HARBOUR VIEW N e w s a n d O p i n i o n s f r o m T h e H a r b o u r Te a m
2015
Q1 Issue focus‌ litigation funding in practice
In this edition of HARBOURVIEW we mark the raising of Harbour’s new £230m investment fund by focussing on litigation funding in practice. Using two case studies, we consider our investment criteria and lessons learned in relation to actual disputes Harbour has funded – one successfully and one unsuccessfully. We also provide our usual insight into funding-related issues.
CONTENTS
p3 Roadchef a Harbour success story Thwaytes v Sothebys the risks p5 inherent in litigation Funding the business p7 Litigation of law and the law as business
p9 Coventry v Lawrence an update Justice Coulson gets tough p1 1 Mr on costs in the TCC Assignment of claims under p13 the FSMA to funders HARBOURNEWS… in brief p14 p15 and finally…
HARBOURVIEW
Roadchef a Harbour success story Harbour’s funding led to a successful settlement for low paid employees who otherwise would have missed out on their entitlement under their employee share option scheme. The BBC news story on this case can be found here. Background
Harbour’s investment criteria
This case, which was referred to Harbour in 2010, concerned the 1998 transfer of shares in Roadchef plc (Roadchef) between two trusts, EBT1 and EBT2. EBT1 operated an Employee Share Ownership Plan (ESOP) for the benefit of Roadchef employees. EBT2 was used to provide share incentives to Roadchef’s senior management.
We consider 4 key criteria every time we review a case that is referred to us:
The claim was brought by the Harbour funded claimant, Roadchef Employee Benefits Trustees Limited, (REBTL), a subsidiary of Roadchef and the corporate trustee of EBT1. The defendants were Mr Timothy Ingram Hill and the trustees of EBT2, which included Mr Ingram Hill and his wife, Sarah.
• The ratio of funding required to realistic damages recovery on success (economics)
• The legal merits of the case (merits)
• The experience and expertise of the claimant legal team (legal experience) This is how our criteria looked in relation to the Roadchef matter: • Recoverability: the defendant was a high net worth individual with the majority of his assets based in the UK
www.roadchef.com
The central case concerned the circumstances in which the trustees of EBT2 granted options over the shares to Mr Ingram Hill personally, who was, over time, Roadchef’s managing director, chairman and chief executive.
• The financial position of the defendant (recoverability)
HARBOURVIEW
3
• Merits: leading counsel, Nigel Jones QC of Hardwicke Chambers, advised that the case had good prospects of success • Economics: the original budget/funding requirement was £1.1m and the realistic damages recovery was over £26m, amounting to significantly more than the 1:10 ratio Harbour look for when considering economics • Legal experience: the legal team consisted of entrepreneurial solicitors, Capital Law in Cardiff, and a very experienced counsel team with trusts expertise In addition: • The legal team advised that the likely duration of the case to commencement of trial was 2 years, with an expected trial duration of 5-7 days • The claimants were what might be considered more typical candidates for litigation funding, in that they were the trustees of a trust with severely depleted assets with no ability to self-fund complex legal proceedings. That said, today, Harbour now finds itself funding large corporates who under constant pressure to reduce legal costs, are now using funding as a no cost way for them to pursue valuable claims
‘The legal team advised that the likely duration of the case to commencement of trial was 2 years.’ Outcome • The case was successful at trial, with damages awarded above £26m. The defendant appealed but settled prior to the appeal hearing, making a substantial payment to the claimants • Actual claimant costs were £2.4m (a budget change of 118% from the original £1.1m) • The actual case duration was 4 years (with a trial duration of 16 days)
Nigel Jones QC
Lessons learned Win or lose, it is important that we carefully consider what we have learned from each case we invest in. In this case: • We should have spent more time working with the claimants and their legal team in building contingency into the original £1.1m budget. We now have a substantial and very valuable body of data on all cases we have funded that allows us to work with legal teams in better anticipating likely turns in the road on cases that we fund • The claimants lacked litigation experience. This is not a criticism, in that the majority of people litigate only once (if that), but we should have identified the need for greater assistance and support from the legal team in helping the claimants to make key decisions throughout the course of a major case • Because the claimants were trustees, our funding arrangements required court approval. This should have been dealt with at the outset of the case, rather than at the end as actually occurred. We now have considerable experience of securing court approval for funding wherever it is required, in multiple jurisdictions
Comment This case is a Harbour success story. It demonstrates our long-term commitment to cases and the value of funding to claimants with a strong case but no funds to pursue it. Without Harbour’s funding this result would never have been achieved. However, whether a case is a success or a failure, it is essential for our development as funders of highly complex and expensive litigation and arbitration that we analyse, dispassionately, areas for improvement in everything that we do. In short, we must look backwards as well as forwards. The most important lesson that we learn, on every case we fund, is that setting a realistic budget for cases such as this, while difficult, is not impossible. This case was funded under our first investment fund, where on average our cases have concluded 18% over budget. We believe it is a measure of our discipline and willingness to look backwards that cases under our second investment fund are concluding at only 2% over budget. For our new, third, investment fund, we will strive to conclude all cases within budget.
