Trending Now
Commercial Fundraising

Litigation Capital Management Limited Positive Update on Fund I Investment

By Harry Moran |

Litigation Capital Management Limited (AIM:LIT), an alternative asset manager specialising in dispute financing solutions internationally, announces a positive development on an investment within its Fund I portfolio.

LCM has funded a claim advanced in respect of an international arbitration claim brought against the Republic of Poland under the United Nations Commission on International Trade Law (UNCITRAL) Rules. The Tribunal has unanimously held in favour of the funded party that the Republic of Poland breached its obligations under the Australia-Poland Bilateral Investment Treaty and the Energy Charter Treaty.  

The quantum of the award entered in favour of LCM’s funded party totals A$490 million plus interest.

LCM’s funded party has therefore been successful in the claim. If the award is not subject to challenge and is not satisfied the dispute will move to an enforcement stage. We will assess any further funding requirements once the enforcement strategy has been finalised.

The total investment into the case to date is A$16.6 million (US$11.3 million). This investment comprises A$4.2 million (US$2.8 million) from LCM’s own balance sheet and A$12.4 million (US$8.5 million) of third party capital from Fund I. In line with our usual practice LCM’s returns are calculated as a rising multiple of invested capital over time.  

This investment is no longer attended with liability and quantum risk as that has been decided. Final performance will be announced to the market after conclusion of the investment. However, if the award is satisfied within a reasonable period without the need for enforcement, then based upon the contractual terms with the funded party as at the date of this announcement, LCM would be entitled to a multiple of 6 times its own invested capital plus significant performance fees on third party capital invested. 

Patrick Moloney, CEO of LCM, commented: “This announcement represents a very significant milestone in this investment. Subject to any challenge to the very favourable and unanimous award we now move to an enforcement stage. This investment is part of Fund I and therefore stands to benefit from significant performance fees giving it the potential to be the most successful investment in LCM’s history.”

About LCM

Litigation Capital Management (LCM) is an alternative asset manager specialising in disputes financing solutions internationally, which operates two business models. The first is direct investments made from LCM’s permanent balance sheet capital and the second is third party fund management. Under those two business models, LCM currently pursues three investment strategies: Single-case funding, Portfolio funding and Acquisitions of claims. LCM generates its income from both its direct investments and also performance fees through asset management.

LCM has an unparalleled track record driven by disciplined project selection and robust risk management. Currently headquartered in Sydney, with offices in London, Singapore, Brisbane and Melbourne, LCM listed on AIM in December 2018, trading under the ticker LIT.

www.lcmfinance.com

Commercial

View All
Commercial Regulatory Issues

International Legal Finance Association (ILFA) Welcomes New ELI Report – ‘Principles Governing the Third-Party Funding of Litigation’

The International Legal Finance Association (ILFA), the global voice of commercial legal finance, has welcomed the findings of the newly published European Law Institute (ELI) report ‘Principles governing the third-party funding of litigation’. 

The report, authored by UK High Court Judge Dame Sarah Cockerill and Professor Susanne Augenhofer, is the product of more than two years of investigative work to develop principles and guidance for the TPLF market, and represents a new, independent contribution to the legitimate and effective use of TPLF. 

Following the publication of the report, Neil Purslow, Chairman of the Executive Committee of ILFA, commented:

‘This new report, authored by seasoned legal observers, recognises that commercial legal finance increases access to justice for European businesses and consumers and provides ‘vital improvement in access to justice’ (pg.19) when made available. Contrary to the repeated claims of big business, funding helps level the playing field for those exercising their rights against multinationals with almost unlimited resources’. 

The report also cautions against imposing new regulations on the TPLF market. Instead, it advances a ‘complementary approach’ involving guidance to funders on issues to be taken into account before entering into a TPLF agreement, together with publishing a new Appendix drawing together the recommended minimum content of a funding agreement.

Purslow commented: 

‘ILFA agrees with the report’s conclusion that proscriptive one-size-fits-all regulation isn’t appropriate for a sector like ours. It risks funders ceasing to offer funding, inevitably leading to what the authors rightly identify as ‘serious access to justice issues’.’

The full report from ELI can be read online here. 

