Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@. Skimlinks & other affiliated links are turned on

Search
  • 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 3
    • bostonerimus
    • By bostonerimus 12th Feb 18, 6:29 PM
    • 1,545 Posts
    • 986 Thanks
    bostonerimus
    This is a nuisance thread, just like those phone calls. Someone signs up and their first post is to resurrect this rubbish. With the phone calls I like to get through to the operator and then answer yes to everything in a funny voice, those are the rules of improv, or play Benny Hill music to them. So here's something for all the first time posters on this thread.

    https://www.youtube.com/watch?v=ZnHmskwqCCQ
    Last edited by bostonerimus; 12-02-2018 at 6:33 PM.
    Misanthrope in search of similar for mutual loathing
    • John200
    • By John200 13th Feb 18, 1:59 PM
    • 9 Posts
    • 0 Thanks
    John200
    insurer insures and claims are funded
    The insurer is Box Legal in the UK, google them, 400,000 policies out there have paid out £20 million they only do ATE(after the event) insurance and only work with solicitors.
    My guess is the solicitors cant afford to fund the claims themselves as they are £4,000 per claim and are getting hundreds of requests for the service each month, multiply 4000 x 100= 400,000, I doubt they have that cash available every month. They are now handling over 1,300 claims against lenders, with that number rising by 80–100 a week at present.
    • Malthusian
    • By Malthusian 13th Feb 18, 2:10 PM
    • 3,706 Posts
    • 5,768 Thanks
    Malthusian
    The insurer is Box Legal in the UK
    Originally posted by John200
    No it isn't. Box Legal is not authorised to effect or carry out contracts of insurance in the UK. According to the literature for this investment, the insurer is Leeward Insurance based in Bermuda. Box Legal are the broker.

    google them, 400,000 policies out there have paid out £20 million they only do ATE(after the event) insurance and only work with solicitors.
    How many of these 400,000 policies were with Leeward Insurance? Of those, how many have paid out after Allansons took a mortgage lender to court over a client who had been wrongly overcharged due to automatic capitalisation, and lost?

    They are now handling over 1,300 claims against lenders, with that number rising by 80!!!8211;100 a week at present.
    How many cases have been won?

    Why have these people who have been wrongfully affected by automatic mortgage capitalisation not claimed from their lenders via the Financial Ombudsman Service - a process which by design does not need professional legal assistance, and which, under Civil Procedure Rules, a judge may well have expected consumers to attempt (as a form of Alternative Dispute Resolution) before going to court?

    What is your source for this information?
    Last edited by Malthusian; 13-02-2018 at 2:16 PM.
    • AnotherJoe
    • By AnotherJoe 13th Feb 18, 2:11 PM
    • 8,246 Posts
    • 8,971 Thanks
    AnotherJoe
    The insurer is Box Legal in the UK, google them, 400,000 policies out there have paid out £20 million they only do ATE(after the event) insurance and only work with solicitors.
    My guess is the solicitors cant afford to fund the claims themselves as they are £4,000 per claim and are getting hundreds of requests for the service each month, multiply 4000 x 100= 400,000, I doubt they have that cash available every month. They are now handling over 1,300 claims against lenders, with that number rising by 80–100 a week at present.
    Originally posted by John200
    Of course they could. They only need to finance one such case, make their money back + is it ?50%? and recycle that into new cases. In a year they could retire.

    Anyone genuinely making 50% with "no risk" would keep it to themselves.
    Unless they were crazy. In which case you wouldn't want to be investing in them.
    • ColdIron
    • By ColdIron 13th Feb 18, 2:15 PM
    • 3,894 Posts
    • 4,748 Thanks
    ColdIron
    Hey, the Spam button is back
    • John200
    • By John200 13th Feb 18, 2:23 PM
    • 9 Posts
    • 0 Thanks
    John200
    think it through
    fund 1 case, then re invest the profits !! maybe sit on that case for 6 to 18 months with no return and possibly only the original investment back, they don't male the money on the 50% gain they make the money on the success of a £25,000 case winning in a no win no fee arrangement and getting a cut of that. that's how I understand the mechanics of it, the 50% profit works for an investor, and its only 50% on a £25k claim, a £12,500 claim would yield a 25% profit on a £4,000 investment
    • Malthusian
    • By Malthusian 13th Feb 18, 4:00 PM
    • 3,706 Posts
    • 5,768 Thanks
    Malthusian
    fund 1 case, then re invest the profits !! maybe sit on that case for 6 to 18 months with no return and possibly only the original investment back
    Originally posted by John200
    What do you mean "possibly"? What about the Bermudan insurer that is providing After The Event insurance?

    Forget "one case". Surely they only have to fund say ten such cases for enough to succeed to provide enough capital to fund another twenty or fifty. This is a firm of successful solicitors, surely they have enough spare legal staff and funding to take on such lucrative cases.

    Lawyers don't solicit investment from randoms via unregulated introducers every time they have a potentially lucrative case. They fund the cost of going to court from retained profits from previous successful cases. Why is this different?

