At VWM Capital, we offer our investors a unique proposition. Our strategic focus on funding a high volume of ATE insurance-backed litigation claims delivers on two fronts:
- It allows us to fund cases that achieve ESG investment goals by bringing to court claims for people who could otherwise not afford the legal costs.
- Second, the high volume of cases in the portfolio helps to ensure that investor risk is diversified. Furthermore, as all the claims we fund must be covered by ATE insurance, deployed capital is protected even in the unlikely event a case loses.
How we use the latest AI-enabled technology to achieve our strategy
We use industry-leading lawtech to enhance our case preselection, case vetting, and post-funding checks. This is what makes it possible for us to fund a high volume of small cases. The administrative burden required to review each of these cases manually would be prohibitive, so we use algorithmic technology to identify cases with a high likelihood not only of reaching a successful resolution, but also of settling early before reaching court.
Shortlisted cases are then reviewed by a team of legal experts and our own investment managers before being accepted into the portfolio.
An overview of the ESG investment opportunities we provide
Summarising the sorts of cases we make available to funders, VWM Capital Co-Founder James Scragg says:
“There’s a ‘David and Goliath’ scenario with our litigation funding. We finance claims where claimants would otherwise struggle to take on defendants with a high level of resources.
In doing so, we are able to offer attractive investments with the prospect of high returns, and we are increasing access to justice for many.”
The cases we fund include:
Housing disrepair
Social housing disrepair is a major issue for tenants across the UK, but our litigation funding is helping those affected to seek justice.
We believe that affordable housing should not be neglected, but it sadly often is. The government’s English Housing Survey reveals that more than half a million social homes in England fail to meet basic health and safety standards.
Commenting on this, Clive Betts, chair of the government’s Levelling Up, Housing and Communities Committee, said: “Too many social housing tenants are living in uninhabitable homes and experiencing appalling conditions and levels of disrepair, including serious damp and mould, with potential serious impacts on their mental and physical health.”
Despite having undeniably strong cases, without third-party legal financing it would be impossible for many vulnerable families to seek justice and improve their circumstances.
PCP car finance
The sheer scale of undisclosed commissions estimated to have been taken as part of car finance deals is staggering.
At one stage, the Financial Conduct Authority (FCA) estimated that a staggering 95% of UK car finance PCP agreements may be affected and are “leading to consumer harm on a potentially significant scale”.
There is now a significant amount of case law when it comes to car finance undisclosed commission claims.
This includes:
The vast majority of claimants are everyday people with limited funds. Most of these cases, once funded, are expected to settle well before reaching court – meaning we can target compound returns by reinvesting case payouts within the term of the investment.
Subprime mortgages
Many experts believe that subprime mortgage undisclosed commission claims could end up eclipsing those related to PPI mis-selling.
Subprime refers to the below-average credit score of the individual seeking a mortgage. These vulnerable borrowers are considered a higher risk to the lender.
Millions of cases exist where subprime mortgage customers were overcharged (often by household name lenders) in the form of undisclosed commissions.
You can read about examples of the strong precedent backing these cases – and the scale of cases available for funding here.
Business energy
There has been an explosion in business energy claims in recent years, following a 2020 investigation and damning report by the Office of Gas and Electricity Markets (Ofgem).
Ofgem found evidence of widespread mis-selling and undisclosed commissions affecting often small or micro businesses with limited funds.
Such hidden fees represent a clear breach of legal obligations outlined in Ofgem’s Standards and Regulations and the UK government’s Consumer Protection from Unfair Trading. If these violations are taken to court, those affected will most likely be eligible for compensation.
There are millions of business energy arrangements out there that potentially involve undisclosed commissions, and many small businesses affected will require litigation funding to gain legal redress.
Japanese knotweed
Many claims against the spread of Japanese knotweed, and the potential damages and property depreciation it can cause, will need to take on the financial resources of Network Rail, local authorities and other large landowners whose land the plant has spread from.
Leading knotweed experts Environet regularly updates its heatmap of where the plant has been found and currently estimates that “approximately 5% of homes across the UK are affected”.
As there is no legal requirement to remove the invasive plant, the burden is placed on affected householders to take legal action to remedy the financial loss or material damage caused from the plant spreading from neighboring lands.
Read more about the ever-stronger legal precedent backing cases of damage caused by knotweed here.
ESG investments in a risk diversified portfolio
There is a rich pool of meritorious cases out there that require third-party funding. Many of these will be settled before they even reach court.
Our ESG-driven funding strategy is made possible by our innovative use of AI-based technology. Discover more about our unique approach to litigation funding.