A Cardiff-based commercial practice has become the first UK law firm to create its own litigation fund.
Capital Law has secured a £50m fund – backed by private equity investors – to offer financing direct to clients and eliminate third parties from the process.
Senior partner Christopher Nott (pictured) said the fund, exclusively for cases run by the firm, has a simple premise to allow businesses to take on claims without the risk of financing it themselves.
If the claim is won, the fee is priced on a case-by-case basis, but the payout will typically be up to 25% of the damages recovered. Fees will be staggered to reflect risk and encourage quicker recovery.
‘As it is controlled and managed by us, it ensures that all decisions are taken quickly and costs involved within a business’s litigation claim can be covered,’ he said.
Capital Law says it will consider revisiting ‘written off’ cases that are up to 12 years old.
The firm was an early adopter of third-party funding and used a hedge fund to finance a recent £100m case involving workers of the motorway services outlet Roadchef. The claim had been ongoing for 20 years before concluding in January 2015.
Nott added: ‘Twenty years ago it was impossible to finance litigation and the easiest thing for everyone to do would have been to settle it cheaply.’