    The 50% gain from winning an individual legal case is perfectly plausible. (We'll leave aside the lack of explanation as to why these plaintiffs haven't sought redress via the Financial Ombudsman Service instead of the courts.) The fact this return is supposedly risk-free, thanks to the After The Event insurance provided by a Bermudan insurer, is the problematic part.
    • redux
    • By redux 13th Feb 18, 4:51 PM
    • 18,038 Posts
    • 23,215 Thanks
    redux
    The insurer is Box Legal in the UK, google them, 400,000 policies out there have paid out £20 million they only do ATE(after the event) insurance and only work with solicitors.
    My guess is the solicitors cant afford to fund the claims themselves as they are £4,000 per claim and are getting hundreds of requests for the service each month, multiply 4000 x 100= 400,000, I doubt they have that cash available every month. They are now handling over 1,300 claims against lenders, with that number rising by 80–100 a week at present.
    Originally posted by John200
    I'm almost reluctant to quote this post, in case it is deleted, but let's try another bit of arithmetic.

    400,000 policies out there have paid out £20 million

    Some choices emerge:

    Your Google search came up with some wrong numbers, or you've mistranscribed them.

    An average claim of £4000 is settled at an average of £50 (which is 20M/400k)

    Somehow I don't believe either of these possibilities, but as I and probably anyone else here are not interested enough to look things up, perhaps we'll never know.
    • steampowered
    • By steampowered 13th Feb 18, 9:22 PM
    • 2,185 Posts
    • 2,057 Thanks
    steampowered
    The business plan sounds very strange to me. It suggests that there are lots of cases out there involving lenders miscalculating mortgage repayments by an average of £25,000.

    I could be wrong, sounds very unlikely to me that lenders would miscalculate mortgage repayments.
    • AnotherJoe
    • By AnotherJoe 14th Feb 18, 7:56 AM
    • 8,246 Posts
    • 8,971 Thanks
    AnotherJoe
    fund 1 case, then re invest the profits !! maybe sit on that case for 6 to 18 months with no return and possibly only the original investment back, they don't male the money on the 50% gain they make the money on the success of a £25,000 case winning in a no win no fee arrangement and getting a cut of that. that's how I understand the mechanics of it, the 50% profit works for an investor, and its only 50% on a £25k claim, a £12,500 claim would yield a 25% profit on a £4,000 investment
    Originally posted by John200
    Oh but I understood it was a fantastic opportunity with guaranteed no risk profits and now you are telling me my money might be locked up for 18 months and I'll make no return at all?

    Try and be consistent please.

    If it works for a private individual one case at a time it works for many cases at the same time in parallel especially if one single case may result in no profit at all. If one case isn't enough then that rules it out for anyone other than companies that can put large sums in.
    Last edited by AnotherJoe; 14-02-2018 at 8:08 AM.
    • Malthusian
    • By Malthusian 14th Feb 18, 9:35 AM
    • 3,706 Posts
    • 5,768 Thanks
    Malthusian
    The business plan sounds very strange to me. It suggests that there are lots of cases out there involving lenders miscalculating mortgage repayments by an average of £25,000.

    I could be wrong, sounds very unlikely to me that lenders would miscalculate mortgage repayments.
    Originally posted by steampowered
    It's not miscalculation as such, it's increasing someone's monthly mortgage repayments after they fall into arrears. Which is justifiable in one sense as their debt is bigger than it should be, but not in another as it means that someone who was already struggling to make payments has an even worse problem.

    That this is a real problem is an objective fact, because the FCA has ordered mortgage lenders to pro-actively find out if they have done this and if so, compensate borrowers.

    What John200 has failed to explain is why customers who haven't been compensated (in defiance of the FCA's edict) need to sue their lenders in court (funded by random punters found by unregulated introducers) instead of complaining via the Financial Ombudsman Service.

    Then there is the ongoing lack of clarity over the "After The Event" insurance.

    The Financial Ombudsman is a form of Alternative Dispute Resolution. People are expected to attempt Alternative Dispute Resolution before they go to court. Someone who sues their mortgage lender instead of going to the Ombudsman therefore runs a risk that the judge will throw the case out and tell them to go to the Ombudsman. Meaning no money for the lawyers, and the investor will be relying on Leeward Insurance of Bermuda to compensate them. Alternatively, if they've already gone to the Ombudsman and lost, that doesn't suggest a very strong case, which creates a risk that see above.
    • HappyHarry
    • By HappyHarry 14th Feb 18, 10:19 AM
    • 548 Posts
    • 810 Thanks
    HappyHarry
    Originally posted by Malthusian
    Point 1.19 in the document linked to by Malthusian says:
    Our analysis indicates that the financial impact for most customers may have been relatively small with estimated remediation likely to be in the low hundreds of pounds.

