Investment In Litigation Funding ?

TBC15

Any other new posters wish to sing the praise for this not nice investment opportunity?

Malthusian

Tomogo wrote: »

Can not fault either company, very efficient and helpful.

You've handed them thousands of pounds of your money. Were you expecting them to act towards you like a DWP benefits officer with a hangover?

Most people on these sites have no idea about the investment model itself usually and only want to criticise. If you want the higher returns then step away from the banks and IFA’s who are offering 2-3 percent.

Apparently the model for this investment requires its clients to join random forums they've never posted on before and solicit new investment into the scheme.

An IFA client willing to bear investment risk will typically be offered a portfolio that has made ~8%pa over most long term time periods, with minimal risk of permanent and total capital loss. In contrast to this investment where return of capital teeters on an inverted pyramid of piffle consisting of shonky cases that should be going to the Ombudsman, not court, an insurer resident in a corrugated iron shack in Bermuda, and highly suspect interpretations of the FSCS rules.

eddystone506

I was shown this scheme today and got some of the documents from the broker trying to sell me the investment but I can't see how to post them here. The main risk is that the ATE insurance doesn't pay out if the claim is unsuccessful and I can't find out anything about Leeward, the insurers. Does anyone have any documents? I've asked for them.

HappyHarry

eddystone506 wrote: »

I was shown this scheme today and got some of the documents from the broker trying to sell me the investment but I can't see how to post them here. The main risk is that the ATE insurance doesn't pay out if the claim is unsuccessful and I can't find out anything about Leeward, the insurers. Does anyone have any documents? I've asked for them.

Out of interest, who is the broker selling these "investments"?

jimjames

eddystone506 wrote: »

I was shown this scheme today and got some of the documents from the broker trying to sell me the investment but I can't see how to post them here. The main risk is that the ATE insurance doesn't pay out if the claim is unsuccessful and I can't find out anything about Leeward, the insurers. Does anyone have any documents? I've asked for them.

Not sure you're really assessing the risk too well if you think that's the main risk.

AnotherJoe

eddystone506 wrote: »

I was shown this scheme today and got some of the documents from the broker trying to sell me the investment but I can't see how to post them here. The main risk is that the ATE insurance doesn't pay out if the claim is unsuccessful and I can't find out anything about Leeward, the insurers. Does anyone have any documents? I've asked for them.

I suspect this broker will be as reliable as the first eddystone lighthouse

Chrisco79

verybigchris wrote: »

I know we're meant to be nice to newbies and everything, but that's abject nonsense. There's simply no way any genuine insurer would offer such a giveaway. And if the lawyers were able to find such a fool, why on earth would they then offer a 50% return to complete strangers instead of just putting up the money themselves?

I am here because I am researching this and am highly skeptical about it, but both these criticisms are factually wrong.

1) You can't get ATE insurance for every case. ATE insurers assess the facts of the claim, the likely costs to be incurred, and the likelihood of settlement or success. They offer insurance and set their premiums on that basis. Most claims with merit settle rather than going to court, and obviously the stronger the claim the greater the likelihood of settlement and the lower likelihood of high costs. The earlier in proceedings a solicitor takes out ATE, and the fewer costs have already been incurred, the lower the ATE premium would be.

2) To fund a client's litigation would be such a serious act of professional misconduct that it would get the solicitor struck off.

Chrisco79

Malthusian wrote: »

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.

Box Legal assumes liability under the FSCS for negligent advice in the event that Leeward Insurance fails to pay a valid claim. Who decides what is a valid claim, though, I am not clear about.

EDIT: A blog called 'Bondreview' examines this claim in detail. Their conclusion is that it is not a protected claim and therefore not covered by the FSCS.

What would give me cause for concern is that this is not a large firm of successful solicitors. It was a two-man partnership but one of the partners left at the end of 2017. They still have not yet posted their accounts due for 2017. This appears to be a small firm trying to raise some money to get in on the growth in litigation financing. I would want to be confident, though, that it's not just an attempt to keep afloat a struggling firm, and where the litigation funding and insurance would be if it went under.

dealer_wins

IMHO anyone "investing" here will almost certainly lose every penny.

Chrisco79

If you are Box Legal, this scheme would be a good way to boost your revenues: you push a scheme that finances policies you broker.

But as sb above noted, if the case loses, Leeward Insurance (which comes up in the Paradise Papers) doesn't pay out and Box Legal goes under, then you lose the lot.

I'd definitely want to know what was Box Legal's exceptional lost of £850k for last year...