Investment In Litigation Funding ?

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  • 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
    Malthusian Posts: 10,898
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    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.

    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
    Thrugelmir Posts: 89,546
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    Thrugelmir wrote: »
    Try Burford Capital, at least a quoted company.

    Pre-close trading update suggests the Company is still powering ahead. Share price 625p Jan 2017, currently 1180p.
  • jamei305
    jamei305 Posts: 635
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    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.

    Very nice of you to register on here just to put us right on the quality of this investment opportunity.
  • Glib clichet lines are easy to reel off with no thought or research and dont help the enquirer, although no investment can be entirely risk free, if you breakdown the return, its simply a return of 50% gain for the following reasons, based on a £25,000 claim, the funder invests £4,000 to fund the case, if the case is settled out of court or wins in court the investor receives the £4000 investment back plus 5% of any award won by the claimant (5% 0f £25,000= £1,250) and 30% of the base legal fee which is £2,500 (30% of £2500=£750) add £1,250 and £750=£2,000. that's the 50% gain. Should a case lose in court, investors funds are insured and the £4,000 is returned in around 2 weeks. Thats how it reads in the Allansons LLP pdf sent to people enquiring through appointed introducers who introduce prospective investors to Allansons LLP the company an investor deals with directly.
  • John200 wrote: »
    Glib clichet lines are easy to reel off with no thought or research and dont help the enquirer, although no investment can be entirely risk free, if you breakdown the return, its simply a return of 50% gain for the following reasons, based on a £25,000 claim, the funder invests £4,000 to fund the case, if the case is settled out of court or wins in court the investor receives the £4000 investment back plus 5% of any award won by the claimant (5% 0f £25,000= £1,250) and 30% of the base legal fee which is £2,500 (30% of £2500=£750) add £1,250 and £750=£2,000. that's the 50% gain. Should a case lose in court, investors funds are insured and the £4,000 is returned in around 2 weeks. Thats how it reads in the Allansons LLP pdf sent to people enquiring through appointed introducers who introduce prospective investors to Allansons LLP the company an investor deals with directly.

    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?
  • Malthusian
    Malthusian Posts: 10,898
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    John200 wrote: »
    although no investment can be entirely risk free

    Couldn't agree more about the "glib clichet lines dont help the enquirer" bit.

    No investment is entirely risk free but regulated FSCS-protected deposits have no material risk of permanent and total investment loss over the short term. A diversified portfolio of regulated mainstream investments has no material risk of permanent and total investment loss over the long term.

    This investment has a material risk of permanent and total loss should Allanson's cases fail in court and the Bermudan insurer providing After The Event Insurance fail to return the investor's money. It is therefore unsuitable for anyone who is not a high-net-worth and/or sophisticated investor looking to invest a small amount of their portfolio.
    if you breakdown the return, its simply a return of 50% gain for the following reasons, based on a £25,000 claim, the funder invests £4,000 to fund the case, if the case is settled out of court or wins in court the investor receives the £4000 investment back plus 5% of any award won by the claimant (5% 0f £25,000= £1,250) and 30% of the base legal fee which is £2,500 (30% of £2500=£750) add £1,250 and £750=£2,000. that's the 50% gain.

    Should a case lose in court, investors funds are insured and the £4,000 is returned in around 2 weeks.
    Assuming that:

    a) Leeward Insurance, the Bermudan company providing After The Event insurance, doesn't decline the claim
    b) Leeward Insurance has sufficient funds to compensate all investors should the claim be accepted

    May I ask how you came across this investment?
  • TBC15
    TBC15 Posts: 1,446
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    Is there a prize for the thread that generates the most newbies promoting a stinker?

    This ones doing well.
  • redux
    redux Posts: 22,976
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    Ask one question

    Why does this fantastic opportunity need to be promoted to individual investors? Why aren't the solicitors involved keen to borrow the money to incrrase leverage and have all this profit for themselves? Why aren't banks interested in lending to them? What other corporate entities could be running towards this but are not?

    OK, that's 4 questions. No, it's the same question.
  • bostonerimus
    bostonerimus Posts: 5,617
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    edited 12 February 2018 at 6:33PM
    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
    “So we beat on, boats against the current, borne back ceaselessly into the past.”
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