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An LFJ Conversation with Joshua Coleman‑Pecha, Senior Associate, Holman Fenwick Willan

By John Freund |
January 21, 2025

An LFJ Conversation with Joshua Coleman‑Pecha, Senior Associate, Holman Fenwick Willan

Joshua Coleman-Pecha is a senior international construction, infrastructure and technology dispute specialist working in the MENA region. He advises on construction and technology projects from inception to completion. Joshua is a qualified solicitor advocate, meaning he has rights of audience in the courts of England & Wales, and is a PRINCE 2 qualified project manager.

Joshua advises on all aspects of complex dispute avoidance and resolution. He has represented several clients in billion-dollar disputes before a variety of arbitral institutions including ICC, LCIA, UNCITRAL, DIAC, and SCCA. He has experience handling disputes under the governing laws of England & Wales, the UAE, Saudi, and Qatar.

Joshua’s recent significant work includes advising in relation to oil and gas processing facilities, drilling contracts (onshore and offshore), a water desalinisation plant, a battery energy storage park, the MENA region’s largest metro system, and a major railroad and metro project in the UAE and Saudi respectively. Joshua has experience of projects across the region having handled disputes in, for example, the UAE, Oman, Qatar, Saudi Arabia, Iraq, and Turkey. His clients include international oil & gas companies, refining and petrochemical companies, EPC contractors, oil & gas service companies, EPC employers, and international technology providers. Finally, he acts in a hybrid role as general counsel to a billion dollar pharmaceutical company based in the UAE.

Joshua was recently recognized as a ‘Key Lawyer’ in Oil, Gas and Natural Resources by Legal 500 2024. He is also a member of various construction industry associations and a contributing member of the Legal Funding Journal.

Below is our LFJ Conversation with Joshua Coleman‑Pecha: The MENA region, and Saudi Arabia in particular, is a growing jurisdiction in the global legal funding market.  What has hindered funders from embracing this market in the past, and why the change–what has prompted more funders to take an interest in this part of the world? 

I think there have been a few factors that have limited funders’ interest in operating in the Saudi market, or, financing disputes that involve Saudi law and / or Saudi Courts.

First, the high-level point is that legal funding is not prohibited under Saudi law. However, until now, in Saudi and across the GCC, whilst the view has been that written laws do not prohibit legal funding, there has been a high degree of uncertainty as to how, in practice, the courts would treat parties backed by legal funders. Quite understandably, legal funders and litigants have been hesitant to be the ‘test cases’ on which this issue is examined. To some extent I think this hesitancy remains, though it is decreasing as GCC countries refine their laws and legal practice, and legal funders look to the growing markets across the GCC for new opportunities.

Second, for many years Sharia has been the dominant system of law in Saudi. Sharia law is a huge subject, and it is impossible to consider all the aspects of it here. However, in summary, it is a combination of several different texts and is subject to several schools of legal interpretation. As with other GCC countries, Saudi is a civil law system, and does not rely on binding precedent. It may be that legal funders have been hesitant to make investments in an environment that they don’t feel they fully understand. However, in recent times, Saudi has taken significant strides towards codifying its laws. All GCC countries are on this path to a greater or lesser extent, which helps provide certainty. In addition, with better recording and proliferation of court judgments and legal knowledge across the entire market, my sense is that international investors are becoming more confident in these surroundings.

Third, all GCC countries have been signatories to the New York Convention for some time. However, recent years have seen an acceleration of arbitration across the GCC, as recognition of the jurisdiction of arbitral tribunals and willingness to enforce arbitral awards increases. In Saudi, part of the country’s ‘Vision 2023’ is to have the leading arbitral institution in the Middle East, and be considered one of the leading arbitral institutions worldwide. Saudi has implemented a new Arbitration Law, and the Saudi Center for Commercial Arbitration (SCCA) has received significant investment, allowing it to hire globally recognised practitioners to join its senior ranks. Its rules are based on UNCITRAL rules and were updated in 2023 to reflect the most modern sets of arbitral rules globally.

Fourth, through discussion with various funders, my understanding of their view is that investing in Saudi is outside their commercial risk parameters. Factors such as uncertainty over duration of legal proceedings, lack of knowledge of Sharia, and questions over enforcement have made it difficult to determine likely ROI. Certainty over enforcement of arbitral awards in Saudi is increasing and the reasons for this are discussed below / later.

Finally, from the perspective of a funded party, and bearing in mind a lot of these parties are contractors in the construction industry, I think there is hesitancy to use legal funding as it can wipe out profit margins.

You deal with the Saudi construction claims sector specifically. What is the TAM of this market, and why should litigation funders take an interest here? 

