Litigation funder Bentham IMF expands to Europe

By Swati Pandey

SYDNEY, March 26 (Reuters) - Australian litigation funder Bentham IMF Ltd IMF.AX said on Wednesday it will start funding lawsuits in Europe in the next two to three months after signing a joint venture with U.S.-based investment advisory firm Elliott Management Corp.

Sydney-based Bentham IMF is already backing lawsuits in the Netherlands related to billions of dollars of toxic derivatives created by Royal Bank of Scotland RBS.L and rated triple-A by Standard and Poor's (S&P).

Litigation funders provide financing for lawsuits in exchange for a share of any settlement or judgment and have been involved in cases against Chevron Corp CVX.N and Apple Inc

AAPL.O among others. If the litigant loses, it does not have to repay the financial investor.

Bentham IMF has been credited with pioneering the litigation funding industry in Australia, where a favourable regulatory environment and a number of high-claim class actions have proved highly profitable in recent years.

"Europe is a lot bigger market than Australia," Bentham IMF Executive Director John Walker told Reuters by phone. "Over time we want to develop human resources and expertise in Europe and do similar things as we are doing in Australia, funding claims against banks, insurance companies and other large corporates."

Walker, who will head Bentham IMF's involvement in the joint venture, declined to give the initial budget for the joint venture. He also declined to give details on the potential cases and whether they would include further claims against S&P.

Bentham IMF and Elliott Management will jointly fund cases in Asia Pacific with an initial budget of more than A$8.5 million ($7.77 million).

The litigation funder's case portfolio stood at 29 cases with an estimated claim value of about $2 billion at the end of 2013.

It kicked off the international legal action against S&P and ABN Amro in Australia where the case it filed in the Federal Court marked the first time a rating agency had faced trial over the complex financial products widely cited as one of the factors that triggered the 2008 global financial crisis.

Bentham IMF made A$8 million from a subsequent landmark judgement by the Federal Court in November 2012 that found S&P deceived 12 local government councils that bought credit derivatives, saying they should never have been given triple-A ratings.

An appeal by S&P and ABN Amro against that ruling is expected to be decided within two to three months, Walker said, while the Netherlands case is due to run for a couple of years.

A second Australian class action lawsuit against S&P was filed in April last year.

($1 = 1.0933 Australian dollars)

(Editing by Matt Driskill)

((swati.pandey@thomsonreuters.com)(+61 9373 1817)(Reuters Messaging: swati.pandey.thomsonreuters.com@reuters.net)(twitter.com/swatisa ys))

Keywords: AUSTRALIA BENTHAM IMF/