Interview with: Neil Purslow, Therium Group Holdings

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Therium Group Holdings Limited

How has the litigation finance industry evolved since you established Therium in 2009?

The industry has matured significantly. The number of funders in the market has increased and legal finance is now seen as an asset class with investment interest from sophisticated institutional investors including pension funds, endowments, asset managers, hedge funds and sovereign wealth funds.

There has been a huge amount of diversification in the industry over the last decade too and the range of products available continues to grow. Legal finance does not just mean single case funding anymore. It includes portfolio financing, law firm financing and award monetisation. As one of the first funders in the UK market, Therium has been at the forefront of innovation in the industry. For example, we were one of the first to provide law firm financing through a combination of debt and equity investment.

The legal finance industry is a very exciting place to be as it continues to grow and evolve in order to provide capital that helps to uphold the rule of law and access to justice.

What distinguishes Therium from other funders in the market?

Therium stands out thanks to our strong 12 year track record, experience across investment types and our global footprint. Therium’s approach is that our investment managers take cases and investments through their entire life cycle from origination to completion, so clients can develop a relationship with their investment manager who has a deep understanding of the case and its nuances. This allows us to offer excellent client service and helps us to attract the best talent.

Therium is an innovative firm. We have been among the first in the industry to execute new deals and we are continually developing innovative ways of deploying capital and investing in complex cases, to better serve our clients.

What is the expected impact of the economic downturn on the funding industry?

Litigation funding is an uncorrelated asset class, so we anticipate that investors will continue to want to commit capital to the asset class with experienced managers who have a track record, as they seek to diversify their portfolios.

In addition, litigation funding is an ESG investment. It helps to advance a number of the UN’s Sustainable Development Goals (SDGs). In particular, it contributes to goal 16, which is about upholding the rule of law, improving access to justice and holding bad actors accountable. The cases that funding supports such as emissions litigation and equal pay claims contribute to the advancement of other UN SDGs.

How do you expect the UK disputes funding market to evolve in the next 3 years?

The legal finance industry in the UK will continue to innovate. We are seeing a greater range of products coming to the market, especially in judgment and award monetisation and law firm credit.

In addition, awareness amongst corporates of how litigation funding can be used as a corporate finance tool is growing. By using legal finance, companies can pursue meritorious claims to seek damages for losses suffered, without using their own cash flow, thereby keeping capital within their business to fund growth. As legal budgets tighten, we expect to see legal departments showing increasing interest in using external capital in order to find savings.

We expect the development of the secondary market to gather pace over the coming years too. As this develops, it will attract interest from a greater range of investors with different risk appetites.

Decisions made by the Competition Appeal Tribunal and in securities litigation in England and Wales over the coming years will impact the types of cases that can be brought. We expect to see decisions in both areas which will provide greater clarity on some of the open points.

Beyond the UK, the European Representative Action Directive, which requires every member state to have a collective redress regime in place by June 2023, will increase the number of class actions across Europe, many of which will require funding. More broadly, we are seeing the increased adoption of legal finance around the world in jurisdictions including Singapore and Ireland because of the benefits to society and to business.