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Capital is at risk and projected returns are not guaranteed. Investors have a significant risk of losing all of their investment if the case fails and could lose double their investment in the unlikely event that the case insurer also defaults.
Equity capital of £535,000 required to fund an unfair prejudice petition by Claimants who are the minority shareholders in a high-value housebuilding business against the majority shareholder in his capacity as the company’s main director. According to Counsel’s assessment, the claim for unfair prejudice is likely to enjoy strong prospects of success with probability in the region of 65-70% at trial. The business is performing well and we expect enforceability will therefore be relatively straightforward. The claim value is £3-5m+. The Solicitor is working with 50% of his fees contingent on the case winning ensuring strong alignment of incentives. If the case resolves favourably at 30 months after equity issuance, investors will potentially have an MoC of 2.8x. In addition, 53% of the invested capital is protected by investment grade ATE insurance cover. In the event the claim is unsuccessful, investors would limit their downside to c 47% net of the ATE cover.
Amount Raised: £279,500
Funding of up to £355,000 is required for the claim managers coordinating a group litigation claim with an estimated claim value of £180m+ against 2 retail banks for misrepresentations concerning fixed rate small business loans. The claim is already underway since May 2019 with over £12m of financing committed by another litigation funder to cover the costs of the actual litigation. A detailed opinion by a leading QC rates the prospects of success at trial at 60%+ (if the case does not settle pre-trial). The Company’s capital will be used to source additional claimants for the case and also to cover some of the overheads of the claims management team. The Company is acquiring a senior allocation of the claim managers’ share of the proceeds – ensuring good alignment with the veteran team coordinating the litigation. The solicitors and counsel running the case have c 30% of their fees contingent on a positive outcome. ATE cover of £16m has been put in place. If the case settles pre-trial, investors will have an estimated multiple on capital of 1.85x. If the case wins at trial investors will have an estimated multiple on capital of 2.51x. We expect that the case will be resolved within 2 years.
Amount Raised: £230,000
Date Funded: 03/08/2021
Equity capital of £130,000 is required to fund a Francovich claim against a European-based tax authority for discriminatory overcharging of VAT. The funding will be used to fund an appeal hearing of a strikeout judgment. According to the claimant’s top-ranked counsel, the strikeout judgement was flawed on several points of law. Counsel estimates a 60-65% probability of winning the appeal. If the appeal is successful, we believe the Defendant will seek to settle, rather than risk a trial with the potential of a successful ‘test case’ leading to follow-on litigation from large numbers of other claimants with similar facts. If no settlement is agreed, counsel estimates the probability of winning at trial would be 60-65%. This litigation investment has a favourable risk reward profile in our view: If the case succeeds at trial, we estimate investors will have a Multiple on Capital (MoC) of 10.0x. If the case settles more than 12 months after equity issuance investors will have a MoC of 8.2x. If the case is unsuccessful, investors are unlikely to recover any capital. On a probability-weighted basis, we estimate an expected-value of 3.4x the amount invested and an annualised IRR above 200%.
Amount Raised: £130,000
Equity capital of £140,000 required to fund a portfolio of three pre-vetted commercial litigation cases in the area of professional negligence and insurance. The solicitor running all three cases is highly experienced and only gets paid on each case if it wins. Approximately 80% of invested capital will be protected by an investment-grade ATE insurer - reducing the likelihood and magnitude of an overall negative investment return. If all three cases resolve favourably, the return is expected to be 49% per annum. Diversification increases the likelihood of a positive return. To illustrate, if only one or two cases resolve favourably at 24 months, we estimate that investors would still have gains of 12% and 45%, respectively. In the unlikely event that all three cases lose, net of the insurance cover in place, the total downside is limited to c 20%.
Amount Raised: £140,000
Date Funded: 26/05/2021
Capital required to fund a claim of software theft and copyright infringement. The case is supported by extensive electronic and CCTV evidence lodged with the police. The Claim value is estimated to be £5-10m based on the most recent investment rounds and the company’s operating performance. The Claim value is over 17x the cost to litigate. A detailed independent opinion by a senior lawyer identifies a strong basis to file the claim and a high probability of obtaining a favourable resolution. Our research indicates that the Defendants have sufficient resources to pay the damages. The lawyers running the case are experienced running this type of claim and are highly incentivised to achieve a positive outcome. Unless early settlement is reached, the Claim will be filed in the Barcelona Commercial Court. If the Claim settles pre-trial, investors are senior in the cash waterfall and contractually entitled to a Return of 66% per annum increasing until proceeds are received. If the Claim wins at trial, investors are contractually entitled to the greater of a Multiple on Capital (MoC) of 2.8x and an uncapped Return increasing at 66% per annum (33% for each 6 months of part thereof).
