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The Markets
by Proactive
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The Markets
by Proactive
Proactive UK has moved.
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Financial Services

Litigation Capital says disputes on the rise as coronavirus restrictions ease

“Market conditions are increasing the demand for disputes finance."

Litigation Capital Management Limited (LON:LIT), the legal dispute finance specialist, said the flow of new business is picking up as global lockdown restrictions ease.

Applications for funding rose by 5% to 266 cases in the half-year to end-December 2020, with a US$67mln rise in the amount of capital committed.

Since the half-year end, however, LGM said applications from corporate clients had risen by 68% with restructuring and insolvency disputes to the fore.

Patrick Moloney, chief executive, said: “Market conditions are increasing the demand for disputes finance."

Total invested capital by LGM during the first half was A$39.7mln (£22.2mln), taking the total invested to A$99.4mln, an increase of 189% on the same prior-year period, inclusive of third-party funds.

The US$150mln Global Alternative Returns (GAR) Fund is now 70% committed, added the Australia-based group.

Delays to some cases being resolved meant that there was an interim adjusted loss of A$0.2mln and statutory loss of A$1.4mln though cash receipts from the completion of litigation investments were A$10.6mln, up 15% on the prior year.

Moloney added: "The nature of our business is reliant on parties agreeing to settle a dispute or reaching a court resolution. Consequently, and in line with our conservative revenue recognition, income will flow through at irregular intervals, in line with the timing of these resolutions.

"LCM now manages a mature portfolio of direct investments, a significant proportion of which is 100% balance sheet funded. We are moving into the period where those investments will reach maturity and are very pleased with the way that the portfolio is maturing into realisation.”

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