Litigation funder Bentham IMF has entered into a European joint venture and Asia-Pacific co-funding arrangement with subsidiaries of investment advisory group Elliott Management.

Bentham IMF Executive Director John Walker told insuranceNEWS.com.au the joint venture will open an office in London this week under plans to fund cases mainly in the UK, the Netherlands and Germany – but potentially throughout Europe.

The litigation funding industry in Europe is continuing to see cases related to investments during the global financial crisis, with the region’s economy still struggling to recover.

“In the claims we run – market protection-type claims, consumer claims – we think there is demand,” Mr Walker said.

In the Asia-Pacific region Bentham IMF will offer Elliott the opportunity to jointly fund cases, with an initial budget of more than $8.5 million.

“We are a small-cap company in Australia and doing large claims is a stretch for us,” he said. “We will be able to do more of those with a co-funder, so it assists in risk management across our portfolio.”

Asia-Pacific markets of particular focus include Australia, New Zealand, Singapore and Hong Kong.

The co-funding arrangement could be used for a class action by lawyers Maurice Blackburn over flooding downstream of Brisbane’s Wivenhoe Dam in January 2011.

Bentham IMF has spoken with reinsurers and insurers affected by the floods, and is seeking more participation from those who may have provided business interruption cover.

“That is coming up for filing in about four weeks,” Mr Walker said.

Bentham IMF Chairman Rob Ferguson says the arrangements with Elliott follow the company’s expansion into the US.

“Elliott brings to the table not only considerable funding resources but also experience in the field of complex international litigation,” he said.

“The arrangements significantly bolster IMF’s footprint and funding capability in Asia and Europe and, alongside our existing US subsidiary, complete our global reach.”

Slater & Gordon Practice Group Leader Ben Phi says opportunities exist in Australia for litigation funders as lawyers are not able to charge percentage contingency fees.

But any increased availability of funding or greater competition is more likely to reduce commission expenses than affect the number of cases brought forward, he says.

“I certainly wouldn’t have thought it would change the risks to defendants or insurers,” he told insuranceNEWS.com.au.

Directors and officers are more aware of disclosure rules and the threat of class actions.

“The fact that listed companies are going to be far more mindful of their disclosure obligations will actually be helpful for insurers. It is going to reduce the incidence, you would think, of people contravening the law.”