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Case Due Diligence

Ruth Stackpool-Moore
Investment Manager at Omni Bridgeway

Learning outcomes

  • How funders conduct due diligence on cases before sending indicative terms to lawyers
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Executive Bio

Ruth Stackpool-Moore

Investment Manager at Omni Bridgeway

Ruth is a cross-border international dispute resolution lawyer, qualified in Australia and the UK. She has 12 years’ experience in private practice at leading global law firms; in global dispute finance and at one of the world’s leading international arbitration centres. She has represented multinational organisations in, acted as tribunal secretary for and reviewed from a commercial and legal standpoint complex cross-border matters throughout Asia Pacific, Europe, USA and the Middle East in a variety of sectors including defence, telecommunications, construction, media, pharmaceuticals and natural resources. One of the first to set up and manage local operations for a global dispute funder in Asia, Ruth has been commercially assessing dispute prospects and funding cases in civil and common law jurisdictions in Asia, and globally, since 2015. She has also worked to develop regional political and legislative frameworks to allow third party funding in key Asian jurisdictions. Ruth is a member of the Hong Kong International Arbitration Centre Task Force on Third Party Funding. Before joining Omni Bridgeway, Ruth was Managing Director for an exclusive broker to a global litigation funder in the Asia Pacific region. She joined the dispute finance market from the Hong Kong International Arbitration Centre where, as Managing Counsel, she led the arbitration team for several years and, in 2014, managed the Centre as Acting Secretary-General. Read more

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Interview Transcript

Going back to my case, I bring it to you; how do you begin to carry out due diligence on the case?

This is where our expertise really comes to the fore. This is the way we do it, because we have our own expertise and all of our investment managers are former litigators or dispute resolution professionals. Essentially, the first step is that we ask for a certain number of initial documents so that we can do a preliminary due diligence. We need to have an understanding of those three criteria that I outlined earlier. Firstly, we need to have an understanding of the merits of the case. That means we are looking at both the basis of the claim but also defences that might be raised against it. We are looking at that on an objective basis, not on a this is our best-case scenario basis.

Then, obviously, we need to be able to take a view on the economics. There needs to be some reasonable way to make an assessment of the value of the claim. In some cases, that is quite straightforward and there is no issue. For example, for a breach of contract or something like that, it may be quite clear what the value might be. In other circumstances, it might be the case that some expert work needs to be done, at least of a preliminary nature, to really get an idea of what the claim is worth. Then we would need an estimate from the law firm as to the budget that is going to be required.

Once we’ve got those three pieces of information, we will do our own intelligence gathering, in relation to the defendant or the respondent, to get an idea of their financial position and whether recovery will be possible. If all of those things stack up, then we like to move really quickly to offering indicative commercial terms. For us, there is no point wasting our time doing full due diligence into a case if we can’t agree the basic commercials. We offer the terms at an early stage; it will often only take a couple of weeks to get to that point.

Once we do have those commercial terms agreed then we will do our full due diligence process. Again, most of that is usually done in-house, with us. If we feel the need to, we might, at our own cost, get a second opinion on some of the legal arguments or we might need to do further research into the asset position of the defendant and think about the recovery strategy, at that stage. That is always key in our assessment process. We are still looking for comfort on those three criteria and, as long as our further due diligence means everything still stacks up then we take the case to the investment committee. It is my role, as an investment manager, to present the case to the investment committee and explain why it is a good investment. If they approve it, with the approved budget, we then commence funding the case and start paying the fees, as the case progresses.

How important is speed in getting back those first indicative terms?

It really depends on the case and it depends on the jurisdiction. Quite often, we’re in a competitive process. Obviously, if you drag your feet in terms of that initial review and providing terms, then you’re already at a disadvantage. Equally, the pricing of the funding is very important in the decision making of the client. You need to make sure you have done enough work to be able to properly reflect the risk in the pricing you can offer. It’s a balance. Obviously, too much delay is a bad thing; rushing into things is also not helpful.

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