The Financial Times has written an article about the Therium-funded Post Office case.
Third-party funders helped unlock decades of injustice suffered by 550 sub-postmasters.
Warriors for social justice or profiteering ambulance chasers? The world of private litigation funding will rarely get a better case in their favour than the Post Office one.
The verdict last week quashed the criminal convictions of 39 sub-postmasters. It was the culmination of years of legal wrangling and decades of injustice in which the state-owned Post Office criminalised hundreds of its own staff, ruining lives and livelihoods and causing untold heartache to those accused of false accounting because of flaws in the IT system.
The former Post Office chief executive Paula Vennells this week stepped down from the boards of Wm Morrison and Dunelm, and from her duties as a Church of England minister. She had also sat on a group advising the Church on ethical investing.
Under her leadership from 2012 to 2019 the Post Office took an aggressive legal strategy against a civil case brought by 550 sub-postmasters, dragging out litigation and driving up costs, even as evidence mounted that the Horizon system was at fault. It was the outcome of the civil case that unlocked last week’s result.
On the other side of the scorched earth legal strategy was a team backed by a litigation fund, a type of case financing historically associated with the hedge fund world and sometimes derided as ethically questionable or even a threat to the legal system.
The two are connected. High court battles are astronomically expensive. Defendants try to drive a wedge between claimants and third-party funders by running up costs and delaying tactics, in the hope the latter might walk. Funders, such as Therium in the Post Office case, face total loss if a case goes against them and can be called upon for more money as costs ratchet up (even as expected claims fall).
That is one reason this type of funding doesn’t come cheap. Funders receive their investment back, plus a multiple of their costs or a share of the eventual award. Given that the “loser pays” UK model rarely covers all legal costs, this also diminishes the pot left for the claimants.
In the Post Office civil case, the sub-postmasters were left with £12m to share from a £58m settlement. Further civil cases are likely to follow.