Third Party Litigation Financing Funds Delve Into Trade Secrets Matter

We thought this an interesting topic for you to consider - funding of trade secrets litigation by investors unrelated to the firms or the parties involved in the litigation.

MarketWatch is reporting that U.K. commercial dispute investor Burford Capital on Monday announced its first two investments since an initial public offering on the Alternative Investment Market in London last month. The first case involves theft of trade secrets and breach of contract; it is set for trial in a U.S. federal court in May 2010.

Burford will invest $2 million to cover getting it to trial and some legal fees, with potential returns between 35% to 67% of settlements or judgments. The second is shareholder dispute over the application of proceeds from the sale of a business, with a hearing scheduled for February 2010. Burford has invested $2.3 million and could see a return three or four times that amount.

These are interesting arrangements to watch play out. You can read this piece here from AmLaw Litigation Daily regarding a case involving third party litigation financing where the third party wasn't happy with a 10% return and the arrangement itself resulted in litigation.