Litigation Funding Starting to Pay Off

The UK-based fund Juridica, previously discussed here, continues to enjoy nice returns investing in litigation. As discussed in a recent article in Fortune, Juridica, which is traded on London Stock Exchange’s small-companies market, funds “Fortune 500-size companies or their lawyers in the early stages of corporate lawsuits in exchange for a share of the payout if the plaintiffs win or settle.”

Juridica has reportedly invested in 17 lawsuits so far, “and is two for two in decisions.” The fund paid a dividend of about $5 million to investors last month after one lawsuit was settled, and is up about 20% since its launch in December 2007.

Litigation funding is particularly big in Europe, Fortune observes, where lawyering is riskier since many countries require litigators to pay both sides’ legal fees if they lose a suit they bring. Even some insurance companies like Allianz in Germany and several independent investors have launched funds to invest in suits.  Credit Suisse also has a litigation finance unit, and some multi-strategy hedge funds, like York Capital Management, are said to be exploring the concept.

Read the Fortune article