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.
Litigation investment 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 firm Bristows.
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 litigation.
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.”