WebGap’s Clayton Timcke sat down with his newest client Taurus Capital and its founders Simon Kuper and Gary Sweidan to ask a few questions about Taurus Capital, its services, and litigation funding in South Africa.
Why did you launch Taurus Capital, and what problem does it solve?
Gary: Access to justice. Litigation is a luxury and we started Taurus to solve the problem of cost and risk in litigation. It is too expensive and often unaffordable for most litigants.
Simon: The solution to this is through non-recourse litigation finance. We fund the litigation as a third party investor on risk. If the claim is successful we share in a percentage of the proceeds, and if the claim is unsuccessful then we carry the cost burden with no recourse against the litigant for these costs.
When you say the claim is successful, does this mean the litigant obtains a judgement?
Gary: Yes, it means a favorable result either through a successful judgement / arbitration award, or a settlement.
What does “third party” funding mean?
Simon: The reference to “third party” means that we do not take over the case or provide legal services. We are simply an outside “third party” to the relationship between the legal team and the client providing capital to fund the litigation. We are essentially investors.
Gary: The aim is for our resources to empower the legal team, and not for us to direct or take over the litigation.
What does the funding typically pay for?
Simon: This funding includes all payment for all expenses in litigation made up of attorney’s fees, advocates fees, and experts fees.
How much does Taurus take following a successful result?
Gary: The success related payment payable to the funder is different in every matter and will depend on the risk involved, and the amount and percentage of fees funded. Typically, the success based payment will be payment of anywhere between 15%-49%.
Aside from the pure financial benefit to a matter what other advantages does Taurus bring to a litigant?
Simon: The investment allows the litigation to be pursued with vigor. This dramatically increases the prospects of a favorable result of settling or obtaining a judgement. This is coupled with Taurus’ expertise which can be drawn on as a third party providing experienced intellectual capital from our legal risk and investment committees, if required.
Gary: It also frees up working capital and cash flow in the client’s business. Legal fees are a grudge expense and a drain on money that could be better used elsewhere in a litigant’s business. The only reason that many commercial claims are not prosecuted is because of working capital constraints.
What benefit is there to attorneys?
Simon: We provide attorneys with more work and cash flow. We allow them to proceed with matters that were stalled due to funding concerns and also pay their bills on time.
Another important benefit is that it allows a litigant to afford a particular firm. A client may have funds to fund litigation but may view certain firms of attorneys as too expensive despite their ability to bring significant value to a matter. Taurus solves this by partially funding the matter together with the client in order for them to afford a particular firm and therefore increase the matter’s prospects and efficiency.
How does Taurus analyse a matter?
Simon: We have several threshold criteria that are analysed in the due diligence that takes place in a matter. These criteria are analysed by our legal risk and investment committees.
Gary: We look at investment factors such as time, prospects of success, value vs costs as well as legal complexity.
When can Taurus be approached in a matter?
Gary: The claim can be funded at any stage, provided there is a high degree of certainty both with merits and recoverability. We even specialize in appeal funding.
How did you two meet and start the business?
Simon: I worked on the business for 14 months before we launched. After establishing the broad business model and process in 2015, I was chatting to Gary getting his advice in general and how he would approach launching the business.
Gary: Simon and I have known each other for a few years so the relationship was already there. I really liked the business and the solution it could provide the market. I have been involved in several high value commercial litigation matters and the solution provided by Taurus makes perfect sense.