4 HARBOURVIEW
Thwaytes v Sothebys the risks inherent in litigation Harbour’s funding enabled an impecunious individual to bring a complex professional claim against a major auction house, defended by a heavyweight legal team. Although unsuccessful, the case has allowed us to learn valuable lessons. Background This case was referred to Harbour in 2011. It concerned a professional negligence claim against Sotheby’s relating to a painting believed, by some, to be an autograph work by Caravaggio. In 2006, the claimant, Mr Thwaytes, was the owner of the painting. He had inherited it from his first cousin once removed, Surgeon Captain Thwaytes. Surgeon Captain Thwaytes had been a collector of art and porcelain and, in 1952, had sold to the Metropolitan Museum of Art in New York a painting of ‘The Musicians’ which was painted by Caravaggio. The painting in question in this case was ‘The Cardsharps’. The Kimbell Art Museum in Fort Worth, Texas holds what is believed to be the original work. Mr Thwaytes wanted to know whether the painting he inherited might be an autograph replica of the Kimbell Cardsharps painted by Caravaggio himself. He consigned it to Sotheby’s for research and advice, and they advised that it was a 17th century copy by an anonymous artist. Mr Thwaytes sold the painting through Sotheby’s auction for £42,000. The purchasers were Sir Denis Mahon, a well-known Caravaggio scholar, and his friend. Sir Denis Mahon subsequently identified the painting as a real Caravaggio, and it is currently on display in the Museum of the Order of St John, London, insured for £10m (inclusive of a £2m undertaking to indemnify from the UK government pursuant to s.16 of the National Heritage Act 1980).
Harbour’s investment criteria This is how our criteria looked in relation to the Thwaytes matter: • Recoverability: the defendant was a major auction house and able to meet the claim if successful • Merits: leading counsel, Henry Legge QC of 5 Stone Buildings, advised that the case had good prospects of success
HARBOURVIEW
• Economics: the original budget/funding requirement was £1.4m and the realistic damages recovery was £10m, amounting to a 1:7 ratio • Legal experience: the legal team consisted of art litigation specialists, Boodle Hatfield, who had a track record of success in claims of this nature
‘Mr Thwaytes wanted to know whether the painting he inherited might be an autograph replica of the Kimbell Cardsharps painted by Caravaggio himself. In addition: • The legal team advised that the likely duration of the case to commencement of trial was 2 years, with an expected trial duration of 5-7 days • The claimant was a classic candidate for litigation funding, unable to self-fund complex legal proceedings against a well-resourced defendant represented by a magic circle law firm
Outcome • Mr Thwaytes was unsuccessful at trial, and decided not to appeal. Mrs Justice Rose ruled that Sotheby’s were not negligent in their assessment of the painting • Actual claimant costs were £2.3m (a budget change of 73% from the original £1.4m) • The actual case duration was 2.5 years (with a trial duration of 18 days).
