Therium Litigation Funding A IC v Bugsby Property LLC
[2023] EWHC 2627 (Comm)
Omni Bridgeway (Fund 5) Cayman Invt Limited v Bugsby Property LLC & Anor
3 November 2023
[2023] EWHC 2755 (Comm)
High Court
Bugsby wanted extra money from the funders because an injunction stopped them from making money in a new business. The judge said Bugsby's plan was too risky and uncertain to justify more money, and the funders were likely to pay up anyway because they'd be in big trouble otherwise.
Key Facts
- •Bugsby Property LLC applied for fortification of cross-undertakings in damages provided by litigation funders Omni Bridgeway and Therium.
- •The fortification sought was for amounts exceeding Bugsby's estimated loss from granted injunctive relief.
- •Bugsby claimed potential loss from inability to use settlement proceeds in the litigation funding market.
- •Omni and Therium argued insufficient evidence to justify fortification and highlighted their financial strength and reputational risk.
- •Bugsby's claim rested on potential co-funding arrangement with Bench Walk Advisers, pending due diligence and approvals.
Legal Principles
Applicant must show a good arguable case of loss caused by the injunction and capable of intelligent estimation.
Energy Venture Partners Ltd v Malabu Oil & Gas Ltd [2014] EWCA Civ 1295; PJSC National Bank Trust v Mints [2021] EWHC 1089 (Comm)
The ‘good arguable case’ test requires more than a merely arguable case; it needs a solid credible evidential foundation for the claimed loss.
Gee: Commercial Injunctions 7th edition, paragraphs 12-032 – 12-033
Outcomes
Bugsby's application for fortification dismissed.
Bugsby failed to establish a good arguable case that the claimed loss would be suffered due to the injunctions. The potential loss was deemed speculative due to the lack of firm agreements and inherent risks in the proposed litigation funding venture.
Funders' argument regarding their financial capability to meet the cross-undertaking was also deemed not necessary to fully address, but the judge indicated that even this argument would have been ruled in favor of the funders.
Omni and Therium provided sufficient evidence of their financial strength and the severe reputational damage they would suffer from defaulting on their cross-undertaking.
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