Investment In Litigation Funding ?

cloud_dog wrote: »

I have made many posts, and have read just this one post and I am similarly compelled to respond but, there is sooo much misdirection in your post I will simply focus on one aspect:

Which specific aspect of finance is the organisation FCA registered for?

The fact that they are authorised and regulated by the FCA gives me enough security to believe that they are not misleading me. I called them up yesterday and discussed the ATE insurance that they are providing to Allansons and I was satified with their response. I have then spoken to the FCA and there are no warnings against box legal. They are are credible company that have issued polices to over 250 law firms. I am totally satisfied with them as are 250 law firms who have taken policies protecting their livelihood.

I would rather believe the facts then someone simply posting without any evidence or research backing up what they are saying.

grey_gym_sock wrote: »

unlike cloud_dog, i don't have the patience to try going through the detailed flaws in this so-called investment yet again.

neither you, nor your earlier incarnations, TheNobel1 and John200, ever address the issues. every time, you deflect.

so i'll just ask this: can you confirm that your real name is ShillyMcShillface?[/QUOTE

What are the issues? I will address them.

My call with the FCA was clear. My call with Box legal was clear. My call with Allansons was clear.

I have personally made hundreds of thousands from litigation funding. I have funded cases that have won and the insurance has not mattered. I have also funded cases that have lost and I have been paid out from the insurance policy. I have invested in litigation funding companies listed on the stock exchange.

I have first hand evidence that litigation funding makes investors money, it help claimants who do not have the knowledge or resources to fight injustice and/or strong claims. I have first hand experience that insurance does pay out when a case loses.

If the board of burford litigation or woodford litigation or harbour or even the association of litigation funders could read this right now. It would be a great sight to see you argue with these qualified solictors and barristers. You would be defeated. In fact I would pay to watch you being lost for words. Absolutely no clue.

What evidence do you have in making your statements? any first hand evidence? or just silly child like comment like asking if my name is shilly mcshillface!

verybigchris wrote: »

Hi free2bfree. Are you able to explain why any insurer would agree to take on all of the risk for only a small slice of the reward? I have posted this question before in the hope that John200 or theNobel1 would answer it, but to no avail.

The thing is, I have no problem with litigation funding per se. It's a very simple proposition: expected positive NPV, but with high initial outflow and high uncertainty of future inflows, meaning investors get rewarded both for fronting the money and for taking on the risk. That's a basic model I have no problem with.

What doesn't fit with this specific venture is that the risk/reward is completely screwed. It makes no sense for the party who takes on all the risk, not to also be the party who takes on all the reward. That's why this stinks to me of a scam, and so far nobody's been able to explain otherwise.

I have been involved in funding litigation for over ten years. This is not a scam. I will explain your confusion. Let me give you a basic example. My house insurance and car insurance is very low compared to their value. Why would these insurance companies take the risk in insuring my car and house worth over a million pounds for very little payment. This is the same. I knew someone who insured a 80 k car his first monthly premium was paid - the vehicle was stolen and taken out of the country and never recovered - the insurance paid out. Again why would the insurance company take such a huge risk on such a small payment. This is their industry.

The algorithm and the brains that work in insurance companies are far greater than mine and from the looks of it anyone else on this forum. They manage the risk and ascertain the premiums accordingly. the same applies in litigation funding cases. Each case is judged on its own merits and then insured accordingly.

If I wanted to sue cloud dog for defamation, it is highly unlikely that a solicitor would even take my case on a no win no fee basis because the chances of winning are slim. It is highly unlikely that I would find a third party investor to fund my case and It is highly unlikely that an insurance company would insure this case.

On the other hand if a person crossing the road was hit by an ocado lorry resulted in a claimant losing his legs. I have no doubt that the person would have no shortage of lawyers wanting to take the cases on a no win no fee basis. The law firm would have no shortage of investors to fund the expert medical and phychological reports for the claim and the law firm and the investor would have no shortage of obtaining insurance at a very low premium. Simple reason because the case has a very very high chance of being settled outside of court.

The insurance company before insuring a case will assess the likelihood of success if a case is likely to lose. the case may not be insured and if it were to be insured then the premium would be huge. The same way the premium of my car would be high in a high car theft zone.

With this Allansons investment I only came across it from a friend last night. I did not know about it before. I have read their brochure and conducted the due diligence on behalf of my friend by calling all the parties involved. This all make very good sense and is entirely plausible. The solicitors will not take on a case on a no win no fee basis unless they can clearly see that there is a breach of contract . to do so would not make any business sense. If the evidence is clear and overwhelming the banks will simply not contest the claim. Therefore the insurance company would be happy to issue a low premium knowing that each case has a high chance of success.

Someone else has said why dont these claimant do it themselves. If this was the case then we still would not be hearing ppi adverts on the radio still.; people would book directly with hotels and airlines and there would be no need for travel agents. its a silly thing to say. I dont do my own fillings, I go to the dentist. The main reason I can see from the literature that p[people will use a solicitor is that the FCA in there statement last year have said that people can claim for consequential loss and distress. This is where the banks will be put to task. As the figures will vary from the banks amount. If I lost an asset as a result of the bank unfairly depriving me of money that i could have had at the time to save the asset then I should rightly be able to claim for loss of that asset and any other consequential loss or distress. People can do it themselves for sure, but would you pull your own wisdom tooth out. Im sure you can but i am not sure the job will be as good as a dentist.

For your question -about risk and reward. from my conversation with box legal each policy is insured to a maximum of 25,000 , the premium is around £400. I do not see how this is totally screwed in the risk/reward department. Its a simply insurance policy - this is the nature of their business. In most cases the insurers are exposed to more than the premium but that is why very clever computers and people working for these companies get the premium right. if a case loses they pay out if it doesnt then they take the premium. I dont see where it is screwed. Each case is likely to win in any event. Really Allansons shouldn't be wasting money on the insurance but they do this to protect themselves and the investor. I cannot see the law firm taking on a single case on a no win no fee basis unless they have passed initial tests as to the claim size and clear evidence of a breach on the banks part.