Published on:

An Australian funder of litigation, IMF, publicly traded and with a long track record

IMF (Australia) Ltd. Is a publicly-traded investor in litigation. A long profile from The Asian Lawyer, Summer 2011 at 17, explains how its founder, Hug McLernon started funding cases in 1989 and took his company public in 2001. It currently has around $1.7 billion in active claims under management (See my post of May 21, 2009: lawsuit financing with 8 references; and April 11, 2011: hedge funds and investors in litigation with 9 references.).

The Australian legal system differs significantly from the U.S. legal system in several respects that matter to third-party funders of litigation. Contingency fees are restricted, class actions have less formality and scope, there are no punitive or exemplary damages, discovery has less burden, and losers may have to pay the winner’s legal fees. Even so, IMF has thrived, in part by being very picky. McLernon estimates IMF funds less than five percent of the 350 cases it studies each year. Once it puts in money, IMF gains, and exercises, a considerable amount of control over the litigation.

Although much smaller than IMF, other Australian firms invest in litigation. The article mentions Quantum Litigation Funding and Litigation Lending Services Limited. It also mentions Harbor Litigation Funding, active in Europe.