Funding for Group Litigation in England and Wales David Greene Edwin Coe LLP 2 Stone Buildings, Lincoln’s Inn, London WC2A 3TH Tel: +44 (0) / Fax: +44 (0)

Organising classes in England & Wales on the opt in model

Funding Alternatives Self funding Before-the-event insurance After-the-event insurance Lawyers contingency arrangements – conditional fee agreements and damages-based agreements

Third Party Funding Different thinking from lawyers 1 Quantum 2 Solvency 3 Merits 4 Quality of advisors

Funding class claims Change in the air –Opt out –Contingency fees

Worked examples 2,000 consumers purchase timeshare products from a company which misrepresented the product. Company bust. Loans were taken for the purchase of the product which in English law gives rise to a liability for the lender which are high street banks. Each claim worth €17,500; total potential claim €35m. Self funding Before-the-event insurance After-the-event insurance Lawyers contingency arrangements TPF –1 Quantum –2 Solvency –3 Merits –4 Quality of advisors

Worked examples European Commission finding against European widget manufacturers for price fixing; widgets are low value items bought by millions of consumers throughout the EU for approx. €35 each and the cartel upward pricing is gauged at 10% or take the same facts but 40,000 widgets are purchased each year by ten manufacturers at €35,000 each Jurisdiction Self funding Before-the-event insurance After-the-event insurance Lawyers contingency arrangements TPF –1 Quantum –2 Solvency –3 Merits –4 Quality of advisors

Worked examples 250,000 shareholders (in number mainly individuals but in holdings mainly a small band of pension institutions) suffer losses from misrepresentations on trading record included in an IPO prospectus on the LSE and NYSE raising $300m ; the resultant stock drop leads to suspension and loss of 30% in the value in the shares, some $1.70 per share Target Jurisdiction Self funding Before-the-event insurance After-the-event insurance Lawyers contingency arrangements TPF –1 Quantum –2 Solvency –3 Merits –4 Quality of advisors

Worked examples A flood causes substantial damage to a neighbourhood. The cause is said to be a long term problem with flood defences of which the Government agency is aware. The agency should have cured the problem years ago but did not have the money. Household damages run to £200 m. Most householders are covered by insurance. Clients Self funding Before-the-event insurance After-the-event insurance Lawyers contingency arrangements TPF –1 Quantum –2 Solvency –3 Merits –4 Quality of advisors