Tom Glasgow, Managing Director, Omni Bridgeway, said the Indian market has a lot of potential and is untapped with plenty of domestic opportunities. He spoke at India's first Litigation and Insolvency Summit, 2022, which was organized by LegalPay last week, a domestic litigation funding start-up.
Glasgow, who has been with Omni Bridgeway since 2017 said that even though litigation funding is a common concept in the world, it is still relatively new to India, even as homegrown start-up LegalPay has been working to raise awareness of the scope and potential of the segment.
Litigation financing is third-party funding that is used for litigation matters. It is quite common in India for litigation financing, but it is quite common in many developed economies where there are dedicated ventures that specialise in this kind of funding.
The Indian market presents a lucrative opportunity for global investors with thesis of ESG investing, and the pace at which litigation financing has grown over the last decade is phenomenal, said Glasgow.
This assumes significance as data from the Insolvency and Bankruptcy Board of India shows that 5,481 total cases have been initiated against the corporate debtors by the CIRP Corporate Insolvency Resolution Process. There was a start to the liquidation process in 1,703 cases.
In its annual report for the year 2021, Omni Bridgeway stated that it has expanded its geographic presence with remote service, offices, agencies and other arrangements to serve countries like Japan, India, Latin America, New Zealand and Spain.
Litigation funding is increasing in India as more and more law firms and businesses are looking at such funding to fund their legal matters.
A study by LegalPay found that over 40 per cent of the cases it funded originated from Tier I law firms, with around 25 per cent of the matters coming from independent counsels as well.
Since its inception in 2019, LegalPay has underwritten over 1,500 cases of litigation and arbitrations in countries including India, Australia, Singapore, US and Europe.
The LegalPay study also showed that as much as 73 per cent of the cases came from unlisted space, with logistics accounting for the largest chunk at 31 per cent, followed by financial institutions at 28 per cent and constructions at 22 per cent.
Among the 150 veterans who attended the LegalPay event were high profile lawyers, international funders, resolution professionals, investors, venture funds, family offices, banks, non-banking financial companies NBFCs fintech players, asset reconstruction companies ARCs and wealth management companies.
Ashwini Kakkar, a former chairman of Via.com, highlighted the impact of legal financing, shedding light on the impact it creates for the claimants who do not have access to the right set of legal professionals and finances to pursue meritorious disputes against larger players.
In a similar context, Hiroo Advani, founder of Advani Law, shared his thoughts regarding the rising role of funding in arbitrations in India and how it will shape up in the near future and help set up smoother operations for the overall growth of the legal industry.