Allianz launches third-party litigation business

by Gill Montia

Story link: Allianz launches third-party litigation business

Allianz is launching a new UK business in November, aimed at providing assistance for small businesses involved in legal disputes.

The insurer will be the first mainstream provider to join the UK market for third-party litigation.

This market has traditionally been dominated by specialist firms that offer to pay legal fees, in return for a share of any award made by the courts.

In the UK, the model has been unpopular within the legal profession because of concerns over whether third parties that have not been harmed should be allowed to profit from disputes centred on other people or businesses.

According to Christian Stuerwald, who will head the Allianz business, “Going to court in the UK is prohibitively expensive, especially for small and medium-sized businesses who are often intimidated into backing down when they have a genuine claim against a larger company. We will help address this balance.”

Allianz is likely to take around 30% of any winnings from a successful case but has declined to put a figure on the sum that will be available for such disputes in the UK.

The group has already made investments in UK court cases from its German-based operations and has focused on small and medium-sized domestic disputes so far.

The news is likely to create a surge of interest in third-party funding for legal cases in the UK.

Recent developments would suggest that the practice is acceptable under UK law, as long as the investors do not try and influence the outcome of the case.