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Commercial litigation funding demand for UK claims still in demand

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Despite the recent revelations highlighting the extent of the delays and backlog of cases in UK courts, the latest set of financial results by specialist litigation funder Manolette suggests that demand is still increasing and that the litigation funding sector is in rude health, with new enquiry volumes doubling compared to the previous year.

Litigation funding, also commonly referred to as third-party litigation funding, allows an individual or business to bring a civil litigation claim or commence arbitration without having to pay their fees themselves. Litigation funders will assess each claim on its merits and subject to the prospects of success meeting their required criteria, the funder may then pay some or all of the costs and expenses associated with the claim in return for a share of the proceeds if the claim is successful. The litigation funder bears the claimants costs risk, so should the action fail / lose, then they have bear the costs it has funded.

The Manolete results, described as being at ‘record levels’ despite the ongoing coronavirus crisis, show an increase in pre-tax profits before exceptional IPO costs of 40% to £9.5m in the year to 31 March, while revenue also increased by a healthy 36% to £18.7m. Manolete, a junior AIM listed company, are specialists in funding or acquiring insolvency claims. In 2019, the business saw a 139% increase in new investments in UK insolvency cases, up to 141 from 59 in 2018/19. In commenting on the figures, Manolete CEO Steven Cooklin said:

We are currently running a record 201 live cases and foresee no requirement for any further material increase in overhead costs, so the outlook for cash generation is very positive…Despite the challenges of COVID-19, activity levels within the business are at record levels, highlighted by the 47 new case investments (124% more than the same period last year) and 23 case completions (up from four in the same period last year) that the team has transacted in the first quarter of 2020-21."

The positive results have also led specialist broker Liberum to issue a ‘buy’ recommendation, saying: 

Since 2016 the Jackson reforms have caused third party funding to be a significantly more attractive financing method for insolvency practitioners. Following this, we believe that third party funders are seeing the start of a decade long structural growth opportunity and will become the dominant share of a £750m per annum established market. Manolete should therefore continue to enjoy significant growth in the short and medium term, whilst delivering sector-leading returns.”

Commercial Litigation Funding

If you are thinking about taking legal action against another individual or company but are worried about the costs involved, Advantage Litigation Services have the skills and expertise to help you find a way of funding commercial litigation without risking your personal finances or those of your business. Click here to contact us today or call 0800 160 1298 to see how we can help.

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