The market is huge. Focusing just on the projects sector alone, there are approximately USD 1.8trn of projects planned or underway in Saudi (USD 330bn of which are already underway), making it the largest market in the MENA region. Over the last five years, the Saudi projects sector has, on average, awarded USD 60bn of projects a year, which looks set to grow year-on-year to around USD 80bn by 2028.

It is impossible to accurately estimate the number or value of disputes emanating from these projects. Of course, arbitration is private, but also many issues or disputes will not come to light due to being settled through commercial negotiations. We do know that right now approximately 440 projects in Saudi are identified as being ‘on hold’ (which means there is almost certainly going to be some form of dispute arising) with a combined value of USD 231bn. As the number and value of projects approaching completion or achieving completion increases, I expect to see these figures grow.

How do claimants and litigators on the ground feel about litigation funding? How do they look at the practice from both an economic and cultural perspective? 

For the reasons discussed above, legal funding has yet to proliferate in GCC countries. My experience is that, at best, many legal advisors (both in private practice and in-house) and potential litigants have limited knowledge about legal funding and are therefore sceptical of its merits. At worst, these parties may not know anything about legal funding at all, or, have a misunderstanding of what it is about and how it can help. I believe that education is needed before legal funding can be considered ‘mainstream’ in this region.

Where legal funding may be better known is amongst international entities (like international contractors) operating in Saudi or the wider GCC. However, even where there more understanding as regards the concept and a willingness to consider it as an option, barriers remain. For example, contractors are often put off legal funding when the cost is revealed.

Construction disputes are often fact heavy, require a significant amount of analysis before funders can begin to assess the merits, and, if they go to trial, will require lengthy investment periods. All this means that funder risk goes up, so the required returns go up, which can seriously damage contractor profits. There’s little point in a contractor taking funding if it’s going to wipe out the contractor’s profit margin on the underlying project.

My personal view is that discussion between contractors and funders can yield a solution. On the one hand contractors may be persuaded to take funding based on a holistic view of its financial benefits. Portfolio funding may make taking funding economically palatable to contractors. However, also in my view, the greatest opportunity for striking investment deals lies in the fact that both employers and contractors tend to want to settle disputes at the earliest opportunity. If legal funders are willing to take this into account, it may shift the investment metrics sufficiently to make legal funding attractive to all parties.

What about enforcement in Saudi Arabia? How much of a concern is this, and what steps should funders take to allay their concerns about enforcement over a specific claim? 

The laws

Saudi has been signatory to the New York convention since 1994. However, its arbitration friendliness has increased massively in the last few years, including the creation of the previously mentioned SCCA in 2016. In addition, two key rules have been promulgated:

In 2012, Saudi passed KSA Royal Decree M/34 concerning the approval of the Law of Arbitration (KSA Arbitration Law) (together with its Implementing Rules) and in 2013, Royal Decree M/53 (Enforcement Law). The KSA Arbitration law is modelled on the UNCITRAL model law, which is regarded as international best practice.

The KSA Arbitration Law curtailed the Saudi courts’ interventionist powers in relation to arbitrations seated in Saudi Arabia by recognizing for the first time the parties’ autonomy to tailor their arbitration procedure in certain important respects, including by explicitly recognizing the adoption of institutional arbitration rules. The KSA Arbitration Law also addressed a key concern under the old law – the power of the Saudi courts to reopen and effectively re-litigate awards on their merits.

The Enforcement Law has led to the creation of specialized enforcement courts, whose jurisdiction supersedes that of the Board of Grievances (the court previously competent to hear requests for enforcement of arbitral awards). This in turn has started to have a salutary effect on the enforcement of foreign arbitral awards, which until 2017 was an uncertain prospect. The Enforcement Law contains provisions that affect all aspects of enforcement of judgments and arbitral awards, both domestic and foreign. In practice, the Enforcement Law has resulted in the unprecedented enforcement of several foreign arbitral awards, which is welcome development. It is hoped that the Rules supplementing the KSA Arbitration Law will help to provide more certainty around how the courts will apply the KSA Arbitration Law, including with respect to enforcement of arbitral awards.

Domestic Arbitral Awards

Domestic arbitral awards must comply with the KSA Arbitration Law. The Enforcement Courts have jurisdiction to enforce domestic arbitral awards under article 9(2) of the Enforcement Law. For a domestic arbitral award, it must be declared as enforceable by the appeal court with initial jurisdiction over the dispute. Therefore, an application is needed to the relevant appeal court for a declaration that the award is enforceable by the party seeking enforcement. The declaration is normally represented by a court stamp, after which the request for enforcement can be registered with the Enforcement Court.

