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  • FIRST POST
    • 5MeoDmt
    • By 5MeoDmt 23rd Oct 17, 12:52 PM
    • 13Posts
    • 3Thanks
    5MeoDmt
    Investment In Litigation Funding ?
    • #1
    • 23rd Oct 17, 12:52 PM
    Investment In Litigation Funding ? 23rd Oct 17 at 12:52 PM
    Hi,

    Just wondering if anyone here has had any experience with this or can give me any more information

    Had an email about an investment which is basically funding no win-no fee court cases where borrowers have overpaid mortgage payments due to miscalculations by the mortgage lenders

    The returns look really good (£6000 return for a £4000 investment within 18 months) but I'm concerned there will be some hidden risks

    Any advice welcomed!
Page 2
    • Shashy
    • By Shashy 23rd Oct 17, 4:11 PM
    • 78 Posts
    • 98 Thanks
    Shashy
    I think I'm actually out of sympathy for people who believe these things. I don't want anyone to lose money, but there is a certain Darwinism at play here.

    Go ahead I say. Let us know how you get on.
    • JohnLambe
    • By JohnLambe 13th Nov 17, 2:00 AM
    • 1 Posts
    • 0 Thanks
    JohnLambe
    Some people seem to be assuming that this is a guaranteed 50% return. They claim nothing like that.

    (I was also offered this investment, and haven't fully verified that it is genuine.)

    The acknowledged risks are:
    1. Losing the case and getting only your capital returned.
    2. The case is lost and the insurance company (Box Legal, providing After The Event insurance) is insolvent. Then Allanson's should receive 90% of the value from the FSCS.

    Other risks I can think of are:
    3. That the scheme could be a fraud.
    4. The case could take longer than expected (maybe due to delaying tactics by the lender), with NO guaranteed maximum duration.
    5. The case is lost and the insurance claim is *validly* denied. (i.e. It is not covered by the insurance). Read the insurance contract. It's a small risk. Your contract with Allanson's does NOT make them liable to you in this case. (You could lose your capital.)

    I (personally) find 1, 2, 4 and 5 acceptable risks for a medium risk investment grade product. (Maybe comparable to an asset-backed corporate bond in terms of risk to capital.)

    This type of investment doesn't seem to be regulated by the FCA (Financial Conduct Authority), and so they don't have to provide a document that identifies the risks.

    The projected returns of about 37.5% (estimated 75% chance of an estimated 50% in an estimated 6 to 18 months; They never said it was guaranteed.) are surprisingly high, but the uncertainty of getting a return (and maybe a high degree of uncertainty around that estimated 75% chance of winning), and the risks above, might explain that. The estimate might be optimistic. (I've no way of estimating that.)
    If it's genuine, we'll probably see the same product offering lower returns in future, when it has a track record and a better basis for estimating returns.


    The SRA (Solicitors Regulation Authority) website shows that Allanson's LLP are in fact solicitors regulated by them (and that the website given is theirs. It uses SSL.) (Other references to it on the web make it look genuine too.)

    But before transferring any funds, you have to ensure that the account belongs to them or that the person providing the account details is in fact from Allanson's (a sender's email address is easily forged, but you could send them an email (requiring a response that shows that they received it) or (more secure) otherwise contact them, WITH CONTACT DETAILS ON THE WEBSITE).

    When you verify that, you know that you are dealing with a regulated solicitor. That's where it's credibility comes from.

    The FCA's register does list Box Legal.
    (Leeward are not listed because they are outside the UK.)

    Delta Market are only a middleman, and that's all they claim to be.
    • le loup
    • By le loup 13th Nov 17, 9:16 AM
    • 3,696 Posts
    • 3,651 Thanks
    le loup
    Oh dear!


    This message is too short, as is life.
    • bigadaj
    • By bigadaj 13th Nov 17, 9:44 AM
    • 10,781 Posts
    • 7,105 Thanks
    bigadaj
    Well you can guarantee that the lawyers will always get paid anyway.
    • TrustyOven
    • By TrustyOven 13th Nov 17, 10:47 AM
    • 676 Posts
    • 718 Thanks
    TrustyOven
    Some people seem to be assuming that this is a guaranteed 50% return. They claim nothing like that.