    Hardly £25,000, but much closer to the figure that redux alluded to above;
    An average claim of £4000 is settled at an average of £50 (which is 20M/400k)
    This sounds like a high risk, low return type of investment to me, rather than the low risk, high return type investment alluded to.
    I am an Independent Financial Adviser. Any comments I make here are intended for information / discussion only. Nothing I post here should be construed as advice. If you are looking for individual financial advice, please contact a local Independent Financial Adviser.
    • John200
    • By John200 15th Feb 18, 5:48 PM
    • 9 Posts
    • 0 Thanks
    John200
    misunderstood
    I don't think Box Legal on their web site are stating they have settled 400,000 claims, they just have 400,000 policies which have all paid a premium, they could be huge policies covering a lot more than £4,000 per policy, with huge premiums attached,who knows how many of that 400,000 have been paid out on, what is known is Box legal are regulated by the fca and if they go bust 90% of capital will be covered by FSCS, I presume not just Allansons but any policy holder, I'm not 100% sure but its my best guess. to be clear the investment is not covered by the fca it is covered by insurance the FSCS ony applies if the insurance company goes bust, that's how I interpret it but I could be wrong. the insurer is only relevant if a case loses in court and the insurer goes bust, if cases win its irrelevant. anyway if you are bothered to reply to posts I would think you would google box legal and see for yourself, look em up on the FCA register, don't take my word, I'm not trying to be argumentative but am just interested in understanding more about the opportunity
    • le loup
    • By le loup 15th Feb 18, 5:52 PM
    • 3,738 Posts
    • 3,682 Thanks
    le loup
    but am just interested in understanding more about the opportunity
    Originally posted by John200
    Yes, that's the word. A great opportunity to throw money away.
    • John200
    • By John200 16th Feb 18, 12:21 AM
    • 9 Posts
    • 0 Thanks
    John200
    why
    why do you say that ? I don't understand these glib, off the cuff replies, with no substance, is that what this forum is for, because they are valueless replies
    • John200
    • By John200 16th Feb 18, 12:26 AM
    • 9 Posts
    • 0 Thanks
    John200
    double dipping
    they double dipped, charging interest on outstanding interest and monthly fees for being in arrears, that's where the breach of contract occurred if I understand it correctly
    • John200
    • By John200 16th Feb 18, 12:37 AM
    • 9 Posts
    • 0 Thanks
    John200
    the risk is you lose 18 months bank interest
    if a case loses then you might end up with just getting your investment back with no profit, through the insurance, independent barristers have stated they estimate 75% of cased will be settled out of court or win. the real money isn't made by the investor in a winning case, the real money is earned by the solicitor on a cut of the compensation on a no win no fee basis. so to the solicitor, funders just mean they don't have to stump up the money up front. I have read the brochure
    • John200
    • By John200 16th Feb 18, 12:56 AM
    • 9 Posts
    • 0 Thanks
    John200
    simple logic
    possibly, meant if a case loses, you only get your investment back, there is no profit, as to your reasoning of why don't the solicitors fund the cases themselves ? it doesn't make any business sense to fund cases as a solicitor, who would tie their own money up when the big money is to be made at the end when a case wins on the cut of the no win no fee, smart money will let funders fund all day and tie their money up for up to 18 months, funders will que up to do it cos it beats leaving money in the bank, exactly the same reasons companies will borrow from banks and pay interest rather than tie up cash that is needed for everyday cash flow while the borrowed money earns so much more than the interest repayment.
    • bostonerimus
    • By bostonerimus 16th Feb 18, 4:03 AM
    • 1,545 Posts
    • 986 Thanks
    bostonerimus
    .............. I'm not trying to be argumentative but am just interested in understanding more about the opportunity
    Originally posted by John200
    Your posts read as if you are trying to "educate" us rather than learn from our responses. I conclude that your are probably more likely to be selling than buying, but if I'm wrong then go ahead and invest in this scheme against all our advice. You and your fellow low post number members seem to be enthusiastic, but i don't think you'll find many other takers.......cue the Yakety Sax music.
    Misanthrope in search of similar for mutual loathing
    • Malthusian
    • By Malthusian 16th Feb 18, 11:07 AM
    • 3,706 Posts
    • 5,768 Thanks
    Malthusian
    to be clear the investment is not covered by the fca it is covered by insurance the FSCS ony applies if the insurance company goes bust, that's how I interpret it but I could be wrong. the insurer is only relevant if a case loses in court and the insurer goes bust, if cases win its irrelevant.
    Originally posted by John200
    Again, the insurer is not Box Legal, which is not authorised to effect contracts of insurance. Look them up on the FCA Register yourself. Box Legal has brokered the insurance contract, which is with Leeward Insurance. Leeward Insurance is based in Bermuda and is therefore not covered by the FSCS.

    You complain about people making glib off the cuff replies yet ignore detailed factual posts which point out where you are mistaken about both the detail of the investment (e.g. who the insurer is) and the risk involved.

    Five posts in quick succession and in none of them have you answered my question as to why the litigants need to sue their lender in the courts when they not only can, but should go to the Financial Ombudsman Service.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

2,038Posts Today

7,740Users online

Martin's Twitter
  • Today's surreal Friday twitter poll: If you had a choice between aging on the inside or the outside, for the rest? https://t.co/gabklHJ0w1

  • RT @LauraFrancis9: Final shoot for this series of The Martin Lewis Money Show! Have loved meeting & helping empower? https://t.co/MOtvb73nVu

  • RT @LaraLewington: Riding a remote control electric skateboard is obviously best done in heels. Max speed 22mph, but maybe trainers for tha?

  • Follow Martin