Got What You Need: UK’s largest litigation funder teams up with HFW and KPMG yo provide “One-stop-shop” for companies needing funding

July 20, 2020

2 min read

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What's going on here?

Augusta Ventures (Augusta), the UK’s largest litigation and dispute funding institution by case volume, has teamed up with Holman Fenwick Willan (HFW), a sector-focused law firm, and KPMG to provide a global “one-stop-shop” for companies needing funding for dispute resolution.

What does this mean?

The partnership targets companies that are locked in disputes as a result of the COVID-19 pandemic, and brings together expertise from HFW, with strengths including aerospace, construction and energy litigation, and KPMG, which offers valuable asset-tracing and enforcement capabilities to clients seeking to recover losses. Meanwhile, as litigation funders provide third-party funding to claimants, Augusta’s capabilities are valuable in the current crisis, where liquidity issues were largely unforeseen and there is little time to make cash provisions to fund the dispute resolution process. Augusta is also differentiated from other litigation funding firms in that it supports claims of a lower value, typically those worth £200,000 or more , allowing it to assist a wider range of companies.

What's the big picture effect?

Law firms should take note given the increasing popularity of tie-ins between litigation funders and law firms, and because the “one-stop-shop” innovation is likely to boost the Big Four’s legal ambitions. 

In recent years, other litigation funders have established partnerships with law firms. Litigation Capital Management Limited (LCM) entered into a tie-in with Clyde & Co, whilst Harbour Litigation Funding collaborated with Eversheds Sutherland and Mischon de Reya, and even seconded its first trainee to Mischon (read our earlier article on that here). Already, many high-profile disputes have been funded, for instance, Therium bankrolled the Volkswagen car owners in the carmaker’s emissions scandal. Access to funding, especially in civil litigation where costs are high, will be an increasingly important factor for clients in deciding whether to undertake a claim and in choosing which law firm to work with. 

Another key concern for law firms has been the Big Four’s legal ambitions. Ever since the liberalisation of the legal industry through the Legal Services Act 2007, the Big Four have been aggressive in expanding their legal capabilities. They hope to employ an integrated services model that covers tax, finance, consulting, information technology and strategy. KPMG’s entry into a tie-up with a law firm and litigation funder to provide expertise on asset-tracing and enforcement of awards carves out a new niche, and may encourage potential claimants, who would otherwise have dropped their claims for fear of not being able to recover damages or enforce awards, to pursue their claims. 

This creates more opportunities for traditional law firms to represent clients in disputes, but law firms must also be able to compete against other firms entering into collaborations with litigation funders to provide the extra premium. This is particularly because of the rising number of insolvencies where asset-tracing is valuable, and because relationships built now can persist in the future. By creating a more diversified portfolio and providing asset-tracing expertise, Augusta, HFW and KPMG have demonstrated that there are many opportunities to create niches within litigation funding, so law firms may want to find creative ways to capitalise on this while the industry still remains in a relatively early stage.

Report written by Su Jia Moh

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