Litigation Led Investments Alternative Investment -Extraordinary Returns !

How To Profit From LITIGATION FUNDING

Third-Party Litigation Funding is based on an individual (or commercial entity) entering into an agreement to fund a lawsuit or legal claim, in which they have no prior interest, in return for an agreed share of any proceeds that result from the successful outcome of that case.

This agreement may take the form of;

o a fixed percentage of any amount awarded

o a multiple of the actual funding provided

o a combination of the two.

What is Litigation Funding?

Why is it needed? The real benefit of Litigation Funding is that it can provide an option for a party that either does not have the resources to fund a claim or wants to limit the resources that it has to commit to fund a claim.

A company, for example, may have to put aside funds for litigation that could have been used for more strategic purposes, i.e. Research and Development, Marketing, etc.

Many legitimate lawsuits never see the inside of a court room due to the enormous costs involved and many more cases fail to go the distance simply because the plaintiff runs out of money when fighting deep pocketed defendants.

The advent of litigation funding has somewhat removed this cost barrier and enables everyone to have access to

justice.

The Litigation Funding Market o Commercial Litigation Funding has existed for over 30 years but until recently was only available to hedge funds, insurance companies and other financial institutions.

o Global Litigation costs are predicted to exceed 300 billion US Dollars by the end of 2012

o Large commercial institutions are now heavily involved in Litigation Funding, showing enormous profit margins to their shareholders from successfully settled cases.

o Recent examples of capital raised in the UK for investments into Litigation Funding are:

Allianz GBP160 million

Juridica GBP100 million

Burford Capital GBP 80 million

In a recen t

su rvey o f

l ead ing UK

compan ies ,

the cos t o f

l i t i ga t ion was

the #1

reason they

abandoned

the i r case

Reasons why? - Transferring the risk

Without Funder WIN LOSE Costs (300,000) (300,000)

Damages 2,000,000 0

Costs recovered 200,000 0

Other sides Costs 0 (200,000)

1,900,000 (500,000)

With Funder Costs 0 0

Damages 1,200,000 0

Costs recovered 0 0

Other sides Costs 0 0

1,200,000 0

A very basic example of why someone may require Litigation Funding

How does it compare as an investment?

How does it compare as an investment? Traditional investments, such as shares or property, suffer from constant volatility and are

invariably ‘correlated’ (i.e.. linked in some way to global or national influences).

Litigation Funding offers a totally ‘non-correlated’ investment opportunity, providing

realistically achievable returns between 12-25% per annum.

These returns are possible because all cases accepted for funding have passed extensive

Due Diligence by legal experts and been judged to have at least an 65%+ chance of being

settled successfully.

Capital Protection is through a combination of up to 4 separate tiers of protection - in the

unlikely event that a case is lost.

The Litigation Funding industry is one of the most scrutinized investment areas, with the

legal fraternity ensuring complete transparency.

And most importantly – 95% cases are settled out of court within a reasonable time-

frame, which will offer a clear EXIT STRATEGY to investors.

In 1998 the UK government were concerned about the legal system and in particular the rapid rise in costs to pursue litigation and conducted a major review of the UK legal system

History of Litigation Funding

The reason for this review revolved around 3 problem areas

1. Spending on Legal Aid was doubling every 5 years

2. The rise of costs pursuing a legal case (solicitor fees and court costs)

3. The appeal system was being congested with large companies dragging cases out

(David vs Goliath)

The result of the review brought about the ACCESS to JUSTICE ACT in 1999 which changed

the law to allow privatisation of 3rd Party Litigation Funding which essentially allowed

companies/individuals to provide funding to people /companies that needed itΦToday it is COMPULSORY for solicitors/barristers to inform their clients about all of the

options available to them for funding a potential case.

Commercial disputes

Trademark infringement

Breach of contract

Shareholder action

Wrongful trading

Class Action cases

International Arbitration

What Type of cases are funded?

What are the case selection criteria? All cases considered for Litigation Funding go through a strict Case Selection process.

Criteria include;

o Cases must be approved and passed by an expert legal selection panel

o Cases must have a predicted settlement figure in excess of $2,000,000

o The case must be judged to have an 65%+ chance of success

o The defendant must have the ability to pay any settlement amount/judgment

o The legal costs of pursuing the case must be proportionate to the size of the claim

o The case must be insurable

The Risks and Rewards

o Up to a 3 Year investment period

o Investment spread over a portfolio of cases

(typically 3-5 cases)

o Capital is 100% principally protected using a

combination of 4 separate tiers of protection.

