Therium in talks with firms to launch funding ABS

Litigation funder Therium Capital Management is in talks with a number of firms over plans to launch a joint ABS that would see it pumping cash into a law firm to fund a raft of new claims.

Litigation and private client boutique Harcus Sinclair is one of the firms in talks with Therium, which is currently funding the firm’s fight for 6,000 Lloyds shareholders over the bank’s ill-fated acquisition of Halifax Bank of Scotland (HBoS).

The news comes amid an uptick in funders considering alternative structures to provide funding to claims in the UK. Funding giant Burford Capital was granted an ABS licence in January that could see it channel funds into its own firm.

Harbour Litigation Funding also mooted plans to look at launching an ABS as early as 2012.

Therium director Neil Purslow said the move towards an ABS was a “natural progression” on its current provision of finances to law firms.

“We’ve been doing portfolio funding with law firms for a while,” Purslow said. “It’s a gradual coming together of funding and law firms in the area of providing finance to claimants and dealing with litigation risk.

“An ABS with a law firm would make us close to the firm and speed up the claim process,” he continued.

Therium raised £200m to invest in big ticket litigation in May last year, announcing it was invested in more than 30 cases in the UK and US. Mishcon de Reya advised the fund on the capital fundraising.

The Lloyds case, run by Harcus Sinclair disputes head Damon Parker, is one of Therium’s major ongoing claims. Set to go to trial in 2017, the claim alleges former directors of Lloyds misled investors over the 2008 merger with HBoS.

On a potential ABS Parker said: “Our connections with the funding community mean we’re able to get things done on these big cases. Over this year we are increasing our focus on funded work and want to make closer relationships with funders.

“Doing an ABS would allow us to get cases and run them without having to go back and forth with funders and committees over financing,” he added.

Though details have yet to be ironed out, Purslow said an ABS was likely to look similar to a traditional partnership but with non-lawyers in management positions.

“It would be possible for this entity to take up cases and run damages based agreements,” said Parker.

Welsh firm Capital Law made a similar move earlier this month becoming the first law firm to launch its own fund with the backing of a third-party funder, which put up a pot of £50m.

Senior partner Chris Nott, who spearheaded the creation of the fund, said at the time: “This is the inevitable next step for litigation funding. Lawyers will take more control over the process.”