Judge Rejects Bugsby’s Bid to Fortify Cross-Undertakings in Damages amid Dispute with Litigation Funders

The High Court in England and Wales recently ruled against a company, Bugsby Property, in a dispute with its litigation funders. Bugsby had sought to fortify their cross-undertakings in damages, claiming they wanted to use the contested funds to back litigation themselves. However, Mr. Justice Jacobs dismissed their bid, stating that litigants would be cautious about taking money from Bugsby in light of the case.

Last month, Bugsby’s attempt to use the Supreme Court’s PACCAR ruling to invalidate the litigation funding agreement with Therium Litigation Funding was also rejected by the judge. An injunction was granted to preserve the £27m in proceeds of the case pending arbitration. Bugsby then applied for fortification of the funders’ cross-undertakings, but the judge found the claimed loss to be speculative.

Jacobs J noted that Bugsby had never funded litigation before but expressed interest in entering the market. However, he highlighted that a potential co-funder, Bench Walk Advisers, had not made a firm offer to Bugsby, making it uncertain whether a deal could be concluded. The judge also emphasized the reputational risk for funders and litigants involved with Bugsby, given the ongoing dispute.

Ultimately, the judge rejected Bugsby’s application for fortification, stating that there was no real risk that the funders would not pay due to the serious ramifications it would have. Neil Purslow, chief investment officer of Therium, expressed satisfaction with the court’s decision, emphasizing the caution that claimants should exercise when dealing with Bugsby.