Litigation…..A New Investment Vehicle?
By: Ainsley Brown
It is unquestionable that litigation is big business for lawyers, especially in complex commercial matters.
The billable hours that can be racked up can be astonishing – and unlike popular belief is not largely due to an over inflation in the billing procedures of lawyers, though no doubt this can be an issue for some at times but is rather the result of the litigation process itself (pleadings, motions, discovery, delaying tactics, etc). The ever increasing costs of litigation have forced many a meretricious claim not to be perused simply out of economics – a wholly unacceptable state of affairs.
What if there was a way to externally fund your claim, just like how you would find an investor to fund the start-up or expansion of a business?
Enter three enterprising UK lawyers and you get not only funding for litigation but a potential investment opportunity as well. George Brown, John Byrne and Neil Purslow know a good opportunity when they see one. This is why they launched Therium, a third party litigation fund which intends to invest between £100,000 and £5 million per case with an expected return of 250% on its investment. The fund will be commercial litigation and arbitration focused.
Moreover, Therium intends to raise £50 million by going into the capital markets and with a potential 250% rate of return it should be very attractive to many investors, institutional and individual alike. Given that London is a leading centre for the settlement of commercial disputes, Therium is posed to reshape the business dispute resolution scene in England.
However, while the concept of third party litigation is no longer a crime or a tort in England and Wales since 1967 it is still frowned upon in many circles. It is true that maintenance, the intermeddling of third parties that have no interest in the outcome of a case and champerty, the maintenance of a case with a view for profit, might have been abolished long ago but their influence on the English legal profession remains very strong.
Times they are however changing; the establishment of Therium is proof positive of this.
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