Litigation Capital Management Ltd (AIM:LIT) hit a rally on Thursday following a Supreme Court ruling on the legal status of litigation funding, which forms the basis of LCM’s revenues.
The tribunal ruled that litigation funding agreements do not constitute damages-based agreements and thus may not be enforceable.
Though this may have negative implications for dispute financing, LCM attested that the ruling “will have very limited or no impact on LCM’s portfolios of dispute investments in terms of future value”.
Furthermore, LCM contended that “this decision will have a potential positive impact on our future market share, given the lack of diversity in a number of our key players”.
Shares were changing hands for 85.02p with a market capitalisation of £101.5mln as of 11.30am, July 27.