    (I was also offered this investment, and haven't fully verified that it is genuine.)
    Originally posted by JohnLambe

    You forgot to say "Don't touch them with a bargepole".

    Yes, I think that's what you meant to say. As a new poster, I'm sure you are not actually suggesting anyone invests with them or that it's ok to invest with them.

    The SRA (Solicitors Regulation Authority) website shows that Allanson's LLP are in fact solicitors regulated by them (and that the website given is theirs. It uses SSL.) (Other references to it on the web make it look genuine too.)
    Originally posted by JohnLambe
    LOL gimme a break! Half the Internet uses valid SSL certificates. You can get yours for.... for example... 24 quid a year with 1&1.

    Anyone can make a website too. It's no longer an indicator of authenticity and validity.

    Edit: MSE is REALLY bad, they don't use SSL. C'mon guys, "shibboleet", Hi 3rd level tech support, please enable SSL on your http daemon. Thanks!
    Last edited by TrustyOven; 13-11-2017 at 11:48 AM. Reason: shibboleet
    Goals
    Save £12k in 2017 #016 (£4212.06 / £10k) (42.12%)
    Save £12k in 2016 #041 (£4558.28 / £6k) (75.97%)
    Save £12k in 2014 #192 (£4115.62 / £5k) (82.3%)
    • Malthusian
    • By Malthusian 13th Nov 17, 11:19 AM
    • 3,585 Posts
    • 5,518 Thanks
    Malthusian
    Some people seem to be assuming that this is a guaranteed 50% return. They claim nothing like that.
    Originally posted by JohnLambe
    They claim the opportunity is "for eligible savers and investors alike who are simply seeking to gain better returns than what the banks are currently offering" and "If you are frustrated with the low returns offered by banks but don’t want to risk your hard-earned savings by investing in volatile stocks and shares" [my emphasis]. The last part explicitly says there is no risk, i.e. it is guaranteed, and the whole thing states that the investment should be compared to guaranteed deposit accounts, and by investors who lack enough appetite for risk to invest in mainstream diversified stockmarket investments.

    When an ultra-high-risk investment is being promoted as if it is suitable for investors looking for deposit accounts the distinction between the capital being guaranteed and the yield being guaranteed becomes semantics.

    2. The case is lost and the insurance company (Box Legal, providing After The Event insurance) is insolvent. Then Allanson's should receive 90% of the value from the FSCS.
    Box Legal is not authorised by the FCA to "effect" or "carry out contracts of insurance". If it is effecting an insurance contract without authorisation then it is committing a criminal offence, and there will be no FSCS cover if it fails to meet its obligations under that contract.

    More generally, any torturous attempt to give the appearance of FSCS cover for an investment claiming a yield of up to 50% will fail.

    I (personally) find 1, 2, 4 and 5 acceptable risks for a medium risk investment grade product. (Maybe comparable to an asset-backed corporate bond in terms of risk to capital.)
    This is an ultra-high-risk unregulated investment which could lose 100% of your money. It is not medium risk. An individual asset-backed corporate bond would also be ultra-high-risk, even in a more well-known company. A fund holding dozens of corporate bonds which diversified the default risk might be medium risk.
    • bostonerimus
    • By bostonerimus 13th Nov 17, 1:44 PM
    • 1,426 Posts
    • 845 Thanks
    bostonerimus
    John, good of you to sign up to this forum and as a first post resurrect this dead thread. It will give all the sensible and knowledgable forum regulars a second opportunity to say....run away....don't even think about this one.......there are a million better ways to invest your money. etc etc.
    Misanthrope in search of similar for mutual loathing
    • Stapletonb
    • By Stapletonb 22nd Jan 18, 7:28 PM
    • 2 Posts
    • 0 Thanks
    Stapletonb
    I am new to investing and have had the exact same as 5MeoDmt but the company is called Growth Market.
    The Growth Market
    Parallel House
    32 London Road
    Guildford
    GU1 2AB
    T: 01483 331468

    Exactly the same Solicitors are Allansons. Claims to be covered by FSCS etc.

