Jersey Litigation Fund Breaks New Ground
Monday, December 5, 2011
Offshore law firm Carey Olsen has broken new ground with the first ever listing of a litigation fund
on the Channel Islands Stock Exchange (CISX) after it advised Argentum Capital
Limited on the Jersey legal aspects of its multimillion-pound listing.
The Fund engages in the provision of litigation funding - funding for a legal proceeding in court in return for
a share in the proceeds. The funding is used to cover legal costs that would
enable a case to be taken to a successful conclusion.
is gaining momentum in the UK as a new area of investment as an emerging asset
class and the CISX listing breaks new ground for the Channel Islands.
A team from Carey Olsen, led by partner James Mulholland and Daniel O’Connor,
of Counsel, provided advice on the Jersey legal aspects of the establishment
of Argentum Capital Limited as a multi-class Jersey expert fund. Carey Olsen
also acts as a listing sponsor for Argentum Capital, which will be the first
litigation fund to list on the CISX. Carey Olsen was instructed by London law
Argentum manages a portfolio of investment platforms invested in commercial
litigation, insolvency and international arbitration cases. The objective of
these platforms is to provide investors with attractive income distribution
and capital growth returns through an investment strategy of financing for cases
that have a requisitely high prospect of success.
This listing is for a third-party fund designed to invest in the funding of
litigation principally in the UK, with a secondary focus in Australia, New Zealand,
Singapore and Hong Kong.
In return for the provision of litigation funding the provider receives a share of the proceeds in sucessful cases. O'Conner explained the funder, which could
be an individual or corporate entity, was essentially an investor with no interest
in, or connection with, the case other than the funds it has invested in the
Bristows partner Iain Redford said: “Litigation investment is an evolving
market offering significant growth opportunities. An increasing number of claimants
are seeking third-party funding for court cases where they believe they have
a strong chance of winning.”
He added: “Argentum coordinates a research-focused investment process of identifying
and reviewing commercial litigation cases, then manages the funded cases and
the resulting proceeds of the investments; as each case settles, distributions
are then made.”
Mulholland commented: “The market in third-party funding is still new in
the UK. However, its role has been increasingly recognised in supporting access
to justice for all and the broader use of litigation funds has been endorsed
by Lord Justice Jackson in his seminal report on civil litigation funding reforms."
He added: “A number of funds are active in the UK market but this is the first
to use the CISX for listing a Jersey fund to undertake this kind of investment.
We believe that there will be significant interest in this deal and we’re
excited that Carey Olsen is at the forefront in terms of its expertise in this
new area of potential growth for the funds sector.”