Domestic arbitral awards that are enforceable include:

  • monetary awards
  • specific performance
  • sale or delivery of tangible and intangible property

Article 55 of the KSA Arbitration Law outlines the procedural and substantive requirements of a valid arbitral award. Pursuant to this provision, the competent court must verify the following conditions to issue an order for enforcement:

  • The arbitral award must not contradict other court decisions or laws on the same subject in Saudi Arabia.
  • The loser has been duly notified of the arbitral award.
  • The arbitral award must not violate Saudi public policy (Sharia). My understanding is that where the Saudi Courts have been confronted with an award where part of it contradicts Sharia, in some instances, they have been willing to strike out the unenforceable part and enforce the remainder.

Furthermore, the arbitral award must comply with the formality requirements of the KSA Arbitration Law and be compliant with Sharia principles. Article 49 of the KSA Arbitration Law states that an arbitral award is not subject to appeal. However, under article 50(1), a party may apply to annul an arbitral award issued on the following grounds:

  • “if no arbitration agreement exists, or if such agreement is void, voidable, or terminated due to expiry of its term;
  • if either party, at the time of concluding the arbitration agreement, lacks legal capacity, pursuant to the law governing his capacity;
  • if either arbitration party fails to present his defence due to lack of proper notification of the appointment of an arbitrator or of the arbitration proceedings or for any other reason beyond his control;
  • if the arbitration award excludes the application of any rules which the parties to arbitration agree to apply to the subject matter of the dispute;
  • if the composition of the arbitration tribunal or the appointment of the arbitrators is carried out in a manner violating this Law or the agreement of the parties;
  • if the arbitration award rules on matters not included in the arbitration agreement; nevertheless, if parts of the award relating to matters subject to arbitration can be separated from those not subject there to, then nullification shall apply only to parts not subject to arbitration; and
  • If the arbitration tribunal fails to observe conditions required for the award in a manner affecting its substance, or if the award is based on void arbitration proceedings that affect it.”

Furthermore, under article 50(2) of the KSA Arbitration Law, the court may, on its own jurisdiction, nullify the arbitral award if:

  • it violates Sharia or Saudi public policy; or
  • the subject matter of the dispute was not arbitrable, e.g., not capable of being resolved by arbitration, under Saudi law.

The application for nullification of the arbitral award must be made 60 days after the nullifying party was notified of the award.

Foreign Arbitral Awards

Foreign awards must comply with the Enforcement Law as well as the New York Convention for enforcement of foreign arbitral awards. For a foreign arbitral award, a party does not need a declaration that it is enforceable from the relevant domestic appeal court. Instead, the party requesting enforcement can apply directly to the Enforcement Court, with no statute of limitations applicable.

For foreign arbitral awards to be enforceable they must meet the following criteria:

  • The award must be a final award and must not contradict another judgment or court order issued on the same subject in Saudi Arabia, or contradict the public policy of Saudi Arabia.
  • Reciprocity must be established between Saudi Arabia and the jurisdiction in which the award is issued. The burden on proving reciprocity is on the party requesting enforcement.
  • The award must have been issued by a tribunal with jurisdiction under the relevant foreign law, and the subject matter of the aware, should not be under mandatory jurisdiction of Saudi Arabia;
  • All parties must have conducted the proceedings with all procedural regularities in place, with due representation If the respondent to the proceedings was notified, but was not represented, and this can be evidenced, such an award is still enforceable.

The Enforcement Court has jurisdiction to enforce foreign arbitral awards in accordance with the requirements of the Enforcement Law:

  • Saudi courts must not have jurisdiction to decide the dispute.
  • The tribunal issuing the award must have had jurisdiction over the dispute.
  • The arbitral proceedings were conducted in accordance with due process, e.g., the parties had fair opportunities to present their cases.
  • The arbitral award is final and not subject to appeal under the law of the seat of arbitration.
  • The arbitral award must not contradict other court decisions or laws on the same subject in Saudi Arabia.
  • The arbitral award must not violate Saudi public policy.

The New York Convention is considered the foundation for enforcing arbitral awards in a state other than where the arbitral award was issued (i.e., foreign arbitral awards). All arbitral awards not issued under the KSA Arbitration Law are considered foreign arbitral awards. Contracting states to the New York Convention must recognise foreign arbitral awards as binding and enforce them under their rules of procedure, and without imposing “substantially more onerous conditions or higher fees or charges” for foreign arbitral awards than the State would impose on domestic arbitral awards.

Process for Enforcement of Arbitral Awards

To enforce an arbitration award the application for enforcement must include:

  • “the original award or an attested copy thereof;
  • a true copy of the arbitration agreement;
  • an Arabic translation of the arbitration award attested by an accredited authority, if the award is not issued in Arabic; and
  • a proof of the deposit of the award with the competent court, pursuant to article 44 of KSA Arbitration Law.”

