As previously discussed here, the UK-based fund Juridica has reportedly experienced great success investing in litigation. 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.”
As of May 2009, Juridica had reportedly invested in 17 lawsuits, was up about 20% since its launch in December 2007, and had just paid out dividends of about $5 million to investors after one lawsuit was settled.
Last week, Juridica put out an interesting press release in which it announced that it had published its Public Policy Statement concerning efforts being made to combat unnecessary litigation from class action and mass tort claims in the United States.
In short, Juridica stated that it opposes the funding of class actions, and supports the efforts by its business clients to defend against spurious and vexatious class action claims. Rather, Juridica stated, its business “focuses on corporate claim finance — those involving business-to-business commercial disputes that the parties are unable to resolve because of differing views on the merits or strengths of the claims and/or the amount of damages that should be awarded.”
Richard Fields, CEO of Juridica Capital Management Limited, stated flatly that the firm “does not invest in class actions” because it was
concerned that class action financing could encourage unnecessary litigation. We believe that financiers involved in class action funding are often attempting to create a ‘perfect storm’ of class action or tort litigation to force settlement by defendants unwilling to risk a large judgment, even in a baseless case.