Therium Funds Multi-Billion Pound Action Alleging Truck Cartel Price Collusion 

For those litigation funders who achieve great success with their investments in meritorious claims, the financial returns can create the foundation for a long-term strategic growth. However, with the inherent risk at play in any legal funding enterprise, there will always be funders who do not survive in the market.

Reporting by The Law Society Gazette provides an update on the status of the collapsed litigation funder, VFS Legal, with administrators having reportedly been able to pay back millions of pounds to the company’s creditors by recovering loans taken out by law firms. 

In the last six months, administrators have reportedly been able to return £3.9m to VFS’ one secured creditor, resulting in a total of £22.2m in payments made to investor OBS. In addition to these sums paid to the creditor, administrators have also fully repaid £74,000 to preferential creditors. Finally, unsecured creditors who were owed a total of £9m have been given a final dividend of 5.34p on the pound.

Alvarez & Marsal Europe LLP, as the firm appointed to handle the administration of VFS, have reportedly accumulated £284,000 in time costs, with their final fees expected to exceed the starting estimate of £1.5 million.

As LFJ covered in August 2023 when VFS Legal had confirmed the appointment of administrators, the funder had reportedly provided £150 million in funding to support over 25,000 cases across the last eight years, with law firms including Slater and Gordon having previously received funding. However, by 30 June 2022, VFS reportedly owed £38.7 million in repayments within the following year, primarily comprised of a bank loan for £35.6 million.

A decision handed down in the High Court earlier this week has demonstrated the potential value for funders in securing the assignment of a claim, providing the funder with more control over the litigation, and when a claim is successful, a direct return on investment through any eventual damages.

An article in Legal Futures covers the ruling from the High Court, where litigation funder Henderson & Jones has been awarded £2.15 million in damages in the case of Henderson & Jones Ltd v Salica Investments Ltd & Ors. Henderson & Jones took assignment of a claim by Tony Gifford in December 2021, a software inventor who had accused his early-stage investors of misusing confidential information shared in private meetings to develop their own software application. 

As a result of this breach of confidence, Mr Gifford claimed that he had been unable to secure funding from other investors, as Salica Investments and Dominic Perks had created competition through their own business. Mr Justice Calver’s ruling found in favour of Gifford’s claim, stating that it was “clear that Mr Perks stood to benefit personally financially from the misuse of the confidential information.”  Notably, the size of the eventual £2.15m award was made by the judge without any input from expert witnesses for the defendants, as they had failed to deliver expert reports prior to the deadline. 

Henderson & Jones’ managing director, Piers Elliott, provided the following comment on the judgment: “We’re very happy with the outcome and are delighted to have been able to assist Mr Gifford, who has been fighting for justice for many years.”

Hugh Sims KC and Jay Jagasia from Guildhall Chambers represented Henderson & Jones, instructed by Cardium Law Limited.

The full ruling from Mr Justice Calver can be read here.