Article 6 of the Enforcement Law addressing all judgments and awards, states that all judgments issued by an Enforcement Court are subject to appeal and the court of the KSA Arbitration Law appeal’s judgment would then be final. However, for arbitral awards issued under the KSA Arbitration Law, article 55(3) of the KSA Arbitration Law does not allow appeal of an order to enforce an arbitral award. By contrast, an order refusing enforcement is appealable.

The enforcement procedure is as follows:

  • An enforcement request is made through the Najiz application (the Ministry of Justice’s online portal) is made by the applicant.
  • The request is reviewed procedurally by the Enforcement Court, and is then referred to an enforcement judge. This will require up to three days.
  • If the enforcement judge is satisfied, an enforcement order will be issued (Article 34 decision), ordering one party to comply within five days of the notice.

The applicant must wait twenty days for the Enforcement Court to notify the relevant party of the Article 34 decision. If this is not done, the applicant may request for the notice to be served by publication in local press, by the Enforcement Court. Although the applicant will initially pay for the publication of the notice (three to five days are required for publication from payment), the costs are able to be reimbursed from the enforcement order.

If the Article 34 decision is not adhered to, within five days of notification, the enforcement judge may be requested to enforce sanctions against the non-complying party. Such measures, under Article 46 are issued up to ten days after the expiry of the Article 34 decision or from the date of applicant’s request to issue an Article 46 decision, provided that the request is made at least five days after the Article 34 decision is notified. All decisions by an enforcement judge are final, unless they relate to certain procedures or costs.

Other Considerations on Enforcing Arbitration Awards

The public policy exception to enforcing foreign arbitral awards has traditionally been very broad. An award that contradicts Sharia law or public policy will not be enforced by the Enforcement Court. However, if the part that contradicts public policy can be separated from the rest of the award, only that part should not be enforced.

The Enforcement Law sets out that the enforcement judge cannot enforce a foreign arbitral award if it includes what is contradictory to public policy. The implementing regulations of the Enforcement Law defines “public policy” as the Islamic Sharia. Saudi Arabia Royal Decree No. 44682/1443 dated 28 August 2021 limits the definition of public policy to general rules of Islamic law based on the Quran and the Sunnah. Recently successful grounds were:

  • Late payment charges were found to amount to usury.
  • Compensation for holding back money was found to amount to usury.
  • The award involved the sale of property which the purported seller did not own.

Public policy is not limited to procedural deficiencies. The Saudi court can, of its own volition, refuse to enforce an award that contradicts Sharia, including any of the evidence relied on by the tribunal that is not acceptable under Sharia (for example, if the tribunal relied on the testimony of a person with a mental impairment). The court could also refuse enforcement if the award itself contradicts Sharia (for example, an award of interest).

Other Enforcement Mechanisms

Saudi Arabia is also party to Riyadh Arab Agreement for Judicial Co-operation and the GCC Agreement for the Enforcement of Judgments, Rogatory, and Judicial Publication.

One of the benefits of a more mature market is the presence of consultants, advisors and experts whom funders can rely on. How prevalent are such experts within the Saudi legal / litigation funding market?  What can funders do to ensure they are receiving reliable, actionable advice? 

Until recently, to participate in the Saudi market, international firms had to enter an alliance with a local partner firm. With the change of laws in this area, several international firms have now opened their own Saudi office, and HFW (the firm I work at) is one of those. This divergence perhaps causes some difficulty for clients seeking joined-up legal advice. Naturally, high quality Saudi firms focus on work in the local courts, where they have rights of audience. International firms are more likely to focus on international clients, working with contracts under foreign laws, with arbitration as a dispute resolution mechanism. In both cases, the proliferation of work requires additional legal practitioners, and this growth potentially comes at the cost of quality legal advice or, at least, relevant experience.

Of course, it is tempting for me to say that HFW should be every funder’s first call for Saudi related advice! The reality, as everyone knows, is that every dispute is different and requires different skill sets, sector knowledge, legal qualification(s), and price point. I’m sure it doesn’t really need to be said, as legal funders know their jobs better than I do, but I would always suggest seeking advice from firms and individuals who have wide experience in the jurisdiction, have advised on disputes in the relevant sector in that jurisdiction previously, and understand what legal funders need and want to be able to make their investment decision.