“After The Event ” (ATE) Insurance

o Covers all of opponents costs

o Covers all of our costs including insurance premiums & dividend costs

o Ensures return of investors’ capital

PRINCIPAL PROTECTED UNITS

Multiple layers of Principal Protection 1. Each case is reviewed by SIX legal experts and commercial

practitioners and then an Independent Legal Review panel prior to being accepted for funding

2. All cases are insured with an ATE insurance policy by (minimum) ‘A’ rated insurers

3. Contingent Loss Insurance that covers any costs not covered by the ATE insurance policy

4. Redemption Account- which provides absolute priority for payment of principal amounts to all Centaur Unit holders

o High Premiums –typically 20-30% total costs

o High percentage of wins

o Pick and choose the cases they insure

o Odds heavily stacked in their favour

Why would insurance companies take the risk?

o Can NEVER afford a judgment to go against them

o Sets a precedent

o Open up the flood gates for similar claims

o Bad publicity can drastically affect share price

WHY DO SO MANY CASES SETTLE OUT OF COURT?

TH

E R

ET

UR

NS

What are the likely returns?

The Notes guarantee a ‘Fixed Return’ of 9%* per annum, paid 6 monthly (4.5%), for a term of 36 months. In addition, a loyalty bonus of 9%* is paid upon maturity.

(Total equivalent to 36%* if held to full term)

In addition, monies are invested in the entire portfolio of cases and a ‘Win Bonus’ of 20% is paid prorated upon the portion of monies invested in each successful case.

For example, if your £10,000 was used to fund 5 cases of £2,000 each, you would receive an additional £400 for each of those successfully concluded cases.

If cases settle early, the Principal could be re-invested into another case so that you have the potential of achieving multiple win bonuses. Capital is 100% principally protected using a combination of 4 separate tiers of protection.

* Conditional on being held to full maturity – otherwise pro-rated for term of investment period

PRINCIPAL PROTECTED NOTES

Case 1 Case 2 Case 3 Case 4 Case 5

Investment 2000 2000 2000 2000 2000

Year 1 - 9% 180 180 180 180 180

Year 2 - 9% 180 180 180 180 180

Year 3 - 9%* 180 180 180 180 180

Maturity - 9%* 180 180 180 180 180

Known return 2720 2720 2720 2720 2720

Result WIN WIN X WIN WIN

Win Bonus -20% 400 400 - 400 400

Total Return 3120 3120 2720 3120 3120

Total Returned Over 3 Years GBP 15,200* or 52%* * Conditional on being held to full maturity – otherwise pro-rated for term of investment period

TIME LINE OF INVESTMENT Investment Time Line

Start--------------------1Y---------------------2Y---------------------- 3Y

Case 1 --------------------------------------- WIN

Case 2 ---------------WIN ------------------------- LOSE

Case 3 --------------------LOSE -------------------------- WIN

Case 4 ---------------------------------------WIN

Case 5 -----------------------------------------------------------------------------

Cases 1 & 4 Win - so a 20% WIN bonus is paid out, payable when the next dividend period is due. Original Capital invested in these cases is returned at 2 year period along with 6% maturity bonus

Case 2 Win - so a 20% WIN bonus is paid out, however money is reclaimed by ATE and this is reinvested into another case. Second Case Loses so no extra WIN bonus is paid. Capital is repaid, dividends are paid for 28 months and maturity bonus of 7% (prorated on 28 months)

Case 3 Loses so no WIN bonus is paid, ATE is claimed & this is reinvested into 2nd case. 2nd Case Win - so a 20% WIN bonus is paid out, Capital invested in this case is returned at 2.5 year period, dividends are paid for 30 months and a 7.5% maturity bonus is paid (prorated on 30 months)

Case 5 is not completed before the three year time frame, investors are given the option to pull out and get their Capital back, keeping their interest payments, but forfeiting a WIN bonus OR continue to participate in the case for which they will receive an equivalent dividend payment for as long as the case continues and if it was successful receive the WIN bonus

Note: Below are examples only

Track your investment

Clients can monitor cases and their investment information along with updated progress reports through a personalised, secure online Portfolio Tracker.

What is the next step?

If you would like to learn more about this exciting non-

correlated investment product, please contact мнмπƛƴǘŜNJƴŀǘƛƻƴŀƭΦ