Litigation Funding – a new idea?
It all about the money and now there is a new entrant to the market with a name, Caprica, that might sound familar to those who followed the prequel to Battlestar Galactica
The difference is that Caprica, the TV series, was a fantasy adventure involving far fetched ideas. Caprica, the real-world business, sounds like they are far more down to earth. They are offering some new thinking in regard to funding civil litigation, which is to be welcomed.
Third party litigation funding, historically an option for those with disputes in excess of £500,000, is to be offered by one business, Caprica, as a viable alternative for businesses with commercial disputes with values as low as £50,000.
Caprica has plans to invest around £100 million in the medium term and it claims to have funded £15 million of pre-launch generated cases.
Caprica plans to assist claimants who might otherwise struggle to fund litigation following reforms by the Ministry of Justice. If implemented, the Ministry of Justice proposals will shake up the way that litigation is funded as the recommendations include stopping the recoverability of success fees on conditional fee agreements and after the event premiums.
What sets it apart is that Caprica’s business model has a funding fee that is not connected to the damages that a claimant receives. Existing third party funders tend to lock in claimants while carrying out case reviews which prevents the latter from investigating whether they can get a better deal elsewhere. Caprica plans to reject this exclusive tie-in which will allow claimants to compare funders.
It is hoped that this move will lead to further entrants to the third party litigation funding market which will increase competition and be of benefit to small-to-medium-sized businesses which are effectively excluded from considering this as an option to fund claims.
We hasten to add we have no connnection (other than as interested possible users) with Caprica- and as a fan of the TV series (which we assume has no connection with the company).
For more information about how we can assist generally with commercial disputes, please contact Quentin Bargate or Andrew Denny of Bargate Murray.