About ILFA

The International Legal Finance Association (ILFA) represents the global commercial legal finance community, and its mission is to engage, educate and influence legislative, regulatory and judicial landscapes as the global voice of the commercial legal finance industry. It is the only global association of commercial legal finance companies and is an independent, non-profit trade association promoting the highest standards of operation and service for the commercial legal finance sector. ILFA has local chapter representation around the world. For more information, visit www.ilfa.com and like us on LinkedIn and X @ILFA_Official. 

About ELI 

The European Law Institute (ELI) is an independent non-profit organisation established to initiate, conduct and facilitate research, make recommendations and provide practical guidance in the field of European legal development. The ELI secretariat is hosted by the University of Vienna, Austria.

The report team was led by Susanne Augenhofer (Professor of Law, Austria), Dame Sara Cockerill (High Court Judge, UK), and Henrik Rothe (Professor of Law, Denmark) (until July 2022). 

Read More
Commercial Regulatory Issues

NJ Appeals Court Rules Funding Agreements are Not Loans

By Harry Moran |

As the litigation funding industry has matured and the practice become more commonplace across the US legal system, most contentious debates revolve around issues of transparency or funder control over lawsuits. However, a recent complaint in New Jersey attempted to argue that a series funding agreement should be considered loans, only to have both the trial and appeals court reject these arguments in their entirety.

An article in Bloomberg Law highlights a decision handed down by the New Jersey Superior Court Appellate with the court ruling that litigation funding arrangements do not constitute ‘loans’ under state law. The ruling arose out of three funding agreements entered into between Covered Bridge Capital (CBC) and plaintiff Christine Ivaliotis between 2016 and 2019, before Ivaliotis filed suit against CBC claiming that it had engaged in “fraudulent lending practices and impermissibly purchasing an interest in prejudgment personal injury proceeds.” The appeals court affirmed the original trial court’s decision, which dismissed Ivaliotis’ complaint “because plaintiff has not shown she sustained a compensable "ascertainable loss" as the result of a CFA violation by CBC”.

The court’s ruling considered the plaintiff’s assertion that funding agreements were loans and therefore required the funder to be licensed by the Department of Banking and Insurance, with the court stating clearly that “this premise is wrong.” The appeals court cited federal precedent and noted that the “distinction between loans and the proceeds of litigation funding agreements has been judicially recognized.” In the damming conclusion to its ruling, the court found that Ivaliotis “lacks standing to call herself an "aggrieved consumer," both as a matter of law, a matter of equity, and common sense.”The full decision from the New Jersey court can be read here.

Case Developments Commercial

Parabellum Capital Funding ‘Daniel’s Law’ Cases in New Jersey

By Harry Moran |

Whilst there is constant debate and discussion over the level of transparency and disclosure that should be required for the involvement of litigation funders in cases, the state of New Jersey is demonstrating how these rules work in practice after a plaintiff disclosed that it anticipated using litigation funds in an ongoing series of lawsuits.

Reporting by Reuters highlights a recent court filing in the United States District Court for the District of New Jersey, where the plaintiff, Atlas Data Privacy Corporation, informed the court that it would soon be using funding provided by Parabellum Capital. The litigation funding was secured by Atlas Data Privacy to support over 140 lawsuits that it has been assigned and brought against businesses who have allegedly breached New Jersey’s Daniel’s Law, which allows public officials to protect against the release of their personal information to the public.

In its filing to the court, Atlas Data Privacy said that as New Jersey’s rules on funding disclosure “requires that a statement be filed promptly following the use of third-party litigation funds”, and because the firm “anticipates utilizing such funds shortly”, it was filing the letter to comply with Local Civil Rule 7.1.1. The two-page letter does not provide many details of Atlas’ funding arrangement with Parabellum Capital but confirmed that it was “non-recourse financing provided to Atlas, collateralized by litigation proceeds”. Unsurprisingly, the letter also confirmed that “the funder’s approval is not necessary for any litigation or settlement decisions in these actions.” 

Reuters’ article also includes comments from spokespersons for both Atlas and Parabellum, with the funder’s spokesperson saying that it was acting as “a passive financial partner of Atlas, which is playing an important role in enforcing compliance with one of the most meaningful privacy laws on record.”Atlas’ letter of disclosure to the court can be read in full here.