Category: News
Legal firms are successfully suing Spanish banks for abusive loans to renewable energy development over the past decade.
Jausas, a Barcelona-based law firm spearheading litigation, has detected 20 regional court cases against banks for charging unfair rates on project finance for wind and solar projects.
They involve the use of a highly complex derivative called interest rate swaps (IRS).The courts have ruled in favour of 14 claimants so far. Compensation awarded has been the equivalent of 15-20% of the investment in the wind or solar project.
In April, Spain’s anti-trust authority, CNMC, instigated proceedings against Banco Bilbao Vizcaya Argentaria, Sabadell, Santander and Caixabank for possible unfair trading linked to swap derivatives.
The case followed a complaint by Vapat, owner of 500MW of wind capacity. Further momentum was provided by the decision in September of global litigation finance firm Therium to partner with Jausas to deal with a rapidly growing portfolio of wind and solar claimants.
Acting as a capital risk firm, Therium will put up the money to litigate, charging a percentage of the compensation awarded if the case is successful.
Known cases are the tip of the iceberg, according to Alberto Ceña, CEO of renewables consultants BEPTE. IRS derivatives arose in Spanish renewables project finance in around 2007, and rapidly became widespread. Since then, €6.5 billion has been invested in 6.4GW of wind capacity.
How much of that is susceptible to litigation is unclear, says Therium’s European chief, Oliver Novick. But until 2012’s freeze on new wind capacity, swaps were “very prevalent”, he adds. Novick hopes to work for up to 15 clients in the next two years, and for two thirds of the claims to be won or settled.
IRS derivatives are a complex combination of fixed and variable interest rates. For the banks it was “an over-hedging not-well understood by the developers”, says Ceña. Plummeting interest rates “were not finally transferred to the customer”.
A statement from Jausas, after an analysis of 200 loans with derivatives, said: “We believe that in almost all case banks sold the swaps above the market price in blatant disregard to the law”.
In order for the swaps to be fully declared void, claimants must convince the courts they do not have the sohisticated professional capacity to properly understand the derivative. Small and medium-sized firms are more likely candidates for legal success.
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Therium Group Holdings Limited, a leading global provider of litigation finance globally with over $300 million in committed capital, is launching operations in Scandinavia as Therium Nordic AS, headquartered in Oslo. Therium Group Holdings is one of the largest and most established litigation financing firms in the world.
Therium has identified a substantial market for litigation funding in Scandinavia, with demand being driven by the increasing number of legal disputes, especially in energy and construction, and the high and rising costs of legal claims. Litigation can be lengthy and the costs can be prohibitive. Litigation funding or litigation finance, as it is sometimes referred to, allows individuals and companies to take on litigation and arbitration cases that they might not otherwise be able to afford, and/ or to hedge the costs and risks involved in such matters. Therium pays for all of the costs, including adverse costs in the event that the case is lost, and only receives payment if the case is won.
Henrik Berg is joining Therium Nordic as CEO, Henrik Jensen is joining as Chairman, and Trond Jacobsen as board member. Henrik Berg has more than 20 years of experience as a management consultant in Scandinavia, having worked for firms including PA Consulting Group, Qvartz and Pareto Group. He holds an MSc in economics and business administration from the Norwegian School of Economics and Business Administration, with studies at the London School of Economics.
Henrik Jensen is an experienced lawyer and has been admitted to the Supreme Court of Norway. Henrik founded and is an active owner of two law-firms (Legalis and Legal24) and a legal insurance company (Legal Insurance Group) in Norway and Scandinavia. Henrik completed his first degree in law in Oslo, followed by a Master of Law at the Max-Planck-Institute in Munich, with a thesis on EU copyright-law. Trond Jacobsen has extensive experience as a lawyer and entrepreneur. In addition to Therium Nordic AS, Trond, together with Henrik, founded Legal Insurance Group and Legal24. Trond graduated in law from the University of Oslo, specialising in international law.
John Byrne, Co-founder and CEO of Therium, said: “We are delighted to launch Therium Nordic and introduce litigation finance to law firms, companies and individuals in Scandinavia under the leadership of Henrik Jensen, Henrik Berg and Trond Jacobsen. Scandinavia is an important market for Therium and is a focal point for key sectors that we focus on, such as oil and gas.”
Henrik Berg, CEO of Therium Nordic, said: “Litigation funding will help to solve a key challenge facing claimants when deciding whether or not to pursue a claim, without undermining the law firm industry’s hourly fee business model. Crucially, funding provides access to justice for those who might not otherwise be able to meet the costs of a claim. Therium is the pre-eminent global litigation funding firm and we are excited to develop Therium’s funding propositions to meet the needs of the Scandinavian market.”
Henrik added: “The sharp downturn in the Norwegian oil and offshore industries has given rise to a growing number of claims. Conflicts in onshore infrastructure construction contracts, such as in road and rail projects, are also at a record high. This rising tide of disputes, as well as the fee pressure on law firms, make this an ideal time to launch Therium Nordic.”
