UK litigation funders holding record £2bn of assets on balance sheets

Elliott: Funders launching new strategies to originate cases

The value of the pipeline of court cases and cash held by the top UK litigation funders has increased to a record of £2bn, City law firm RPC has reported.

The figure for 2019/20, based on assets held on balance sheet, was only marginally ahead of the year before but represents a doubling in just three years, however.

Geraldine Elliott, head of RPC’s commercial litigation group, said: “The challenge for litigation funders is to find high-quality legal disputes to fund and maintain a broad enough pipeline of cases so that earnings don’t become too volatile and lumpy.

“We are seeing funders launch new strategies to originate cases and being more creative about where they deploy capital.”

The firm said growing areas where funders were looking to build their portfolio of cases included the enforcement of large international arbitration awards as well as insolvency once government support for businesses during the pandemic falls away and restrictions on insolvency activity, such as the moratorium on winding up orders, are lifted.

RPC identified funding cases on behalf of businesses that have suffered because of anti-competitive behaviour were a continued growth area too, especially with more group action-style cases that gave funders “more opportunities to achieve the size of settlement from one action that their investors are looking for”.

Meanwhile, Apex Litigation Finance has unveiled a partnership with Maxima Litigation Finance to exclusively fund a scheme run by an unnamed third party generating 200-plus cases a year.

Apex will provide litigation funding and Maxima after-the-event insurance to the scheme, which they said comprised “commercial litigation cases in a specialised area”.

The scheme would also provide ‘spin-off’ litigation to which Apex and Maxima will have the first option on backing too.

Maurice Power, CEO of Apex, said the deal would make the company “one the highest volume providers of litigation funding solutions in the UK”.

Maxima co-founder Mark Andrews added: “Our client needed a litigation funding and ATE solution bespoke and built from the ground up, Apex offered that willingness and skill to work together to build a solution.”

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