Firm launches funding to help smaller businesses pursue commercial disputes

Law360 Canada (April 1, 2022, 3:53 PM EDT) -- Litigation finance company Erso Capital has announced funding to help small- and medium-sized enterprises (SMEs) in the U.S., U.K. and Canada engage in commercial disputes.

According to a press release sent to The Lawyer’s Daily on March 31, Erso said it “will target disputes that require a funding commitment between GBP £100,000 to £500,000,” i.e., between $164,000 and $820,000 Canadian dollars.

Matthew Amey, a co-founder of Erso Capital, told The Lawyer’s Daily that the funding has two purposes, the first being “to make non-recourse litigation funding accessible to businesses and business owners pursuing smaller value disputes.”

“Second, we see appeal even in larger disputes where perhaps the claimant is in the final stretch but is experiencing costs fatigue, perhaps owing to a budget overrun,” he said. 

Amey added that “traditionally the litigation funding market has served to support very high value claims but struggled to provide smaller levels of funding to lower value disputes.”

“This fund seeks to address that issue by delivering a lower price point than traditional funding,” said Amey, adding that Erso Capital is “looking to close a gap that exists in the availability of litigation funding for businesses and business owners in the U.K., U.S. and Canada with comparably modest-value legal claims.”

The SME fund has been streamlined, said Amey, making it faster for businesses to access funding; “our aim is to deliver decisions, in principle, within seven to 10 days,” he said.

The press release states that Erso Capital “believes smaller business disputes are often overlooked and have not been sufficiently catered for by the litigation funding market to date.”

The money “will initially be accessible to SMEs and individuals acting in connection with commercial activities,” the news release said, also noting that the new funding is in collaboration with its affiliate insurance broker, TheJudge Group. 

“Canadian businesses, like [in] all other jurisdictions, have suffered greatly over the past 24 months,” Toronto-based president of TheJudge Canada, Nick Robson, said in the release. “We welcome the opportunity to be working with our colleagues at Erso Capital to bring competitive litigation funding to the Canadian market.”

James Blick, another of Erso’s co-founders and head of the U.S. operations, agreed that “many U.S. smaller enterprise businesses have suffered during the pandemic, with any available cash often being directed to the business’ survival.”

“Having the ability to use non-recourse funding to pursue viable legal claims could prove a lifeline for many,” Blick said in the press release.

It also noted that the move had been welcomed by litigators, quoting Steven Beahan, head of commercial litigation at Irwin Mitchell in Sheffield, England, as saying “it is refreshing to see a litigation funder that not only invests in cases requiring millions of pounds of capital, but who is also seeking to support those businesses in need of smaller capital amounts, whose legal claims might be no less imperative to the business survival.”

“Ultimately, we want to be able to deliver solutions for the full spectrum of cases a modern disputes practice may handle,” Amey told The Lawyer’s Daily.

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