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John Freund

John Freund

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An LFJ Conversation with Elena Rey, Partner, Brown Rudnick

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Elena Rey heads the firm’s Litigation Funding group and is a co-head of the European Special Situations team. Elena represents funders, private equity funds, family offices, law firms and claimants on complex cross border litigation funding, investment & special situations transactions, and is recognised by The Legal 500 as a leader in the litigation funding space. Elena is a founder of the Firm’s annual European Litigation Funding conference held in London, as well as the Litigation Funding industry working group, which was created with the aim of preparing model documentation for the litigation funding market. Elena is also a co-author of the Loan Market Association book on real estate finance. Elena is admitted to practice in England & Wales. She holds a master's degree from Harvard Law School and is fluent in French and Russian. Below is our LFJ Conversation with Elena Rey: What was the driving vision behind launching the European Litigation Funding Conference, and how does this year’s agenda reflect the most pressing issues for funders and practitioners in 2025?  At the time there was no forum in Europe for funders and those connected to the litigation funding industry to come together and share ideas. Given our relationships and experienceon both sides of the Atlantic, it felt like a natural step for Brown Rudnick to launch a European conference dedicated to this nascent but growing industry. Our conference is an opportunity to bring together leading players across the litigation funding industry from around the world to discuss trends and developments in different jurisdictions, focus on deals in this space and their origination as well as share knowledge and develop networks. As an advisor to investors, funders and claimants on all matters litigation funding related, we have reflected the issues, opportunities, trends and strategies that we see day to day in the panels. From your perspective, what are the most significant developments in litigation funding across the UK and continental Europe over the past year, and how are those shaping the conversations you expect at the conference?  In the UK,  funders have had to contend with PACCAR and the risk of that decision to historic funding agreements. However, it is anticipated that the CJC recommendations will pave the way for a fix to be enacted that will provide reassurance and certainty for users of funding as well as funders themselves,  which has been lacking and an unnecessary distraction for an industry that is still nascent. Continental Europe is discovering the benefits of funding, slowly but surely, and there is a lot of focus on countries such as Spain, Germany, Netherlands, Italy and the Nordics. There are several promising developments in jurisdictions including in Spain which is looking to introduce opt out collective redress regime for consumers that won’t be possible without funding.  We are also continuing to see strong demand for funding in the Netherlands where the regime is more established. Regulatory reform continues to be a key topic in the sector—how will the conference address differing approaches in the UK, EU, and U.S., and what takeaways do you hope attendees will gain from that dialogue? We have thought leaders from the UK, EU and US who will be sharing their insights on the regulatory developments and potential headwinds facing funders, investors, law firms and claimants who are also impacted. The industry is evolving, and our conference has been successful because attendees gain fresh insights and perspectives from their peers and users of funding as well as investors. The panel discussions cover a broad range of topics. Which are you most excited about, and why?  This is an impossible question to answer for me and it’s our fantastic panelists that make the sessions compelling and very relevant every year. Panels on Group Actions, Law Firm Funding, and European Developments address the key structures and legal issues that are central to the industry and to advancing funded cases. The Private Credit Panel is also consistently one of the most engaging, given the strong interest we are seeing from private equity and distressed debt funds, family offices, and other sources of capital. It is particularly valuable to hear how multi-strategy investment funds view the litigation funding space and how they weigh its risk and return profile against other alternative asset classes Each year we try to include a more light-hearted panel. Last year it focused on the funding of cryptocurrency cases. This year we’ve added a panel called “Trouble” — looking at what happens when a hostile action is taken by one of the parties to a funding arrangement, when a dispute arises, or when some other unusual challenge puts both the funder’s experience and the robustness of the funding documentation to the test. Several recent high-profile deals that went through restructurings have brought these issues into the spotlight, so I expect this will be a particularly engaging panel For many attendees, conferences are as much about relationships as content. What unique opportunities will this event offer for funders, lawyers, and investors to connect and potentially initiate deals? It’s rare for a conference to bring together industry leaders from around the worldconsistently,  and that is the secret of this conference’s success and what is has a strong reputation for. Funders, investors and users of funding know this and that is why they attend, so yes, I expect a lot of deals will be originated at the conference. And because we are not a commercial conference organisation, we are completely focused on the quality of our content and all of our panels are carefully curated to tackle important subjects and panelists are invited because they have something important and relevant to say on that topic. We expect that like in previous years, it will be a standing room only event. -- Click here for more information on the European Litigation Funding Conference 2025.  The event will take place on Thursday, October 9th, and panel discussions will include: 1. State of the Market and Managing Regulatory Uncertainty 2. Private Credit Investment Interest in Litigation Funding 3. Portfolio Diversification and Law Firm Funding Strategies, Risks and Returns 4. Co-funding and Secondary Syndication Strategies 5. Group Actions Landscape - Recent and Upcoming Decisions that Impact Funding 6. Developments in the European Litigation Funding Market 7. Trouble - What Happens When Things Go Wrong & Value Loss Mitigation
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An LFJ Conversation with Robin Ganguly, Partner, CANDEY

By John Freund |

Robin Ganguly used to be a litigation funder and insurer, and is now a Partner at elite London disputes law firm CANDEY. Robin has almost 20 years of litigation and arbitration experience. He conducts a broad range of commercial, financial and insolvency disputes and has extensive experience of high-value international cases. Robin acts for large corporates and individuals alike, and is praised by clients for his commercial approach.

