PODCAST | The business model for litigation funding in SA

Litigation funding is the focus in this edition of Business Day Spotlight. Host Mudiwa Gavaza is joined by Gary Sweidan, co-founder and director of Taurus Capital, a litigation funding firm. 

Litigation funding is an investment in a claimant’s litigation in return for a share of the proceeds, provided the claim is successful and recovery is made. This type of transaction has been permitted in SA law since 2004 and has recently been gaining traction in the market.

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Taurus Capital recently closed with a fundraise of R145.8m to fund cases, which it says is available for “high-value commercial litigation matters” in SA.

Sweidan says the availability of such funds provides a war chest to litigants, which can be used to bolster the quality and experience of the legal team and experts, if required. “It is the only litigation fund in the country that funds a portfolio of matters, as opposed to raising funding to litigate case by case,” he says.

Currently, the fund has four active cases, with two in the process of being admitted.

Sweidan says the reception to their fund was good, proving that demand from people to fund their own cases and those with money to back the legal actions, was high. In future, he says, they hope to raise more capital, operating multiple funds concurrently.

Topics of discussion include: an explanation of the litigation funding business model; challenges faced by people in funding cases; demand by investors and consumers for such a service; how much it takes to push a large case through the court system; and the risk involved in the business model.

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• Business Day Spotlight is a MultimediaLIVE production.