By utilising a highly disciplined, financial and risk-based approach to investments in law markets, managing director Richard Fields believes 2009 could put litigation funding as an asset class on the financial map.
Launched on the AIM market in December 2007, Juridica provides third-party litigation funding to law firms seeking capital for expensive commercial litigation. This consists of all commercial claims, except personal injury, and includes pension schemes embarking on class action-style cases.
Claim financing, as it is also known, is a popular phenomenon in Europe, with Allianz being a recognised partner for providing third-party litigation funding.
Using a robust underwriting process to select only those claims that are statistically likely to be won, Juridica claims to provide investors with an almost guaranteed positive return.
Law firms have historically tended to avoid litigation proceedings where the success of a case will generate less than a 30% internal rate of return.
Similarly, Juridica will only provide funding for cases that have passed its 30 to 60-day due diligence process, which includes assessing the lawyers involved, their previous case histories, the current legal environment and the potential length of the claim in question.
“We are a cash-driven business,” said Fields. “We pay dividends in sterling and our investments are made in US dollars. We’ve benefited from a currency gain this year, although that’s likely to change in the future.”