Prior to joining CANDEY, Robin spent almost 10 years at Magic Circle firm Linklaters, including secondments at investment bank clients, and four years at Bryan Cave Leighton Paisner, where he led the contentious insolvency practice alongside his broader commercial litigation role. Robin then spent time at litigation funder Burford Capital and in the litigation insurance industry at Aon and Fidelis. Robin is therefore uniquely well placed to assist clients looking to obtain funding and insurance for their disputes, and to advise on disputes in relation to funding agreements and insurance policies.

Robin speaks French, Italian and Spanish. He is qualified as a Solicitor Advocate and can appear himself for clients before the Higher Courts of England and Wales.

Below is our LFJ Conversation with Robin Ganguly:

CANDEY is involved in a wide array of high-value disputes. Can you share some insights into the types of cases that are most challenging or rewarding to work on?

We often work in collaboration with litigation funders to achieve access to justice for clients who have been defrauded and as a result of the fraud do not have funds to pursue expensive litigation. In those situations we use our deep experience of litigation funding and litigation insurance to put together the best structure for the risks in the case to be allocated among different stakeholders, which often means our firm taking on substantial fee risk.

One of our core practice areas is international trusts disputes. These cases are very challenging because they often involve arbitration and litigation in multiple jurisdictions, co-ordinating local firms, freezing injunctions and other emergency applications to attempt to secure assets for enforcement. These are all expensive processes which rely on a law firm (and sometimes litigation funders) to have faith and stand behind their clients for many years to avoid capitulation to the bad actors. When we achieve success in disputes such as these it makes all of the effort worth it.

With offices in multiple international locations, how does CANDEY navigate the complexities of cross-border disputes and international law?

Our cases often involve multiple offices (various of London, New York, BVI, Vienna, and we’ve got plans to open in Asia), and our ability to serve clients internationally is a key reason why clients come to us. In New York our team provides a transatlantic bridge between the US law firms with whom we co-counsel, and the CANDEY teams in other locations, but having one firm that’s able to take ownership of as many jurisdictions as possible ensures things run smoothly. Due to the way we are structured we are able to explore international contingency fee arrangements for clients, in a way that very few other firms can do.

Given CANDEY's focus on lawyers' rights and access to justice, what initiatives are you most proud of, and how do they align with the firm's values?

At CANDEY we believe that everyone should have the right to legal representation so that they can bring their arguments before a court of law. Many firms will refuse to act on certain cases where they fear “biting the hand that feeds them”, or cases where they do not like the potential impact of being associated with certain claimants or arguments, but we feel that if all firms took those views, clients would not be able to test and enforce their legal rights, with a corresponding chilling effect upon the English legal system more broadly.

CANDEY has been vocal in championing the rule of law and refusing, along with the Bar Council, to allow prejudice to prevent anyone from being represented before the Courts on the basis of their race, religion or nationality.

How has CANDEY adapted to the increasing prevalence of cryptocurrency disputes and financial crime, and what strategies do you employ to stay ahead in these evolving areas?

We have a well-established fraud practice and involvement with organisations such as CFAAR in the UK, and we have been seeing increasing numbers of cryptocurrency disputes. These sometimes concern fraudulent investment schemes and in those cases the catch is often obtaining a “book” of victims that is large enough and organised enough to make a case economically viable for a law firm or funder to back. Building the book costs money so it can be chicken and egg. Due to the international nature of cryptocurrency, the cases frequently involve competing claims on frozen assets by different states or prosecutors and therefore have a political dimension which can be difficult to predict.

What are your thoughts on the current landscape of legal funding, and how do you see it impacting the types of disputes CANDEY handles?

The litigation funding market in the UK is experiencing some challenges at the moment. As is the global litigation insurance market (other than ATE) following large losses on complex judgment preservation policies. That makes it increasingly important for law firms to be able to share fee risk, either alongside funders or where funding cannot be obtained. We get a large number of enquiries from clients looking to us to represent them in their cases, big and small, and we are able to use our experience of funding and insurance to be able to advise clients whether the case is likely to attract funding and/or insurance and to put them in the best position to secure it. When enquiries come in, my role can feel very similar to my previous role at Burford Capital: assessing the legal theory and case merits but also looking ahead to enforcement and whether the damages are likely to be large enough to make the case viable. In terms of case type, we always see plenty of shareholder disputes, contract disputes and trust disputes, and those types of claim have not seen the same souring of attitudes or aggregation issues among funders or insurers as, say competition cases.