5
The Cardsharps – Caravaggio (1571–1610)
Lessons learned In this case: • We learned that if the realistic damages in a case are less than 10x the realistic costs of prosecuting the case, there is a greater risk of unhappiness all round. We have repeat experience from this and other early cases we have funded of damages declining and costs increasing, leading to tension even if the case is successful. In this case, the legal team was on a CFA (not at our request) and it eventually became apparent that even if the claimant did win, it was unlikely that he would receive much of the proceeds due to our funding terms and the CFA uplift/success fee. Presented with this case today, we would likely decline to fund it based on the economics • Sotheby’s was represented by a magic circle firm. In the Directions Questionnaire, they estimated their costs at £1.5m. This estimate was later increased to £2m, and then £3m at the Pre-Trial Review. The defendants are now asserting that their actual costs amounted to approximately £3.8m. As with the Roadchef case that is the subject of our first case study, we should have spent more time working with the claimants and their legal team in building contingency into the original £1.4m budget • We purchased ATE insurance of £1.5m in accordance with the defendant’s estimate in the Directions Questionnaire. As the case progressed, we had to buy two lots of top up insurance. We were able to do this because we are a repeat buyer of significant insurance cover, but buying insurance late in proceedings can be problematic (and expensive)
• Art litigation depends heavily on the judge’s impression of the piece of art in dispute. This is the first art case we have funded. We will fund others, but in the knowledge that in practice if the judge is sceptical of the magnitude of the points made by claimant’s experts in relation to the artwork, this will have a negative impact on the outcome. In this case, the judge found that although Sotheby’s owed a duty of care to the claimant to carry out reasonable investigations into the painting, the features the claimant claimed should have signalled that further investigation should have been carried out were not present. As such, although the painting may or may not be by Caravaggio, Sotheby’s had discharged its duty and the claim therefore failed.
Comment This case illustrates the risks inherent in litigation, and in litigation funding generally. A very experienced and able legal team brought a well-managed case to trial. They believed it would be successful. So did we, and as with all cases we fund, we assessed the merits of the case at numerous key stages in the litigation. Ultimately, no matter that all cases we fund are advised to have strong prospects of success, and that through our own independent due diligence we believe the prospects are strong, some of those cases will be unsuccessful. When that happens, we have to write off our entire investment and move on. But not before considering what we have learned from the experience.
6 HARBOURVIEW
Litigation Funding the business of law and the law as business This is an update on an article printed recently in The Lawyer by Nigel Jones QC, the joint head of Hardwicke Chambers and a member of Harbour’s Investment Committee. The days when it was somehow not proper for a lawyer to talk of profit have receded and the era in which it was suggested to me that I was bringing the Bar into disrepute by describing it as a service industry is passed. In their place, the requirement to accept the business of law and the need to see law as business have been accommodated and our High Court and our arbitration organisations are seen as the vehicle for generating significant invisible exports. There is perhaps no better example of this progression than third party litigation funding.
‘…the last 20 years have seen progressive acceptance of businesses engaged in the funding of litigation for a share of the profits on success’
Such funding has undergone a metamorphosis: at the extremes, from being illegal to making an essential contribution to providing access to justice. The law had long since accommodated the provision of legal costs funding by unions, trade organisations and insurers (both in the form of specific legal costs insurance and as part of defendants’ liability insurance). But the last 20 years have seen progressive acceptance of businesses engaged in the funding of litigation for a share of the profits on success and this progression has occurred side by side with permission to lawyers to take risks and receive reward from the fruits of success.
HARBOURVIEW
At its best, the business of third party funding can be a force for good in providing the only route to the courts and yet it still has the power to shock. Two recent cases highlight the contrast. The trustees of an employee share option trust brought their claim (against the company CEO to whom the trust’s shares had been wrongly transferred) successfully to the Chancery Division only because of the support of professional third party funders: see Roadchef (Employee Benefits Trustees) Ltd v Hill [2014] EWHC 109 (Ch) in which the successful claimants were funded by Harbour Litigation Funding. A rather different impression emerged from the Commercial Court case of Excalibur v Texas [2014] EWHC 3436 (Comm).
