Insurance giant Allianz is preparing to launch a litigation fund in the
UK, paving the way for a surge of third-party funding in mainstream commercial litigation.
The insurer’s fund, Allianz ProzessFinanz, will launch in the UK on 1 November in High Holborn. The venture will be headed in London by Christian Stuerwald, a specialist in litigation funding who is transferring from Germany. Allianz will be looking to invest in commercial disputes.
The fund, which was established five years ago in Munich and is led by lawyers Arndt Eversberg and Roland Muller, has carried out a number of pilot cases in the UK over the last two years — the success of which has led to a formal presence in London.
Allianz will be looking to build relationships with law firms and after-the-event (ATE) insurers and brokers in a bid to offer a number of funding options, including a product that combines ATE and third-party funding.
Eversberg said: “We see more development in the UK in terms of third-party funding and that is why we are going to be opening an office over here. It is a hot topic which is getting more and more interest from a range of parties.”
Allianz recently funded a successful royalty dispute for former members of rock band Status Quo, Alan Lancaster and John Coghlan.
The case was against Handle Artists Management, the other band members, Francis Rossi and Richard Parfitt, Sanctuary Records Group and Mercury Records. The defendants were advised by Collyer Bristow, Clintons and Russells Solicitors.
Dispute resolution partner Simon Jacobs from West End firm Seddons acted on a conditional fee agreement (CFA) for Lancaster and Coghlan in the dispute, which was heard in the High Court last month. The judge ruled that disputed royalties could be recovered beyond the usual six-year limitation period.
Third-party funding has been thrust into the spotlight in the UK legal profession in recent months. In August Legal Week reported that Herbert Smith had set up a working party to consider the prospect of offering funding to clients. Specialist broker Calunius Capital Funding also secured approval from the Financial Services Authority in July to act as a specialised adviser and intermediary in litigation and general dispute risk. The business claims to be the first broker in the UK to actively advise on third-party funding options.
Clifford Chance (CC) partner and London Solicitors Litigation Association president Simon Davis said: “Given the reduction in legal aid and the difficulties with CFAs, it is unsurprising and welcome that third-party funding should step in to fill the gap.”
Matthew Newick, another CC litigation partner, commented: “This is an interesting development which could give class action activity in the UK and Europe a boost. Third-party funding will start to chip away at the structural differences between UK and US litigation.”