LFJ Conversation

An LFJ Conversation with Kevin Prior, Chief Commercial Officer of Seven Stars Legal

By John Freund |

Kevin Prior has been sourcing funding for regulated Law Firms since 2019 and has over 30 years’ experience in investment structuring, principally in the Real Estate development sector. He was responsible for securing the finance line for a high profile UK GLO project, as well as assisting law firms in representing individual claimants in over 15,000 settled cases.

Before moving into the litigation funding sector, Kevin created and piloted a regulated crowdfunding firm and a specialist distressed property fund. He has a background in economics, which coupled with his vast commercial experience allows him to make clear assessments of prospective borrowing law firms from the outset of Seven Stars’ due diligence processes.

Below is our LFJ Conversation with Kevin Prior, CCO of Seven Stars Legal: 

What specific strategies does Seven Stars employ to ensure market-leading investor returns in the litigation finance sector?

Our view has always been that the key to successful litigation financing lies in the selection of cases or case types to fund, which is why we take the time to select cases that we believe offer the most secure route to a successful and profitable judgment, delivering results for the business and its investors.

Rather than funding class actions and other high-risk, high-return litigation, we work at the other end of the spectrum, specifically targeting precedent-based claims or claims brought under UK Government compensation schemes or Acts. This approach significantly reduces the risk involved and enables us to target ambitious returns and highlight the opportunity of our litigation finance solution as an alternative asset investment.

We insist on After The Event insurance cover on funded cases where cases may be settled in England or Wales or where a risk of adverse costs may exist. In addition, we only fund cases against liquid entities, such as banks or housing associations, or where claims go to organisations like the Financial Services Compensation Scheme, which exists in the UK to pay redress to clients when financial institutions or financial advisers fail.

Finally, at claim level, we establish minimum claims values for each specific case type, which as well as ensuring sufficient capital cover means that our investors can achieve a return, the law firm in question can run claims sustainably and, most importantly, that claimants get the compensation they deserve.

In addition, to help ensure liquidity and cash flow via coupon payments for investors, as well as for broader strategic reasons like risk mitigation, we follow what we call the 30/30 rule, meaning that we aim to have no more than 30% of our funds committed to a single law firm or case type, and as we continue to diversify our activities are fast working towards a balance closer to 9% - 11% as our maximum exposure in any one area.

Could you elaborate on the due diligence process Seven Stars undertakes when assessing legal claims, particularly concerning the solvency of defendants?

Our due diligence process is multi-faceted, covering our borrowing law firms at both the initial stage of signing a funding agreement, again when the law firm requests a drawdown of funds, and, if we’re funding a case type for the first time, a comprehensive review of the legal position and opportunity around such claims.

To assess whether a specific case type is suitable for funding, we review various aspects including the level of funding required, the potential returns, and sought independent counsel opinion on the claim or case type before making a decision as to whether to fund. The nature of our process means that it’s feasible we would identify that a claim type can generate a specific level of returns but would require too much funding for it to be viable, although likewise, case types that require very little funding may generate relatively small returns, meaning we wouldn’t fund those unless there was a high enough volume of claims to make it worthwhile for all parties.

To come back to the firms, while our partner law firms conduct their own robust due diligence as a prerequisite for their own business requirements, we conduct our own independent verification process. This ensures a second layer of security and aligns with our own stringent criteria, which apply to both the initial funding proposal as well as the specific request for a tranche of funding.

Then, when the borrowing law firm comes to us, we review all the case files for which they are seeking funding, checking their files include all the relevant and correct documents, and a verification of the case and claimant details, the latter being where we’d identify and ensure that the defendant is solvent. For each claim type, we have a strict list of criteria that must be met for us to commit funding to a specific case, so it’s possible that an approved law firm could request a drawdown of funds but we’d only provide funding for the claims that meet our criteria.

The level of due diligence we need to go into differs depending on the case type. For example, if a pension mis-selling claim is going to the FSCS we know that it will pay out, so we can focus less on the solvency of the defendant and more on the technical aspects of the claim and the likelihood of it succeeding.

All of these processes are subject to two levels of due diligence. The first level is our operational management team, who should they approve a specific case type or law firm after collecting and reviewing a substantial tranche of data then pass this information along with a recommendation to our Advisory Panel, which includes a highly regarded King’s Counsel. The Advisory Panel then reviews this information independently to make a decision on whether to fund a specific case type and/or provide funding to a specific law firm.

To further enhance our Governance structure as well as strengthen the level of independent oversight within our due diligence processes, we’re currently at the advanced stages of appointing an external auditor to conduct pre-lending and firm auditing due diligence processes, which will also give us further capacity to scale our due diligence pipeline, attract further investment, and distribute monies to approved law firms.

Can you describe the structure of the debentures or assignment of interests in fee income used to protect capital, and how the Security Trustee oversees this process?

