Local legal financier raises R80 million for commercial litigants during the pandemic
23 Nov 2020
A South African legal financing firm, Taurus Capital, has announced the availability of an R80 million litigation fund. The fund was raised to provide litigants with an alternative means to finance their litigation.
Simply put, litigation funding is an investment in a claimant’s litigation in return for a share of the proceeds provided the claim is successful and recovery is made.
“Although access to justice is enshrined in our Constitution, the doors of the court are often inaccessible to litigants who have claims. Without proper funding, litigants may be forced to abandon their litigation or settle for an amount which bears no resemblance to the true value of the claim. Litigation is a costly exercise, which escalates the closer a case gets to the hearing. We give litigants the opportunity to engage or retain competent attorneys and counsel and the confidence to embark on litigation with the knowledge that they will not be outmuscled legally or financially,“ says Neil Lazarus, a senior counsel who is the chairman of Taurus Capital’s investment committee.
Litigation funding has been permitted in South African law since 2004 but has not yet enjoyed significant adoption in the legal sector. With the announcement of this fund, Taurus Capital is able to provide a litigation funding solution to law firms and litigants based on a well-considered risk-adjusted assessment of the cost versus risk and return for both the litigant and Taurus Capital.
The benefit of financing litigation with Taurus Capital is that the funding is without recourse.
“Our funding is provided on risk. The transaction is an investment, which means we will only be entitled to a return if the outcome is successful. If the claim is unsuccessful, we would have lost our investment and there is no obligation for the litigant to repay any funding provided,” says Taurus Capital Co-founder and Director, Simon Kuper.
Taurus can provide funding for up to 100% of the required legal cost to litigate a matter to finality.
“Litigation funding aligns the interests of a litigant who wants a cost-effective, positive result, and a legal team which is entitled to be remunerated regardless of the result,” says Kuper.
Not only was the R80 million raised during challenging economic conditions, but Taurus Capital is the first litigation funding company in the country to raise a fund of this value.
“Following international best practice, Taurus Capital views litigation as an asset. The transaction provides a solution for both commercial litigants and investors who can achieve significant returns. Our litigation fund is a war-chest for cases that might otherwise never reach a court or arbitration hearing due to a lack of financial resources,” adds Kuper.
Taurus Capital’s funding is guided by its legal risk and investment committees made up of experienced lawyers, accountants, businessmen and private equity professionals.
- The history of litigation funding
- Litigation funding in Africa – Opportunities in this investment vehicle in 2020 and beyond
- R300 million finance available for SA law firms