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October 5, 2018

Leaked Litigation Funding Arrangement Shows Funder May Leave Class Members With Nothing

A litigation funding arrangement in an Australian class action shows that the funder may walk away with a 250 percent return on investment while the claimants may get nothing, the Australian Financial Review reports

The arrangement between UK-based litigation funder Augusta Ventures and Canberra-based Adero Law is based on multiples of the legal costs associated with the lawsuit, meaning that the longer it takes, the bigger the cut for the funder. If the lawsuit continues for more than a year, which the article says is common, Augusta will receive a 250 percent return on their expenses and be paid before claimants get anything. In fact, if Augusta spends enough in the course of litigation, the size of their payday may leave claimants owing money rather than getting it.

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