7
The claimant brought proceedings for damages put at $1.6bn. Their solicitors entered a discounted CFA. The own-side costs and the security for costs were entirely funded by a number of businesses who invested in the litigation for what they hoped would be considerable profit. The numbers are not for the faint-hearted: a total of £31.75m invested (£14.25m for claimant’s own costs and £17.5m for security for defence costs) with potentially hundreds of millions of profit. In the event, the Judge found the case to be so hopeless and to have been run so inappropriately that he dismissed the claim and awarded indemnity costs. The security proved inadequate and there was a shortfall of about £4.8m (which was “mostly and perhaps entirely” the difference between standard and indemnity costs).
In Arkin v Borchard [2005] 1 WLR 3055 the court recognised two competing principles governing costs concerning a professional funder: costs should follow the event and the professional funder should be liable; the policy consideration of ensuring access to justice. The solution was to hold the professional funder to a liability for the other side’s costs to the extent of the funding he provided. In Excalibur the court held that (i) the funder’s liability could extend to indemnity as well as standard costs even though the funder was (himself) innocent of any of the conduct which gave rise to the indemnity award, and (ii) the Arkin cap could include funds made available for security for costs.
‘The security proved inadequate and there was a shortfall of about £4.8m (which was “mostly and perhaps entirely” the difference between standard and indemnity costs)’.
The funding industry in the UK is now subject to voluntary regulation. The Association of Litigation Funders (‘ALF’) has been formed by the established UK funders and they have adopted a code of conduct and have already shown a preparedness to exercise control over members. Lord Justice Jackson accepted litigation funding as making a valuable contribution to justice and the formation of ALF was supported by the Civil Justice Council. The Code of Conduct includes capital adequacy requirements and regulates the way in which the claimant receives independent advice about the funding terms and preserves the conduct of the claim in the hands of the claimant and his legal team and regulates the circumstances in which a funder may withdraw.
Comment Both sets of funders in Excalibur sought permission to appeal, which was heard on 3 February 2015. Lord Justice Clarke granted permission on two main grounds: a) w hether or not he was right to order the funders to pay indemnity costs in circumstances where they did not themselves conduct the litigation and were not responsible for the discreditable conduct; and b) w hether the Arkin cap should include sums provided by funders as security for costs. He highlighted that these questions were of wider importance than the confines of the Excalibur case.
8 HARBOURVIEW
Coventry v Lawrence an update The Supreme Court has now finished hearing the appeal in Coventry v Lawrence. We consider the current position. The Supreme Court heard the residual part of the appeal in Coventry v Lawrence on 9th, 10th and 12th February. The underlying appeal concerned a nuisance case where the trial judge found that (a) the respondents were liable in nuisance; and (b) the respondents should pay 60% of the appellants’ costs. The appellants’ costs at first instance were made up of three different parts: (i) the base costs of £380,000; (ii) a success fee of approximately £319,000, to which the appellants’ lawyers are entitled because they provided their services under a conditional fee agreement; and (iii) the after the event (ATE) premium of approximately £350,000 for the insurer who covered the appellants’ potential liability to the respondents for their costs if the respondents had won.
In its judgment in July 2014, the Supreme Court declined to order that the respondent pay the success fee or any ATE insurance premium and adjourned the matter for the Secretary of State to be notified so that they, and other interested parties, could make representations. The Secretary of State and 7 other interveners (which included the Law Society and the Bar Council) addressed the seven judge Supreme Court on whether parts of the costs regime introduced by the Access to Justice Act 1999 (now repealed and replaced by provisions of Part 2 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012), and in particular a claimant’s right to recover any success fee and ATE insurance premium from an unsuccessful opponent was compatible with the European Convention on Human Rights.
john j. klaiber jr / Shutterstock.com
The respondent raised the argument in the part-heard appeal last year that a claimant’s right to recover any success fee and ATE insurance premium from an
unsuccessful defendant breached their right to a fair trial as enshrined in Article 6 of the European Convention on Human Rights and was also an unjustified deprivation of property contrary to Article 1 of the First Protocol to the Convention.
