A firm offering access to its own commercial litigation fund has successfully concluded its first case under the scheme.
Capital Law, based in Cardiff, said it was able to speed up the litigation process by cutting out external litigation funders for a claim against the Welsh government.
The firm set up the £50m fund in February for cases exclusively run by its own lawyers. The fee is priced on a case-by-case basis but the payout will usually be around 25% of the damages recovered.
The first case backed by the fund involved training company Fix and its claim against the Welsh government for withholding pay.
Fix could not afford to make its own case against the government, so pursued the multi-million-pound claim through Capital Law. The case was settled this summer through mediation.
Disputes partner Andrew Brown said the fund allows the firm to finance smaller cases previously ignored by other litigation funders and cut down the time required for funding decisions by external backers.
‘The costs and risks of realising that asset can be off-putting,’ said Brown. ‘Our fund enables us to remove those concerns by taking on the costs and risks ourselves.
‘We’re in a unique position of being able to fund the cases we believe in. By cutting out the ‘middle men’ of third-party financiers and insurers, we have the flexibility to fund cases quicker and cheaper than them.’
Capital Law says its fund, financed by private equity, insures the risk of having to pay the opponent’s costs, so there is no risk to clients.
The firm was an early adopter of third-party funding and used a hedge fund to finance a £100m case involving workers of the motorway services outlet Roadchef. The claim had been ongoing for 20 years before concluding in January 2015.