Investment In Litigation Funding ?

Malthusian

Chrisco79 wrote: »

Box Legal assumes liability under the FSCS for negligent advice in the event that Leeward Insurance fails to pay a valid claim.

You don't get to assume liability on the FSCS' behalf.

The FSCS is only liable if a protected claim arises and there is no protected claim here should Box Legal fail to compensate you.

The FSCS does not cover ultra high risk unregulated schemes offering risk free returns of 30-50% per annum.

1) You can't get ATE insurance for every case.

The literature for this scheme claims that every single case which investors are being asked to fund is covered by Leeward Insurance of Bermuda.

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

Abject nonsense on a stick. "No win no fee" cases are common as weeds and are not professional misconduct.

Malthusian

Chrisco79 wrote: »

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

Very interesting...

Box_Legal_August_2016_accounts wrote:

The directors had recognised accrued income of £850,420 in relation to services rendered but which had not yet been invoiced. After the balance sheet date it was agreed that effective from 1 September 2016 the company would no longer receive income for its services from Leeward Insurance Company based on the number of policies paid but instead would receive income as a flat fee.

On the basis that the method of calculating the company's income has changed the directors no longer consider it appropriate to recognise the income accrual and so have written it back to profit and loss as an exceptional item.

Why the company has written off £850,420 as a result of renegotiating its payment terms with Leeward Insurance of Bermuda I have no idea. Why would you agree to change the basis for payment for services already rendered if it results in you receiving £850,420 less? You could agree to change to a flat fee for future services but still collect the £850,420 for work you'd already done.

Chrisco79

Malthusian wrote: »

You don't get to assume liability on the FSCS' behalf.

The FSCS is only liable if a protected claim arises and there is no protected claim here should Box Legal fail to compensate you.

The FSCS does not cover ultra high risk unregulated schemes offering risk free returns of 30-50% per annum.

See my above post in agreement.

Malthusian wrote: »

The literature for this scheme claims that every single case which investors are being asked to fund is covered by Leeward Insurance of Bermuda.

There is a difference between every claim being covered and every claim being pursued under this scheme being covered.

Malthusian wrote: »

Abject nonsense on a stick. "No win no fee" cases are common as weeds and are not professional misconduct.

It was asked why weren't solicitors putting their own money into this, rather than why weren't they using Conditional Fee Agreements ("no-win, no-fee").

In reality, since the Jackson Reforms of 2013 CFAs are actually not that common, as the success fee has been capped and is no longer recoverable from the defendant. Litigation financing is what has stepped into this gap.

The financing of this scheme is based on the new Damage-based Agreements (DBAs) introduced by Jackson.

Malthusian

I think we are generally in agreement.

However, in a CFA the solicitors (as a firm) are putting their own money into funding the case. The cost of the work they do comes out of their own pocket, until the court eventually makes an award and their costs are paid.

The Jackson Reforms should not be a problem. If the capped success fees are still high enough to generate a surefire return of 30-50% for random investors solicited by unregulated introducers, then they could generate the same return for Allansons itself if they simply used retained profits to take on the case.

bowlhead99

Chrisco79 wrote: »

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.

Without commenting on the merits of the opportunity as this is hardly a new thread, I'd just note that "the paradise papers" is essentially just a bunch of confidential transactional or corporate documents stolen from an offshore law firm or corporate service provider and will contain the names of thousands of individuals or entities who have had any type of corporate transaction or holding structure go through an offshore jurisdiction.

It doesn't surprise me that a Bermudan company is among them but the fact that it is, shouldn't colour your judgement either way really.

Chrisco79

Malthusian wrote: »

I think we are generally in agreement.

However, in a CFA the solicitors (as a firm) are putting their own money into funding the case. The cost of the work they do comes out of their own pocket, until the court eventually makes an award and their costs are paid.

The Jackson Reforms should not be a problem. If the capped success fees are still high enough to generate a surefire return of 30-50% for random investors solicited by unregulated introducers, then they could generate the same return for Allansons itself if they simply used retained profits to take on the case.

Not really. Few solicitors do CFAs, because the DBA cap isn't worth the risk involved for them, hence the decline in ATE insurance (which has badly hit Box Legal's bottom line.)

There are lots of criticisms that can be levelled at this, but "if it were worthwhile the solicitors would be funding it themselves" isn't one that is grounded in reality. Litigation financing is a growing business, but it is also much riskier than this holds it out to be.

BethanyD

Anyone involved with Allansons should read https://www.theboltonnews.co.uk/news/17664931.allansons-solicitors-shut-down-and-manager-suspended-from-profession/


Looks as though the SRA were not too comfortable with the "scheme"

CarolK

Oh dear. I've been had for £12,000!!!!

cd27idw

Doesn't look as though the money's gone astray, but I'm guessing it's going to take age to recover. I'm onboard his as well; I'm scunnered (Scots word for not very happy) that my agent wasn't aware of this, or hasn't told me. Last word was it was all going "brilliant", and was expecting an update this month. All monies and files have apparently been taken on by Gordons LLP. (search Gordons Allansons)
This actually goes back months:
Search Allansons SRA (I can't post links here I'm afraid)


Clucking Bell, indeed!

Malthusian

Presumably if Gordons LLP can't take over these cases and bring them to a successful conclusion, the guy in the corrugated iron shack in Bermuda will now have to get his wallet out.

*crickets*

cd27idw wrote: »

Doesn't look as though the money's gone astray, but I'm guessing it's going to take age to recover.

You invested in an unregulated scheme offering returns of up to 125% per year (50% over six months = 125% a year) and it has been shut down by the regulators.

You would be well advised to assume the timescale for recovery is never, and treat anything that does come back as a bonus.