As my colleague Louise Barretto has written here, the financiers who backed the ex-wife of a Russian billionaire in her High Court divorce battle have received US $103 million (£74.6 million) for their role in the high profile case.
Burford Capital, which funds claimants in legal disputes with the aim of taking a cut of any settlement, told the London Stock Exchange it has received “its full cash entitlement… in respect of the Akhmedov matter.”
The company revealed it expects the case will add 20 million dollars (£14.5 million) to operating profits this year. Burford funded Tatiana Akhmedova through London’s High Court, where a judge granted a divorce payout of about £450 million.
From Russia but living in London, she was awarded a 41.5% share of ex-husband Farkhad Akhmedov’s £1 billion-plus fortune by Mr Justice Haddon-Cave in late 2016. Mr Akhmedov did not pay and Ms Akhmedova took legal action in Britain and abroad in a bid to trace and seize his assets.
Burford Capital is one of a number of litigation funding firms who have grown in recent years as class action lawsuits become more common in the UK.
The Association of Litigation Funders has thirteen members, amongst them companies including Calunius, Harbour, Therium, Vannin Capital, Orchard, Assertis, Innworth and Augusta.
Reported via the Press Association here Therium Litigation Funding is currently backing a group of pension funds and asset managers who will find out shortly if they can form a group to launch proceedings against several big banks for allegedly fixing foreign exchange rates.
Insolvency Practitioners have been using litigation funders for some time now, with Manolete Partners PLC being one of the largest providers. Although we have not yet seen the full financial consequences of the pandemic, there can be little doubt that businesses and individuals may suffer, providing a possible need for insolvency funding.
We should also reasonably expect litigation funders to be circling numerous opportunities to prosecute cases against large corporations and or Private Equity investors who default on pre-pandemic promises.
Watch out also for class actions which are catnip for litigation funders. And why not? There have been many class action lawsuits that have reached billions of pounds in settlements. In 1998, Philip Morris, RJ Reynolds, and two other tobacco companies agreed to a US $206 billion settlement, at a minimum, covering medical costs for smoking-related illnesses.
In 2016, a federal judge in New Orleans granted final approval to an estimated US $20 billion settlement resolving civil claims over environmental damage from the Deepwater Horizon oil spill against BP.
Remember the scheme to cheat emission tests on its diesel cars? Volkswagen’s US $14.bn settlement provided funds for vehicle buybacks at market values prior to the scandal, plus additional cash payments for 475,000 diesel car owners.
There’s a long list here.
In the meantime watch this space for the next big case involving litigation funding. They’ll definitely be making headlines again soon.
The above is accurate as at 4 August 2021. The information above may be subject to change during these ever-changing times.
The content of this note should not be considered legal advice and each matter should be considered on a case by case basis.