 cases.
The company started off in 2014 focusing on small claims worth up to £1m that other funders were not interested in, but in 2016 moved into bigger cases as well after receiving backing from asset management business CQS.
It has a success rate of 79% and employs 70 people in London – making it one of, if not the, largest funder in headcount terms as well.
In other news, Nick Rowles Davies, executive vice-chairman of listed funder Litigation Capital Management (LCM), has been named chairman of the Commercial Litigation Association.
He is a well-known figure in the funding world, having previously worked for Vannin and Burford, and he then set up his own business, Chancery Capital, before joining forces with LCM last year.