HARBOURVIEW
9
The importance of the appeal was clear: as Lord Neuberger explained in the decision handed down after the part-heard appeal last year ([2014] UKSC 46 at [43]): “a determination by a United Kingdom court that the provisions of the 1999 Act infringed Article 6 could have very serious consequences for the Government. Although the Strasbourg court would not be bound by the determination, it would, I suspect, be likely to agree or accept that conclusion, so that those litigants who had been “victims” of those provisions could well have a claim for compensation against the government for infringement of their Article 6 rights.” Unsurprisingly, judgment has been reserved following the hearing on 9th, 10th and 12th February.
‘…ATE insurers would want to re-visit the funding arrangements in place.’ The impact of the decision could be far-reaching. If it is decided that a declaration of incompatibility is the appropriate remedy, then the consequences for concluded and open cases is significant. For concluded cases, this could entitle any party that has paid a success fee or an ATE premium to seek to set aside a settlement agreement on the grounds of mistake and/or to appeal any costs order and/or to claim compensation from the Government. In addition, for those pre-1 April 2013 cases which are still being run with CFAs and/or ATE insurance, a declaration of incompatibility would mean that solicitors, barristers, ATE insurers would want to re-visit the funding arrangements in place. Cases which would otherwise have continued to a successful conclusion might collapse because legal representatives and ATE providers withdraw from their agreements. An alternative remedy would be to read the 1999 Act as well as the Civil Procedure Rules and the Costs Practice Directions in a way which is compatible with the Convention rights. The impact of any change to the way that success fees or ATE premiums are awarded for future cases could have uncertain consequences and invite more satellite litigation.
Alexandra Thompson / Shutterstock.com
Comment It is not known, at the time of writing, when a judgment is likely to be handed down by the Supreme Court. However, there can be no doubt that the Supreme Court are aware of the need to deliver its judgment quickly given the need for certainty. This certainty is required by litigants that have used CFAs and taken out ATE insurance policies before 1 April 2013, as much as by solicitors, barristers and ATE insurers who have backed their cases.
10 HARBOURVIEW
Mr Justice Coulson gets tough on costs in the TCC In CIP Properties v Galliford Try [2015] EWHC 481 (TCC) Coulson J has cracked down on disproportionate and unreliable costs budgeting. Where the claimant had a costs budget greater than all of the five other parties combined, the judge made an order limiting the costs recoverable on assessment to a level he believed to be reasonable and proportionate. At a costs management hearing in October 2014, the judge found that notwithstanding the fact that the case exceeded the threshold under which he must order costs budgeting (ÂŁ10 million under the present regime), it remained within his discretion to order such budgets to be produced (CIP Properties v Galliford Try [2014] EWHC 3546).
visitbirmingham.com
The substantive claim concerns alleged defects at a large development on the site of the former children’s hospital in Ladywood, Birmingham. The claim against the main contractors, Galliford Try is in the region of £18 million, and there are 4 additional parties to the claim, being sub-contractors and consultants.
HARBOURVIEW
11
The parties subsequently exchanged budgets, however the claimant’s budget was significantly higher than all of the others. The level of incurred costs to date (£4.28 million) was almost equal to the most expensive budget of any of the other parties to take the case through to trial, with a projected spend of a further £5 million. All this, despite the fact that the claim was ‘relatively straightforward’, with little need for a lengthy chronological bundle. Following a further hearing in February, the judge concluded that the level of the claimant’s budget was plainly disproportionate, and that the manner in which the budget had been prepared and presented was wholly unreliable. In his view he therefore had four options available to him:
‘…the level of the claimant’s budget was plainly disproportionate, and that the manner in which the budget had been repared and presented was wholly unreliable.’
(1) to order a new cost budget; (2) to decline to approve the claimant’s cost budget (as he did in Willis v MRJ Rundell & Associates Limited & Anor [2013] EWHC 2923 (TCC)); (3) to set budget figures going forward; or (4) to refuse to allow any further costs. His verdict was that only option (2) was workable, albeit a modified approach was required. For each phase of the litigation, the judge determined a figure for costs (incurred and prospective) which should not be exceeded on detailed assessment.
To the extent that the claimant recovers more than the amount he approved on assessment in respect of its incurred costs, the prospective costs he approved will fall to be reduced by an equivalent sum. When the figure he has approved for costs had already been expended on a particular phase, the costs management order going forward was £0. The result was that the total figure for assessed and approved costs was £4.28 million for the whole action, equivalent to the amount of costs the Claimant had incurred to date.
