December 14, 2020 BY JORIS RIETBROEK
Van Benthem & Keulen is the largest law firm to date to partner with Liesker Litigation Funding. The move will allow clients of the Utrecht law firm to use litigation funding for business disputes with an interest of at least 500,000 euros.
Liesker Litigation Funding in Breda has existed since 2011 and focuses on financing high-potential, mostly business claims. An outside law firm then handles the proceedings, usually for a fixed fee. If a case wins, Liesker collects 30 percent of the proceeds. To this end, Liesker is looking for more established collaborative partners, and the interest from the corporate legal profession is clearly there. Last year, collaborations with Rotterdam law firms Ploum and Ten Holter Noordam were already announced.
That’s where Van Benthem & Keulen comes in now; for the Utrecht-based firm, this collaboration is a kind of extension of the “Litigation Valuator,” the tool the firm launched three years ago that gives clients the most accurate insight possible into the steps and costs of specific legal proceedings.
The litigation funding option is a next, additional step in this process, said Marcel Ruygvoorn, lawyer and partner in Commercial Contracts & Dispute Resolution. “We want to be able to offer clients both financial and procedural transparency about the expected outcome. By partnering with Liesker, we can now completely unburden our clients by not only controlling costs, but also hedging the associated financial risk, if desired.”
In practice, this works as follows. If clients wish, Van Benthem & Keulen can refer business disputes to Liesker. The lower limit of financial interest is 500,000 euros. If Liesker considers the case promising and decides to fund it, it takes over the risk from the proposing party. If the case wins, litigation costs are met from the proceeds and the remaining amount is divided between client and lender according to a 70/30 ratio. In case of loss, the claimant remains immune from costs.
Both the Litigation Valuator and litigation funding are tools that can remove barriers for clients to litigation, says Johan Koggink, office director of Van Benthem & Cologne. “Attorney fees are sometimes difficult to estimate, and there is always the chance that the judge will reject a claim. That was the reason for introducing the Litigation Valuator. With litigation funding, we can remove another possible obstacle. We see in the countries around us that litigation funding is gaining popularity. In the Netherlands it still needs to mature more. In the long term, I expect that process financing will become more and more attractive for clients, and that we will eventually guide more proceedings as a result.”
According to Willem van Nijnanten, CEO at Liesker Procesfinanciering since the beginning of this year, litigation funding is now increasingly being used in business disputes in the Netherlands as well. But not nearly as much as in, say, the United States, where it is a billion-dollar business in addition to being the most normal thing in the world.
“Remarkably, I still regularly have to explain to lawyers here what litigation funding is,” he says. “Or lawyers fear that we also take the entire case out of their hands, but that is definitely not the case; the lawyer handles the case. We only offer the opportunity to fund high-potential cases, which is beneficial when a company does not have the budget to litigate itself.” It is unclear in how many Dutch cases litigation funding is used; no figures are available on this.
After Ploum, Ten Holter Noordam and Van Benthem & Keulen, Liesker is still looking for four to five more permanent cooperation partners in the legal profession, Van Nijnanten said. “Regular partners are important to properly experience each other’s way of working and to eventually do business together back and forth.”