Impact Holdings (UK) PLC Update on Litigation

 
TIDMIHUK 
 
Impact Holdings (UK) plc 
 
                           ("Impact" or "The Group") 
 
             Update on Outstanding Loans and Litigation Recoveries 
 
Impact is pleased to announce that its disbursements funding subsidiary, Impact 
Funding Solutions Limited ("IFSL") has been successful in the Court of Appeal. 
 
IFSL has been pursuing recovery of disbursements funding loans from solicitors 
and their insurers. In one particular instance, IFSL obtained judgment but the 
professional indemnity insurers of the solicitors in question, AIG Europe 
Insurance UK Ltd ("AIG") refused to meet the award. AIG asserted that the sums 
awarded to IFSL were excluded under the terms of professional indemnity 
insurance dictated by the Solicitors Regulation Authority (the "PI Policy"). 
The coverage dispute was heard at first instance before HHJ Waksman QC in the 
Manchester Mercantile Court. The Learned Judge found for AIG when he concluded 
that the sums sought by IFSL were excluded under the PI Policy. IFSL appealed 
and was successful by a unanimous decision of their Lordships Longmore LJ, 
Patton LJ and Gloster LJ. In his leading judgment, Longmore LJ held that the 
loss suffered by IFSL arose from the solicitors' negligence and was precisely 
the type of loss that solicitors' compulsory insurance is designed to cover. 
The decision is reported at [2015] EWCA Civ 31. 
 
This appears to be the first occasion in which the construction of the "trade 
debt" exclusion under a PI Policy in respect of claims by litigation funders 
has been dealt with in the Court of Appeal.  Permission to appeal to the 
Supreme Court was sought by AIG but refused by the Court of Appeal.  AIG is 
entitled to seek permission to appeal directly from the Supreme Court. If 
permission is granted, AIG will need to persuade the Supreme Court that the 
Court of Appeal was wrong in its judgment. 
 
The successful appeal means AIG must now pay to IFSL the sum of GBP986,515 
representing damages and interest. In addition, AIG was ordered to pay GBP175,000 
on account of the costs incurred by IFSL. 
 
Paul Davies, Chief Executive Officer of Impact said "The Board and I are 
delighted with the Court of Appeal decision as this follows hard on the heels 
of litigation IFSL is pursuing. Even if AIG receives permission to appeal, I am 
confident that the Board has the resolve and is fully committed to continuing 
the efforts for recovering loans from those errant law firms that misused the 
disbursements funding provided by IFSL. The solicitors that advised IFSL on the 
disbursements funding arrangements before loans were made are also being 
pursued and will continue to be pursued until IFSL obtains redress." 
 
For further information: 
 
Impact Holdings (UK) plc           Paul Davies, Chief Executive Officer 
 
                                   Tel: [phone] 
 
Zeus Capital Limited               Andrew Jones/Nick Cowles 
 
                                   Tel: [phone] 
 
 
 
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