Manolete Partners Note UK Court of Appeal Backs Move Away from Arkin Cap

Court Ruling

Manolete Partners plc (LON:MANO) have noted a descision from a UK Court of Appeal which has sided with the trial court in the case of Davey v. Money, in which it found that the Arkin Cap is merely a suggestion, and courts are not bound by its limitations.

In a Judgment of significant importance to commercial litigation funders and professional defendants alike, the Court of Appeal has upheld a decision not to apply the so-called “Arkin cap” to limit a litigation funder’s exposure to adverse costs.

The Arkin cap takes its name from the decision in Arkin v Borchard Lines Ltd from 2005. In that case, the litigation funder was ordered to pay costs incurred by the successful defendant, but only up to the amount of funding it had provided to the claimant.

Commercial litigation funders have since drawn comfort from this, in the belief that if they commit funding to an unsuccessful claim, and become exposed to the successful defendant’s costs, they will not be held liable for more than they have paid out.

Steven Cooklin at Manolete Partners CEO, said in response to the news:

“No doubt this judgment will have an impact on some, and possibly all, traditional Litigation Funding models – as clearly the downside risk exposure may now be significantly more than those companies would have modelled when assessing claims, risks and returns.

However, it has zero impact on Manolete’s model. The vast majority of the claims we back are done via an assignment, here Manolete becomes the claimant. The concept of ‘funding a third party’ is simply redundant. On the small minority of cases where we do not take ownership of the claim via an assignment, we have always provided the Insolvency Practitioner (as the claimant) with a full adverse cost indemnity. So dependence upon the Arkin Cap was never a factor for Manolete.”

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Find more news, interviews, share price & company profile here for:
Manolete Partners plc

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