Our Security Trustee sits external to the whole process, only getting involved on behalf of our investors if we were to default on our payments to them. So the Security Trustee would step in were we to default, and take action based on the debenture and floating charge they hold over all Seven Stars assets, which includes bank accounts, physical assets AND the debentures and fixed and floating charges we hold over our borrowing law firms.

As such we have two layers of structured security for our investors. There is what the Security Trustee holds over ourselves, but there is also what we hold over the law firms, which include fixed and floating charges over their assets, as well as the right to re-assign cases to another law firm in the event they default on their funding agreement with ourselves.

This is further supported by our ongoing risk mitigation and analysis that we conduct in relation to borrowing law firms, which includes our funding going into a segregated bank account within the law firm, conducting monthly management accounts and retaining bank account access, and conducting ongoing audits of the borrowing law firm’s claims book. We’re currently in the process of making our ongoing audits fully automated by introducing AI to conduct this process, while retaining a human, physical element and manually auditing up to 10% of the claims book we’re funding with each law firm per month, depending on borrowings, the claim type, and other factors.

Given the company's experience in funding over 56,000 litigation cases, what key lessons has Seven Stars learned about risk management and successful case selection in the litigation finance market?

While we have comprehensive governance and risk mitigation strategies in place that inform all we do, our most significant learning – and one that we continue adapting to as we go – is the importance of having room to be agile and flexible in our approach to funding different case types and law firms, which is predominantly led by the 30/30 rule that I explained earlier.

I’ve outlined a little about our case selection process and due diligence earlier, but what I’d add to that is one thing we have picked up on is that there’s often an appetite from investors to commit funds even if a legal picture isn’t 100% clear. And to that end, it’s vital that we continue to monitor and are active in specific sectors even if there’s little to no movement in them. A good example would be business energy claims, where we had committed funding prior to an adverse decision handed down in early 2024, which was subsequently overturned by a later hearing. They key here is that we didn’t overexpose – we were nowhere near 30%, for example – and so were able to continue operating and supporting the borrowing law firm even while the legal picture was unclear.

We’ve seen similar recently in car finance claims – we know of one funder that committed around 80% of its lending book to such cases in 2024, but that cash is now tied up until probably March 2026 at the very earliest, when compensation payments look like they’ll commence. In contrast, we’ve been more cautious around this case type and are awaiting final legal and regulatory decisions before committing to an approach.

An excellent example of our approach to risk management succeeding can be seen in our acquisition of the non-legal assets of Sandstone Legal earlier this year. Sandstone Legal were a firm that we had previously provided funding for and had passed all our usual due diligence checks, but for various reasons continued to face financial difficulties. Our funding agreements ensured that we were able to acquire those cases through the firm’s insolvency and assign them to new law firms to run them to completion, many of which have already started generating returns for our investors. All of this was done with Solicitors Regulation Authority oversight, enabling us to act quickly and help cases to move forward quickly to the benefit of the claimants involved.

With the industry under sustained regulatory pressure, what should be the industry's response to those who want to regulate it out of existence?

The regulatory picture in the UK is still evolving. In June, the Civil Justice Council published its Final Report into third-party litigation funding, which called for minimal regulation where funding is provided to a commercial party and “greater, but still light touch” regulation where funding is going to a consumer or where funding is for a collective action.

Most notably, the CJC called for the reversal of the PACCAR ruling to happen as soon as possible, while the Court of Appeal also subsequently handed down a ruling that supports the litigation funding sector.

With all that being said, against this background there’s a significant opportunity for funders in different areas of the market to speak up, highlight what they do, and educate across the legal services sector as well as those who do seek to introduce stringent regulation.

One thing we’re passionate about and try to address in our content is that a lot of commentary around litigation funding is fairly narrow and exclusively focused on funding in the context of class actions. Now, when you consider stories like the Mastercard collective action where there’s been controversy between the funders and the lawyers and claimants are likely going to walk away with a negligible sum of money, it’s understandable that people will look at that and say litigation funding may cause problems.

But what we do is at the other end of the market, focusing on smaller, individual, mostly precedent-based claims that have a real impact on someone’s life, and collectively on society as a whole. There’s genuine difference-making on a human level in our approach that often isn’t discussed or even considered when talking about regulating the sector and making it difficult to provide funding.

Think the social housing tenant waiting months for repairs when their health is suffering, the pension mis-selling victim who doesn’t know if they can look forward to their retirement, or the bereaved spouse who wants to grieve but is facing an inheritance dispute. These are people who get the financial justice they deserve because Seven Stars and other funders lend a law firm money to run a specific case.

There are real people behind these stories and case studies, and as an industry we owe it to these people to highlight the impact litigation funding can and does have on their lives, rather than allowing the narrative of funding being a cash cow for funders and lawyers to proliferate.