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Therium vs. Bugsby: A Precedent in Litigation Finance and Asset Orders
The case of Therium Litigation Funding A IC v. Bugsby Property LLC presents a fascinating insight into the complexities of litigation funding and the legal intricacies involved in asset preservation orders within the context of commercial arbitration. This case analysis aims to dissect the various legal arguments, the court's reasoning, and the implications of the judgment for the future of litigation funding agreements.
Background of the Case
Therium Litigation Funding A IC ("Therium"), a litigation funder, entered into a litigation funding agreement (LFA) with Bugsby Property LLC ("Bugsby"), a property company. The agreement was centred around claims that Bugsby pursued against an insurance group. As part of the LFA, Therium was entitled to recover the amount of funding provided, a multiple of that amount, and a percentage share of any recoveries made by Bugsby.
Legal Proceedings
The proceedings took a turn when Therium applied for an asset preservation/freezing order against Bugsby under section 44 of the Arbitration Act 1996. This application was made following a similar application by another litigation funder, Omni Bridgeway (Fund 5) Cayman Invt. Ltd ("Omni"), which was granted by Cotter J. Therium's application aimed to secure the settlement monies received by Bugsby following the compromise of a dispute with entities in the Legal & General Group ("L&G").
The Court's Decision
The High Court of Justice presided over by MR JUSTICE JACOBS, delivered a judgment that delved into the proprietary claims asserted by both Omni and Therium. A pivotal point of contention was whether there was a serious issue to be tried concerning these proprietary claims. Bugsby's defence hinged on the Supreme Court's decision in R (PACCAR) v Competition Appeal Tribunal, which had implications for the understanding of "claims management services" as defined in section 58AA (3) of the Courts and Legal Services Act 1990.
Analysis of the Judgment
The judgment of the High Court is significant for several reasons. Firstly, it clarifies the position of litigation funders in the context of asset preservation orders. The court's approval of Therium's application, despite the PACCAR decision, indicates a nuanced approach to the enforcement of LFAs. Secondly, the case highlights the importance of clear terms within LFAs, especially concerning the entitlement and distribution of settlement monies.
Implications for Litigation Funding
The Therium v. Bugsby case underscores the evolving landscape of litigation funding. The judgment may influence future agreements and the approach of funders and funded parties alike. It also raises questions about the role of the judiciary in interpreting LFAs and the extent to which litigation funders can secure their investments through legal mechanisms such as asset preservation orders.
Conclusion
The Therium Litigation Funding A IC v. Bugsby Property LLC case serves as a precedent-setting example in the realm of commercial arbitration and litigation funding. It demonstrates the legal system's adaptability in addressing the complexities of modern financial arrangements and the protection of interests within the framework of commercial disputes.
The case is a reminder of the delicate balance between the rights of the funded parties and the security interests of the funders. As the industry continues to grow, the legal principles established in this case will likely be referenced and built upon in subsequent litigation funding disputes.
References
: Therium v Bugsby - [2023] EWHC 2627 (Comm)
: Judgment of the High Court of Justice of England and Wales [2023] EWHC 2627
: R (PACCAR) v Competition Appeal Tribunal [2023] UKSC 28
: Third-Party Funding Agreements: An Analysis of Therium Litigation Funding v Bugsby Property LLC 2023 EWHC 2627 (Comm)
: Commercial Court grants asset preservation order in favour of litigation funder despite PACCAR
- The High Court approved Therium's application for an asset preservation order against Bugsby, marking a significant moment in litigation funding jurisprudence.
- The case clarified the enforcement of litigation funding agreements (LFAs) and the proprietary claims of litigation funders on settlement monies.
- Despite the Supreme Court's decision in R (PACCAR), the judgment favoured a nuanced approach to litigation funders' rights under section 44 of the Arbitration Act 1996.
