Law firms are using third-party litigation funding to sue other solicitors for professional negligence, a specialist litigation funder has revealed.
Augusta Ventures said three-quarters of the 56 cases it has funded since last year are for breach of contract or professional negligence – with more than half of the latter brought against solicitors.
Some 41% of claims have been for breach of contract, with 32% (18) funding professional negligence claims, of which 10 have been against solicitors.
The company targets litigation valued under £1m and has committed £12.8m in its first full year, with between £7,000 and £570,000 invested per case.
Augusta, which has stated its commitment to publishing financial figures, says it has an overall win rate of 93% so far and an average award of £689,958. The funder has said in the past it receives on average around 20% of net proceeds of a successful case.
More than 400 law firms have expressed interest in working with Augusta and the funder is working with 43 of them.
Jeunesse Edwards (pictured), the company's engagement director, said there is demand for funding from both individuals and businesses, with an even split between the two in cases taken up.
‘This is not big business suing each other for paper money – it is about people who need help to enforce their rights so as to keep their businesses afloat or a roof over their heads,’ she said.
‘Litigation funding puts legitimate pressure on the defendant – it says that the funded party will not be bullied simply because of the costs being racked up.’
A breakdown of where Augusta’s funding goes shows that 32% has been for counsel, followed by solicitors (27%), disbursements (21%) and after-the-event insurance (20%).