US-based emerging markets hedge fund Gramercy is expected to generate approximately $90m (AUD135m) annually from its 2023 litigation funding deal with Pogust Goodhead, according to a report by the Australian Financial Review.
Last October, Gramercy invested approximately £450m in UK-based law firm Pogust Goodhead, with the latter claiming it was “the largest litigation funding deal in legal history”.
At the time, Global Managing Partner and CEO Tom Goodhead said that Gramercy’s investment would “ensure we resolve our existing cases successfully” and enable “the financial firepower to hold any company anywhere in the world accountable for corporate wrongdoing”, describing it as “a capitalist solution to the negative externalities of capitalism”.
Pogust Goodhead is currently representing around 700,000 individuals in a class action case against mining companies BHP and Vale over the Mariana dam disaster in Brazil — the largest in English legal history, according to The Guardian.
Last month, the AFR reported that Business Council of Australia, the Australian Chamber of Commerce and Industry and Ai Group expressed concerns over the increasing use of global capital to fund local litigation, suggesting that profit-motivated speculators are frequently involved.
In response, Justice Robert Beech-Jones, the most recent appointee to Australia’s High Court, criticised those attempting to “regulate class actions out of existence”.
The Australian Labor Party strongly supports the increased flow of capital into this area, according to AFR, while the Liberal–National Coalition, an alliance between Australia’s Liberal Party and the National Party, is firmly opposed and has previously attempted to impose strict regulatory requirements on overseas funders.
According to RationalStat, the global litigation funding market was valued at nearly $16bn in 2022 and is expected to grow by 9% annually to $24bn by 2028.