Amount Raised: £255,000
Date Funded: 17/05/2021
Equity capital required for a portfolio of 3 pre-vetted commercial litigation cases being run by an experienced solicitor, with net funding of £20,000 to £25,000 required for each case. The 3 cases are: a professional negligence claim against a solicitor; a construction contract dispute; and a breach of contract on a business sale & purchase agreement. The solicitor has significant ‘skin in the game’ only getting paid on positive outcomes and always after investors, ensuring good alignment. All the cases are fully funded through trial if necessary and each is 77% principal-protected by investment grade ATE insurance. In the unlikely event that all three cases lose, net of this insurance cover, the total downside is limited to 23%. Diversification increases the likelihood of a positive return: if only one case wins, depending on the time to settlement the portfolio is expected to generate an overall positive return of 0-21%. If all three cases win, the return on the portfolio is expected to be 51% per annum. Total funding required £91,000. The offer is fully underwritten.
Amount Raised: £91,000
Date Funded: 17/04/2020
Funding required for a pre-vetted professional negligence claim against a firm of solicitors and a planning consultant in connection with an application to install several wind turbines on some land in the North of England. The solicitors failed to identify the time limitation on the case and the planning consultant made an application which didn’t meet the basic requirements to even be considered by the Planning Authorities. The majority (88%) of the solicitor’s fees are contingent on a ‘Win’. Similarly, the insurance company, who have conducted their own due diligence, get paid their premium only if the case wins. The funding requirement of £70,000 is structured as an IFISA eligible bond with a coupon of 61% per annum (accruing quarterly) and with 83% of its principal guaranteed if the case loses against all the Defendants. If the case is resolved favourably, investors get all of their principal and interest before the solicitor or the claimant receive any of the proceeds.
Amount Raised: £70,000
Date Funded: 13/12/2019
IF ISA Eligible
It's alleged that a company director, through devious means, misappropriated a high-value property development opportunity for his own gain and to the significant detriment of the company and its other shareholders, enabled by a joint-enterprise conspiracy. Claim value £19m. Comprehensive analysis by senior barristers has identified ‘overwhelming’ evidence of breach of fiduciary duties and of joint enterprise conspiracy, including incriminating email correspondence between the defendants. The nine defendants have joint and several liability with significant property and business assets owned by the key defendants. Both the Claimant’s solicitor and QC barrister are on a Contingent Financing Arrangement (100% and 50% respectively). The insurers’ premium is also fully contingent on a case win. Bond return of 72%+ per annum for the first 3 years, IFISA-eligible.
Amount Raised: £487,583
Date Funded: 29/11/2019
IF ISA Eligible
Funding required to prepare a legal opinion on a high value employment dispute– in relation to non-payment of contractual commission entitlements. Claim value is conservatively estimated at over £10m. The Claimant verifiably sourced over $200m of institutional capital for the Defendant (a publicly listed company) who subsequently refused to pay without a valid justification. The Defendant has already made several preliminary attempts to settle and we believe has a strong incentive to do so once proceedings have been issued. Investors in this case can expect a return of up to 260% if the case is resolved favourably at any time. Investment grade insurance which will be put in place once proceedings are issued. A preliminary barrister’s opinion confirms that the case has strong merits. Enforceability is likely to be straightforward. The Claimant’s legal counsel are experienced top-ranked specialists in high value employment disputes. In due course there will be follow-on funding (at lower returns) for an additional £810,000.
Amount Raised: £40,000
Date Funded: 27/09/2019
Breach of contract: funding required to enforce an adjudication award against a developer against whom an award was made but who has failed to make any payment. The case is backed by an A- rated insurance company which is insuring the claim against adverse costs and also guaranteeing capital used for disbursements. Bondholders will receive up to 75% per annum if the case wins. If the case loses, bond holders are unlikely to lose more than 17% of their capital invested, due to the principal protection provided by the insurer. Both solicitor and insurer are being compensated on a no-win, no-fee basis, implying good alignment of interests. IFISA eligible.
Amount Raised: £12,000
Date Funded: 31/01/2019
IF ISA Eligible
Refinancing a bridge loan to fund the trustees of a pension scheme that are issuing a claim of professional negligence against a firm of solicitors that advised them on a property sale. The case is backed by an A- rated insurance company which is insuring the claim against adverse costs and also guaranteeing all capital used for disbursements. If the case wins, the expected return for investors is 60% to 65% per annum. If the case loses, the investors will lose no more than 21% of their capital invested, due to the principal protection provided by the insurer. Both solicitor and insurer are being compensated on a no-win, no-fee basis, implying good alignment of interests.
Amount Raised: £12,720
Date Funded: 18/01/2019
Limited availability of capital to date means investors have enjoyed attractive returns with IRRs as high as 30-35%
Case Return Simulator
Interactive model to calculate expected IRR.
The legal process normally creates a well defined duration for each investment - usually between 12-24 months, in contrast to the much longer term of typical private equity deals
Strong case review team: with a mix of professionals from both financial services and commercial litigation including lawyers named as ‘Leading Individuals’ in Legal 500 and Chambers & Partners
Rigorous case review process: combining both internal and external expertise to provide a highly objective assessment of each case thus minimising potential risks
Strict case selection criteria: detailed assessment of cases based on key factors such as their merits, economics, experience of counsel and enforceability
Extensive network within the legal sector: providing access to the broadest universe of cases with the most attractive investment opportunities
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