    £4000 per case which potential return of £6000
    The person ensured me that if the case failed I would get my full £4000 back as it is covered there insurance policy.

    How can people get away with advertising this on the Internet, I was ready to give them £4000 until I saw this forum.
    • jimjames
    • By jimjames 22nd Jan 18, 7:57 PM
    • 12,344 Posts
    • 10,927 Thanks
    jimjames
    Have you spoken to Allansons to find out if they have any connection?
    Remember the saying: if it looks too good to be true it almost certainly is.
    • Stapletonb
    • By Stapletonb 22nd Jan 18, 8:06 PM
    • 2 Posts
    • 0 Thanks
    Stapletonb
    No I haven't. Will ring them tomorrow
    • southsteads
    • By southsteads 23rd Jan 18, 8:36 AM
    • 1 Posts
    • 0 Thanks
    southsteads
    Litigation funding can and has produced impressive returns for years, just ensure -

    - The company you are dealing with is legit.
    - The cases are within the English courts.
    - The cases are backed by what is called ATE insurance. ATE insurance means your investment is 100% protected and you will receive the money back should the case be lost.

    Compared to most other asset classes, litigation is still not mainstream which makes people suspicious but if the above 3 points are in place and you have background checked the case you could do very nicely indeed. I have heard of people doubling their investment in 12 months.
    • verybigchris
    • By verybigchris 23rd Jan 18, 8:50 AM
    • 387 Posts
    • 499 Thanks
    verybigchris
    Let's see if I've got this right:

    - the investor gets a huge slice of the rewards for zero risk
    - the insurer gets a small slice of the rewards for 100% of the risk

    Perhaps another of these newbie posters will magically appear to tell us all what the insurers are smoking to think that's a worthwhile proposal.
    • Malthusian
    • By Malthusian 23rd Jan 18, 9:37 AM
    • 3,585 Posts
    • 5,518 Thanks
    Malthusian
    The cases are backed by what is called ATE insurance. ATE insurance means your investment is 100% protected and you will receive the money back should the case be lost.
    Originally posted by southsteads
    Assuming:

    - the insurance cover exists. (As most of the investors have not even had sight of the insurance contract, let alone had their accountants produce a due diligence report confirming that it's watertight, which is what corporate lenders in this area would do, they can't assume that.)
    - the insurer pays out, instead of declining the claim as for one reason or another it isn't covered
    - the insurer has sufficient funds to cover all investors

    As per Verybigchris, the notion that an insurer will take all the risk and you get all of the return is manifestly nonsense, as is the idea that you can get rich quick by investing in litigation funding. If that was the case you could invest £10,000 and be a millionaire in 7 years.
    • Thrugelmir
    • By Thrugelmir 23rd Jan 18, 10:06 AM
    • 56,801 Posts
    • 50,166 Thanks
    Thrugelmir
    Try Burford Capital, at least a quoted company.
    Originally posted by Thrugelmir
    Pre-close trading update suggests the Company is still powering ahead. Share price 625p Jan 2017, currently 1180p.
    “Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble”
    ― Warren Buffett
    • jamei305
    • By jamei305 23rd Jan 18, 10:24 AM
    • 276 Posts
    • 327 Thanks
    jamei305
    Litigation funding can and has produced impressive returns for years, just ensure -

    - The company you are dealing with is legit.
    - The cases are within the English courts.
    - The cases are backed by what is called ATE insurance. ATE insurance means your investment is 100% protected and you will receive the money back should the case be lost.

    Compared to most other asset classes, litigation is still not mainstream which makes people suspicious but if the above 3 points are in place and you have background checked the case you could do very nicely indeed. I have heard of people doubling their investment in 12 months.
    Originally posted by southsteads
    Very nice of you to register on here just to put us right on the quality of this investment opportunity.
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