Shares in Litigation Capital Management Limited fell 20% to 6.9p after the group revealed the scale of adverse costs it faces following the loss of a major class action in Australia.
The alternative asset manager said the Federal Court of Australia had quantified costs arising from a long-running case brought on behalf of Queensland electricity users against Stanwell Corporation and CS Energy. The claim was dismissed last year, with the court ordering the claimant to pay the defendants’ legal costs.
Those costs have now been set at A$16.2 million payable to Stanwell and a further A$16.2 million to CS Energy, taking the total to A$32.4 million.
Litigation Capital said it has “after-the-event” insurance in place to cover adverse costs on the case. After the policy has been fully utilised, there remains an uninsured portion of A$19.9 million.
Of that, the company expects to be directly exposed to A$12.9 million, with the balance to be borne by investors in one of its funds.
The case, known as the Queensland Electricity Claim, had been a significant investment for the group. In December 2024, the company disclosed that the claim had been unsuccessful.
An appeal against that judgment has since been lodged and is scheduled to be heard over two weeks from 2 March 2026. Litigation Capital said it is also considering whether the claimant should separately appeal against the level of costs awarded.
Patrick Moloney, chief executive, described the case as “a very expensive and complicated piece of litigation”, adding that the cost orders were made on an ordinary basis and “are not a reflection of the conduct of the claimant or LCM or of the strength of the claim”.
The company said it remains in discussions with its main lender as it works through the implications. A strategic review, first announced in September, is ongoing, with an update promised in the new year.