Therium Nordic’s initial focus will be to fund individual litigation and arbitration cases. The firm will also review group litigation and class action cases, an area which is expected to see increased activity. Core litigation cases will include breach of contract cases within the oil and offshore industries as well as cases in construction and real estate, seafood-industry insolvency cases, commercial torts, complex commercial litigation, domestic and international arbitral matters, as well as insurance disputes.
Neil Purslow, Co-Founder of Therium, said: “As well as providing funding to meet the costs of a claim, financial directors of companies in the UK, the US and other jurisdictions look to Therium to transform a claim into an asset, by removing the cost of litigation from the company’s balance sheet and freeing up cash flow. We look forward to working with our partners in Scandinavia and helping Scandinavian companies to use litigation funding for such strategic purposes and give them a competitive advantage.”
Therium Nordic is located at Hammersborg torg 3, in the center of Oslo. All enquiries should be sent to post@therium.no.
ENDS
Notes to editors
Therium Nordic AS team
Henrik Berg
Henrik is CEO of Therium Nordic. He has more than 20 years of experience as a management consultant in Scandinavia, having worked for firms including PA
Consulting Group, Qvartz and Pareto Group. He holds an MSc in economics and business administration from the Norwegian School of Economics and Business
Administration.
Henrik Jensen
Henrik is Chairman of Therium Nordic AS. He is an experienced lawyer and has been admitted to the Supreme Court of Norway. Henrik founded and is an active
owner of two law-firms (Legalis and Legal24) and a legal insurance company (Legal Insurance Group) in Norway and Scandinavia. Henrik completed his first
degree in law in Oslo, followed by a Master of Law at the Max-Planck-Institute in Munich, with a thesis on EU copyright-law.
Trond Jacobsen
Trond is a board member of Therium Nordic AS. He has extensive experience as a lawyer and entrepreneur. Together with Henrik he founded and is an active
owner of law firm Legal24 and Legal Insurance Group. Trond graduated in law from the University of Oslo, specialising in international law.
About Therium
Founded in London and Jersey in 2009, Therium is one of the most established global litigation financing firms, with a market-leading track record of
generating superior returns for its investors. In April 2015, Therium secured $300 million to invest in commercial litigation financing, the largest ever
single investment in the litigation funding sector, globally. In April 2016, Therium became the first European litigation finance company to launch a full
service business in North America, Therium Inc., which is headquartered in New York.
Therium has consistently been at the forefront of innovation in litigation finance, pioneering the combined use of insurance tools alongside funding
vehicles, and introducing portfolio funding products into the UK. The firm’s ability to develop innovative funding arrangements complements its rigorous
approach to and experience of funding a wide range of commercial disputes in varying jurisdictions. www.therium.no
Media Enquiries:
Norway/Scandinavia
Henrik Berg
+47 91363615
henrik.berg@therium.no
United Kingdom
Desiree Maghoo
+44 (0)7775 522740
dmaghoo@questorconsulting.com
Therium announces new portfolio funding model
Innovative portfolio funding model launched with first law firm.
Therium Capital Management Limited, the litigation and commercial arbitration funder, has launched a ground-breaking portfolio funding arrangement with the litigation team of private client legal practice Harcus Sinclair and Harcus Sinclair Limited (HSL). Under the portfolio funding model, Therium works with a selected law firm to pursue cases for its clients. Therium establishes a dedicated entity with the firm for that purpose, pooling risk and sharing in returns. The entity can be tailored to suit the needs of the firm, whether covering the whole firm or specific practice areas or geographies. Funding can be provided for both litigation and arbitration, including group litigation.
This new funding approach enables law firms to share risk and reward with Therium on the funded cases, promoting a closer alignment of interest between law firm, client and funder. “We have enjoyed a long and successful working relationship with Harcus Sinclair across a number of cases and are delighted to initiate this new portfolio funding model with them which is the first arrangement of its kind” says Neil Purslow, founder and chief investment officer of Therium. “We are talking to many law firms about the potential that this model offers for their business.”
Harcus Sinclair is known for its practice in acting in group litigation relating to financial services. HSL acts for Claimant Group in the high profile claims against Lloyds Bank arising out Lloyds’ acquisition of HBOS in 2009.
Therium deploys litigation funding to support a wide range of claimants, including the investors in the Lloyds / HBOS litigation. The benefits of this portfolio model are many: for the client, the litigation or arbitration can be fully funded, relieving the client of the cost burden of pursuing the claim. As the law firm shares in the risk of the case and the return, it is
incentivised to achieve a successful result. The model also provides the law firm with cash flow, enabling it to manage its financial exposure and undertake a wider range of contingent work.
“This is an innovative development in litigation funding and demonstrates Therium’s understanding of our needs as lawyers,” comments Damon Parker, founding partner and Head of Litigation at Harcus Sinclair.
Therium was one of the first litigation funders in the UK market. Since its launch in 2009, it has consistently been at the forefront of developments in litigation funding, such as pioneering the use of insurance within its structures to manage risk. Therium funds across a wide range of cases including for group actions, intellectual property disputes, anti-trust / competition cases and in international arbitration, and in industry sectors such as financial services, technology, energy and natural resources.