BGP Litigation managing director Alexey Nechaev speaks with Company magazine about litigation funding

""For a certain type of private investor and a person with capital who is involved in the world of law in some way, litigation funding may be an interesting investment opportunity", says Alexey Nechaev, managing director at BGP Litigation. In his view, the decision to make litigation funding services accessible is highly promising".

Expanding on those comments, Alexey Nechaev says it is primarily in the UK and the US that litigation funding is prevalent as a method of investment. The first major cases to be funded date to the 1950s and 60s, and mainly involved corporate bankruptcies. Even earlier references can be found – to 18th century legislation – but at that point in time litigation funding was prohibited (for example, in the UK it became legal only in 1967).
Essentially, litigation funding became a global market at the end of the 1990s, says Alexey Nechaev. It is a vast and multifaceted market whose players include private investors, lawyers, law firms and specialized hedge funds. That said, litigation funding is a highly professional market that is inaccessible to the wider public. 
Alexey Nechaev believes the decision to make litigation funding services publicly accessible in Russia is promising, given the scale of the market. The initiative has realistic chances of becoming the first fully fledged platform for attracting broad external financing of legal cases. After all, specialists in this area who work with distressed assets are mainly interested in big-ticket litigation, which is not accessible to private clients on the market. 
Opening up litigation funding to a wider market could also stimulate demand for specialized legal advisors, believes the managing director of BGP Litigation, because the effectiveness of investments in litigation or arbitration cases depends directly on the outcome of the disputes and, accordingly, mastery of the available legal instruments on the part of the litigation funder.

At present the Russian market is underdeveloped, says Alexey Nechaev, but it is only a matter of time. Looking at the development of such markets in the US, the UK and Germany, it seems likely the Russian market will evolve along similar lines: initially it will be driven by narrow-profile specialists (as has been the case now for a few years), but eventually it will include a wider range of experts, who nevertheless have a solid understanding of the aims of litigation funding and are close to that area in terms of their professional profile, says the expert.

The full article (in Russian) is available here: "Суд да дело".