nsurance from an A-Rated Insurer.
LItigation Contracts Explained
Litigation Contract Assets (LCA) bridge the gap
between specialist litigation funders and the
capital markets. In the same way a Mortgage
Contract centralises the funding, the insurance, the
liabilities, the valuation and the responsibilities,
the LCA does the same for Litigation funding. The
comparisons of the two funding contracts gives a
good basis for investment.
Mortgages are 100% financed thereby having a 1:1
cover for capital, they are insured through the
property asset, the value of the asset may go up or
down depending on how well it is maintained and
the revenue depends on the people paying the
mortgage. Mortgages are long term funding
contracts often bundled into ‘tranches’ of multiple
mortgages accumulating enormous values for
utilisation and financing by the capital markets.
Litigation Contract Assets are only funded to 25%
of the claim value thereby giving a 4:1 cover of
capital against contract. There is no price
fluctuation, maintenance or risk to this funding
capital as it is 100% insured through an A-Rated
Insurer underwritten by a Llyods Broker. This
Capital Cover insurance includes a 12% interest
rate should the claim fail. These claims are
designed to succeed, with only claims that meet all
of the established claim criteria that succeeds in
courts being able to issue LCAs. Litigation Contract
funding is for 6 to 12 months historically.
Litigation funding returns are considerably, and
historically, higher than mortgage funding returns.
Essentially, when LCAs are compared to Mortgage
Contract funding, they outperform with essentially
no risk to principle.
Energy Claim Litigation Claim Asset Data Sheet
LITDAQ ©Copyright 2025
2Risk Factor Table Mitigation
Principal Loss None. 100% of the invested principal is insured by an A-Rated Insurer. In the unlikely event of a
claim failure, the insurer pays the principal plus a 12% interest.
Claim Failure Mitigated. Claims are subjected to a rigorous vetting process using proprietary AI and
independent expert analysis, ensuring a high probability of success. The investment is backed by
established case law and Supreme Court rulings.
Issuer Default None. The investment is attached to the claim itself, not the issuer's balance sheet. Furthermore,
the principal is 100% insured, providing a layer of protection against any issuer insolvency.
Market Risk None. The value of the claim is established by court-set fixed fees and is not subject to market
fluctuations.
Borrower Set-off None. The legal framework and nature of the claim prevent set-off.
Energy Claim Genre Explained
Energy was sold to businesses in the UK through
brokers who have not disclosed their commissions
which has significantly impacted energy prices to
those companies. Further to the Supreme Court
decision on August 1st
, 2025, any energy broker
who has supplied energy to a UK business without
complete disclosure of their commissions where a
fiduciary relationship is established shall have the
whole contract canceled with over-payment and
interest due back to the business owner.
victim of business practices that do not meet
regulatory transparency.
The Legal Representative will collate all of the
required evidence for the claim, the contracts, the
Letters of Authority, banking information and
communications and then assess the claim to
ensure that it meets the strict litigation criteria.
Any claims that do not meet the criteria are
rejected. An independent expert rating agency
then further assesses and rates the claims to
ensure that they can be successful in court and
meet the insurable standards. At this point an LCA
is issued to finance the claim.
There are somewhere close to 8 million UK
business that are believed to have viable energy
claims against brokers and energy companies.
Historically these companies have 2.4 claims each
totally 0ver 19 million claims. The average value of
the claims is £52,000 giving an estimate of almost
£900 billion in claims. Perhaps 30% - 40% of these
will be processed successfully establishing a
funding demand of close to £240 billion. It is
estimated that the current litigation funding
capacity is below 4% of this amount.
Legal Representative and Claims Management.
The Energy Claims are processed by E-Chambers
Direct, a leading UK Chambers and Claims
Management Company, through their proprietary
AI systems which are fast, have no errors and issue
the claims letters along with detailed pleadings for
the barristers should this be necessary. In most
cases, Energy Claims settle before court as there is
little defense to undisclosed commissions where
the alternative is an expensive court process
through the fixed fee regime set by the courts
which will increase the costs to the defendants
significantly.
The LCA is attached to the claim, not the Legal
Representative. Only one funder is attributed to
each LCA. The assignment rights for the Claim
remain with the LCA funder until paid in full and
closed at settlement including principle, interest
and fees. The LCA has an agreed interest rate paid
against the funded amount. 100% capital cover and
coupon is placed immediately.
Upon funding, the LCA Claim will proceed through
the Claims Process which is directed down the
Court established Fixed Fee Regime in the Fast-
Track, Intermediate and occasionally Multi-Track
channels. This is important as it establishes the
legal fees specific to the claims. This increases the
commercial pressure on the defendants towards
settlement before court proceedings, especially
when there exists case law, Supreme Court
Judgement and clear evidence of undisclosed
commissions leaving no room for a defence. There
is not a firm litigation and negotiation schedule in
place to conclude the litigation.
The Litigation Claim Asset Lifecycle
A Litigation Claim is established when a claimant
contracts with a Legal Representative to recover
undisclosed commissions. In many cases, this only
occurs when a claimant realises they have been the
Reporting
Each LCA has its own data which is supplied to each
funder through their own dashboard covering all of
their funded cases. The status and progress of each
claim is therefore transparent in real time.
Energy Claim Litigation Claim Asset Data Sheet
LITDAQ ©Copyright 2025
3Energy Claim Investment Table Summary
LCA
Price
Market
Interest
Rate
Damages Value
(Average)
Legal Fee
Value
Insured Cover
Ratio
Success
Ratio
Payout
Estimate
£12,500 Market
Price
£52,000 £32,000
100% Plus
12%
Coupon
4:1 >80% 6 - 18 Month
LCA Asset Summary
Transaction Type: Issuer packages Litigation Contracts
with principal insured and revenue confirmed from
Court Fixed Fee regimes, boasting a 99% likelihood of
successful settlement or litigation.
Key Parties:
Issuer: Legal Representative (Solicitors or Barrister
Chambers)
Seller & Servicer: Legal Representative
Arranger: LITDAQ Exchange and Rivermead Auditor
Joint Lead Managers: Legal Representative
Security: A-Rated Insurer
Guarantors: None (100% Insured)
Notes Issued: None
Claim Success Ration: >80%
Cover Ratio: (Claim Asset Value to Funding Committed)
4:1
Class A: GBP single LCA or bundles (or larger on
request), Fixed APR (Variable and Negotiable), Rated A
by Insurance, Green by Litigation (>80% success
forecast), Matures 36 months max, average 6 to 18
months.
Class A pays interest upon settlement of the claim. No
interest is paid if the claim fails.
Security: Investors benefit from security cover:
Capital Cover Insurance
Issuer rights
Reserve and collection accounts
Key Risks:
Issuer Default: None, 100% insured. Investor principal
is insured, relying on court-directed fixed fees per claim.
Subordination: None - all are primary fee-collecting
claims.
Market Risk: None - value established by investment
for claim disbursements costs only, 100% covered by
insurance.
Borrower Set-off: None
Conflicts of Interest: None
STS Compliance: Transaction should meet EU "Simple,
Transparent, Standardised" (STS) standards.
Risk Retention: None to principal. Claim success risk at
court is mitigated by Supreme Court Decisions,
established case law, and a track record of successful
claims through the courts.