Juridica Investments Limited, one of two publicly traded commercial litigation funding companies operating in the United States, doesn’t like to talk about the cases in which it invests. But details of one investment have become public, thanks to a racketeering complaint filed against Juridica in Houston federal district court by S&T Oil Equipment and Machinery Ltd. in February. The suit, which appears headed for arbitration, offers a rare glimpse into the kinds of tensions that can develop between a litigation finance – backed client and the litigation funder. Perhaps not surprisingly, one knotty issue is what information a funder is allowed to see without compromising attorney-client privilege or the independence of lawyers handling the case.
According to S&T’s federal suit, its dispute with Juridica stems from an International Centre for Settlement of Investment Disputes arbitration that the company brought against Romania in 2007. In that action, S&T sought €140 million after Romania ended the privatization of a state-owned chemical plant. King & Spalding, which represented S&T in the matter, took the case on contingency, but threatened to quit after a year unless S&T found a new funding source and agreed to pay $3.5 million in fees and costs. In 2008 Juridica stepped in with a $3 million investment to help pay the bills, S&T says.
