Publicly listed dispute litigation funder Litigation Capital Management (LCM), has executed an agreement to finance a portfolio of up to 20 construction claims brought by a subsidiary of an unnamed global building and infrastructure contractor in jurisdictions around the world.
The transaction originated through LCMs strategic alliance with Norton Rose Fulbright. It is the company’s third corporate portfolio deal, an area it has been prioritising.
Cameron Harvey, head of disputes of Norton Rose Fulbright, said: “We entered into a strategic alliance with LCM because we foresaw a growing need for corporate litigants to be able to engage in necessary dispute resolution without having the experience cripple their balance sheets, something which is even more crucial during the COVID-19 pandemic.”
New rules that came into force in Australia last week mean that litigation funders now have to hold an Australian financial services licence and comply with the managed investment scheme regime.
The previous exemption meant they did not face the same regulatory scrutiny and accountability as other financial services and products.
The Australian government said it would ensure funders operate transparently, were appropriately regulated and were accountable.
LCM started in Australia and only recently moved its headquarters to London. Speaking earlier this year, chief executive Patrick Moloney said it already had a licence and backed the change.
He said that, as well as improving transparency, it could also provide LCM with “a strategic advantage as the cost and compliance issues are likely to create further barriers to entry and restrict the numbers of financiers that can fund class actions”.