In a legal saga with high stakes, litigation funder Therium has secured an asset preservation order for a £27 million ($32.8 million) settlement. This settlement was awarded to a former customer, Bugsby Property LLC, after a contentious battle for London’s Olympia Exhibition Center. However, the landscape shifted dramatically following a landmark Supreme Court decision regarding litigation funding, and the question of enforceability now looms large.
Uncertain Legality Surrounds Therium’s Financing Arrangements
High Court Judge Richard Jacobs delivered a crucial verdict on Friday, preserving Therium Litigation Funding A IC’s hold on the substantial settlement. Still, he emphasized that the enforceability of Therium’s financing agreements with Bugsby Property remains shrouded in perplexity. This legal conundrum stems from the recent Supreme Court ruling in the case of PACCAR Inc., which cast a shadow on the use of litigation funding agreements in opt-out class action proceedings.
Therium £27M Property Settlement : Judge Defer Decision to Arbitrators
Judge Jacobs recognized the gravity of the matter, stating that it’s not the court’s role to make a definitive judgment at this juncture. Instead, the ultimate resolution of this legal enigma will fall to the arbitrators. Awaiting arbitration, an injunction now compels Bugsby’s solicitors, Candey Ltd., to withhold the settlement, a fortune of £27 million, from the company’s clutches.
The Ongoing Legal Tug-of-War
Bugsby Property, buoyed by a triumph in July 2022, walked away with £14.9 million in damages and legal costs. This windfall came in the aftermath of a High Court verdict affirming their right to compensation for a “lost chance” in their endeavor to secure vital funding for the Olympia Exhibition Center. Legal & General Group and its subsidiary, LGIM Commercial Lending, had originally committed to an exclusivity agreement with Bugsby but later switched allegiance to Yoo Capital, leading to a £296 million property acquisition.
Thorny Claims and Outstanding Debts
While it seemed like a tidy resolution, Bugsby’s joy was short-lived. Their elation waned when they realized that the damages awarded did not suffice to cover the various costs, including what was owed to litigation funders, solicitors, and insurers. Therium contended that it was entitled to more than £16 million under their funding agreement, while Omni Bridgeway (Fund 5) Cayman Invt. Ltd. sought over £13 million. Adding to the complexity, Bugsby’s former solicitors, Stewarts Law LLP, pursued a claim of over £652,000, with an outstanding insurance premium of £1 million.
The Freezing Order and Legal Upheaval
As the legal jousting intensified, Therium sought a freezing order in early October when Candey Ltd. signaled its intent to transfer the settlement sums to Bugsby. Bugsby’s legal team sought to undermine the foundation of the funding arrangements, asserting that the UK Supreme Court’s decision to strike down damage-based funding agreements had disrupted the financing landscape for expensive litigation. These agreements had historically underpinned the litigation funding market, causing consternation among funders who had to find new avenues to finance major class actions.
Dueling Interpretations of the Supreme Court Ruling
Bugsby seized on the Supreme Court’s decision, arguing that Therium’s compensation hinged on damages recovered, rendering the agreement unenforceable. In contrast, Therium contended that the Supreme Court’s ruling should be applied narrowly, allowing them to recover the amounts disbursed, plus a “three times multiple of that amount.”
A Prudent Pause for Consideration
In a legal maelstrom, Judge Jacobs displayed prudence and refused to pass judgment in either party’s favor. Citing the “very recent” nature of the Supreme Court decision, he highlighted that this case is among the first to grapple with its implications. The judge wisely acknowledged the complexity of the situation, stating that it warrants careful deliberation.
Therium £27M Property Settlement : Therium’s Defense of Rights
A spokesperson for Therium emphasized their pursuit of the preservation order, highlighting “a series of failed attempts by Bugsby to avoid paying what is owed to litigation funders.” This move aims to prevent Bugsby from reaping the benefits of the litigation to the exclusion of those rightfully entitled.