Comment In the hearing, the judge had indicated that given the level of the costs incurred by the claimant to date were in line with what he thought reasonable for the whole action, he was minded to go with option (4) and refuse to allow any further costs. As he identified however, the potential difficulty with that option is that the defendant might then subsequently seek to substantially reduce the incurred costs at assessment, and the claimant would be doubly penalised. By coming to the solution that he did, the judge artfully avoided this pitfall, whilst still limiting the overall recoverable costs. There are two further important lessons in costs budgeting to take away from the decision. First, that wide ranging assumptions and contingencies in a costs budget may alone render it uncertain and unreliable, and should therefore be avoided. The judge considered in this instance that the assumptions in the claimants’ budget undermined the whole budgeting exercise, which was intended to achieve certainty. Second, that in certain cases complexity rather than claim value is the overriding factor in determining proportionality. The judge considered that it might cost £300 thousand or £30 million to remedy a defect, but the expert evidence necessary to prove those defects would be the same, regardless of the value of the claim.
12 HARBOURVIEW
Assignment of claims under the FSMA to funders In Connaught Income Fund, Series 1 v Capita Financial Managers Ltd & Anr [2014] EWHC 3619 the High court confirmed that the assignment of claims by private persons under s138D Financial Services and Markets Act 2000 (the “FSMA”) is permissible. The decision suggests that private persons, who would otherwise not be in a position to bring their claims (due to, for example, lacking the funds to do so), are allowed to assign those claims and thereby gain compensation indirectly. The case considered assignment of the claims of over 1,000 retail investors, who subscribed around £75 million of capital, to the liquidators of the Connaught Income Fund. In the underlying claim, the Fund sought compensation from the Fund’s operators on the basis that they unlawfully promoted the Fund to the investors, some of whom became partners in it (in breach of s238 and s214 FSMA) and that they were responsible for misleading marketing materials. The claim was brought by the fund in its capacity as legal assignee of the claims under s138D FSMA. S138D allows that a contravention by an authorised person or a rule made by the FCA is actionable “at the suit of a private person” who suffers loss as a result of the contravention. A contravention by an authorised person is also actionable by a person who is not a “private person” if: 1. That person (A) is acting in a fiduciary or representative capacity on behalf of another (B); 2. Any remedy would be exclusively for the benefit of B; and 3. Any remedy could not be effected through an action brought otherwise than at the suit of A. The defendants argued that those conditions were not met because: recoveries would be pooled as an asset in the winding up rather than being for the benefit of each assigning investor; the investors could bring the claims themselves; and the assignment of the claims
HARBOURVIEW
was a bare attempt to circumvent the criteria and should not be allowed on public policy rationale. The claimant argued that there were two separate issues at work here. First, as to who enjoys a cause of action under s138D. Second, whether that cause of action is assignable. It argued that s138D is only concerned with the former. The fact that it only conferred rights on a limited class of persons did not impose either an implied statutory bar on assigning claims outside that class, or imply that proceedings brought following those assignments were an abuse of the court. The judge held that the wording of S138D did not remove the claimant’s right to assign their claim, and that where Parliament intends to exclude such a right, it is able to say so clearly.
Comment Although the position was considered in the context of liquidation, assignment was not limited to this context: in theory any private person could assign their claim to anyone else who was willing to bring proceedings against the relevant authorised person. The case therefore appears to open the door to litigation funders and hedge funds accepting assignments of FSMA claims against financial institutions that have breached their obligations.
