How Litigation Finance is Helping David Beat Goliath?
Kazakhstan Kagazy is one of the Central Asian country’s only paper recycling and cardboard production companies. When Tomas Mateos Werner became its majority shareholder in 2009, the firm was in severe distress: it owed $110 Million to creditors, and according to Werner was “hollowed out by frauds” but thanks to Litigation Finance firm Harbour Litigation Funding, Werner has been able to bring a case against the firm’s former CEO that would otherwise have proven too costly to pursue. The lengthy, expensive trial could lead to a payout of close to $260 Million, a real boon for Kazakhstan Kagazy, whose assets total $40 Million.
Litigation Finance is leveling the playing field for the Kazakhstan Kagazy’s of the world, via unparalleled capital infusion. In 2017, Litigation Finance investors raised £10 Billion worldwide. Buford Capital, one of only two publicly traded litigation funders led the charge with a record $1.3 Billion invested during the calendar year. According to Burford’s CEO Christopher Bogart, we are witnessing the modernization of the legal industry, as it shifts from a cash-only business model towards more complex financing deals. “We’re leading the economic transformation of the legal industry,” Bogart says. The brash CEO is quick to point out instances where his Litigation Finance firm has upended the traditional legal paradigm.
Indeed, the industry is making justice more accessible to the world over. It is providing David a bevy of slingshots in battle after battle with Goliath. Yet that hasn’t stopped regulators the world over from sounding alarm bells. Former UK Justice Minister and Tory Peer Lord Faulks QC contend that litigation funding is “parasitic.” For the most part, lawmakers have been welcoming of Litigation Finance as a means to enable parties’ access to the justice system. After all, you can’t win cases with money, you can only contest them, and Litigation Finance allows individuals and businesses to contest cases that they otherwise would not have the resources to pursue.
Which brings us back to Kazakhstan Kagazy, Harbour Litigation Funding the company’s litigation financier currently maintains a $1 Billion AUM (Assets Under Management) and has doubled its capital deployment over the past year alone. “One of the cases we’re funding at the moment is a class action of seaweed fishermen in Indonesia claiming compensation for alleged damages caused by an oil spill by PTTEP Australasia Ashmore Cartier PTY Ltd,” says Martin Tonnby, Harbour’s Founder and CEO.
Topics: Harbour Litigation Funding, Assets Management, Burford Capital
Work cited: Litigation Finance Journal | January 17, 2018