13
HARBOURNEWS… in brief Peter Rees QC of 39 Essex Chambers has joined our Investment Committee. Peter, who was formerly Legal Director of Royal Dutch Shell and Head of Global Dispute Resolution at Norton Rose, will join our monthly meetings alongside Robert Howe QC (Blackstone Chambers), Nigel Jones QC (Hardwicke Chambers) and Harbour founder Martin Tonnby. As our case load continues to increase and with rising international demand which now includes cases funded in 12 jurisdictions as well as an increasing number of funded arbitrations, Peter’s global litigation, arbitration and in-house experience adds a further dimension at the right time. We are delighted to welcome him to the Harbour team. Susan Dunn has been representing Harbour at a number of international events recently. She was a speaker at Ireland’s first Litigation Funding & Insurance Conference on 4 March. She was asked to join a panel at a seminar on 9 March organised by the ICCA and Queen Mary University London jointly created Task Force on Third-Party Funding in International Arbitration held at Frankfurt University. Following this Susan headed for the Far East where she gave presentations to a number of law firms and was part of a panel discussion on Effective Business Models for the Provision of Legal Services in International Arbitration – Evolution or Revolution at the CIArb Centenary Celebration conference in Hong Kong. Rocco Pirozzolo presented a webinar on recent developments in funding litigation and was the moderator in a panel session on costs and funding options at the IBC’s annual Solicitors’ Costs Conference. Rocco has also published the article ‘DBAs – where do they stand?’ on the Law Society’s Civil Justice website. Matthew Knowles joined the Harbour team at the start of the year as a Director of Litigation Funding. Matthew, who has managed high value complex disputes in over 20 jurisdictions, joins from BHP Billiton where he was the senior disputes lawyer for the northern hemisphere. Before that he was at Norton Rose LLP specialising in international arbitration with a particular focus on the energy and financial services sectors.
14 HARBOURVIEW
and finally… Legal Business On 11 March, we hosted a Legal Business Roundtable event entitled ‘Litigation Funding – Lifting the Veil’, for 20 lawyers and counsel. We explored the funding decisions behind two actual Harbour cases, and between us we debated a range of issues including costs management, DBAs in practice and how funding works in international jurisdictions. There was particular interest in the rationale behind the rapid take-up of funding in Australia and we were able to share our experiences of our current Asia Pacific case load. The May edition of Legal Business will include a feature and a pdf version will be available.
Harbour Lecture
FROM BARRETRY, MAINTENANCE AND CHAMPERTY TO LITIGATION FUNDING 8 May 2013
For our third Harbour Lecture we have secured two distinguished speakers, Lord Dyson, Master of the Rolls and Lord Justice Jackson. They will deliver a talk entitled ‘Confronting Costs Management’. The lecture will be held on 13 May at Gray’s Inn Hall from 17:30. This is a ticket-only event so please contact us if you would like a place.
THE HARBOUR FUNDING PROCESS A PROMPT TRANSPARENT PROCESS
INTEREST ALIGNMENT
1. INITIAL CASE ASSESSMENT Check case meets investment criteria • Merits • Economics Review information and provide feedback within 48 hours
• Legal team expertise Execute Common Interest and Confidentiality Agreement
4. SUBMISSION TO 4. INVESTMENT COMMITTEE Meets monthly
2015 FEB
MAY
JUN
SEP
MAR APR JUL
AUG
OCT NOV DEC
2. LETTER OF INTENT Sets out proposed pricing and other terms
• Recoverability
JAN
RECOVERING VALUE COST-EFFECTIVELY
Packs submitted one week ahead
Provides period of exclusivity to conclude agreement
3. DETAILED DUE DILIGENCE Undertake defendant asset review Refresh or seek second legal opinion and valuation report Analyse costs estimate
Pack includes € £ $ A$
£
• Case analysis • Budget • Financial analysis • Other relevant documents
5. INVESTMENT COMMITTEE MEETING ED
APPROV
85% of submissions approved
Interview key lawyers and witnesses Perform background check on claimant Issue draft Investment Agreement
6. INVESTMENT AGREEMENT Signed after approval Effectiveness may be conditional
HARBOURVIEW
Harbour Infographic For clarification on Harbour’s funding process we have a new infographic available. The two-page A4 explains what happens from the first case enquiry through what to expect once funding has been agreed and includes expectations of our Investment Committee. A copy is available on request.
15
For more information please go to www.harbourlitigationfunding.com or contact Susan Dunn or Stephen O’Dowd on 0207 220 2370
Harbour Litigation Funding Limited 5th Floor East, 180 Piccadilly, London W1J 9ER
www.harbourlitigationfunding.com