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Re: IMF - IMF (Australia)

The statement in bold is only partly true because the bulk of the cases that IMF fund do not go to trial. They settle. And they settle because the likelihood of which side of the dispute is going to win is usually fairly clear well before the commencement of the trial. I say this as a litigation lawyer myself, usually on the opposite side of the claims funded by IMF. For a corporate defendant, the prospect of a contested trial and a finding of liability will often compel settlement even where the claim is defensible. Thus, a plaintiff's claim may have only a 40% chance of success but that is often enough to compel a settlement on terms that give IMF a substantial return on its investment. This is because, ultimately, corporate defendants always stand to lose a lot more in a public trial in terms of costs and reputational damage than do individual plaintiffs.

If the risk that you have in mind is lumpy earnings, then I agree that the stock has earnings risk. However, from what I have read of the IMF team, they are very prudent managers of IMF's working capital. Also, the nature of the business is incredibly scaleable and flexible as IMF does not have teams of lawyers and barristers standing around that need to be paid even when there are few claims worthy of funding. They are all outsourced. Thus, IMF can easily scale up to multimillion dollar claims in a way that is perfectly calibrated to the value of the claim.

Personally, I am interested in learning about the state of the US litigation funding market. The US is the most litigious nation in the world and yet I understand that litigation funding in the US not as mature as it is in Australia. I think that IMF's experience will give it a real competitive advantage here.

One last point: on the question of growth, the presence and availability of litigation funding must, in my view, bring forth an increase in litigation since a lot of claims that formerly were viable were not litigated due to lack of funding.

<blockquote data-quote="Nutmeg" data-source="post: 705791" data-attributes="member: 47308">Re: IMF - IMF (Australia)The statement in bold is only partly true because the bulk of the cases that IMF fund do not go to trial.&nbsp; They settle.&nbsp; And they settle because the likelihood of which side of the dispute is going to win is usually fairly clear well before the commencement of the trial.&nbsp; I say this as a litigation lawyer myself, usually on the opposite side of the claims funded by IMF.&nbsp; For a corporate defendant, the prospect of a contested trial and a finding of liability will often compel settlement even where the claim is defensible.&nbsp; Thus, a plaintiff&#039;s claim may have only a 40% chance of success but that is often enough to compel a settlement on terms that give IMF a substantial return on its investment.&nbsp; This is because, ultimately, corporate defendants always stand to lose a lot more in a public trial in terms of costs and reputational damage than do individual plaintiffs.&nbsp; &nbsp; If the risk that you have in mind is lumpy earnings, then I agree that the stock has earnings risk.&nbsp; However, from what I have read of the IMF team, they are very prudent managers of IMF&#039;s working capital.&nbsp; Also, the nature of the business is incredibly scaleable and flexible as IMF does not have teams of lawyers and barristers standing around that need to be paid even when there are few claims worthy of funding.&nbsp; They are all outsourced.&nbsp; Thus, IMF can easily scale up to multimillion dollar claims in a way that is perfectly calibrated to the value of the claim.&nbsp; Personally, I am interested in learning about the state of the US litigation funding market.&nbsp; The US is the most litigious nation in the world and yet I understand that litigation funding in the US not as mature as it is in Australia.&nbsp;&nbsp; I think that IMF&#039;s experience will give it a real competitive advantage here. One last point: on the question of growth, the presence and availability of litigation funding must, in my view, bring forth an increase in litigation since a lot of claims that formerly were viable were not litigated due to lack of funding.</blockquote>

[QUOTE="Nutmeg, post: 705791, member: 47308"] [b]Re: IMF - IMF (Australia)[/b] The statement in bold is only partly true because the bulk of the cases that IMF fund do not go to trial. They settle. And they settle because the likelihood of which side of the dispute is going to win is usually fairly clear well before the commencement of the trial. I say this as a litigation lawyer myself, usually on the opposite side of the claims funded by IMF. For a corporate defendant, the prospect of a contested trial and a finding of liability will often compel settlement even where the claim is defensible. Thus, a plaintiff's claim may have only a 40% chance of success but that is often enough to compel a settlement on terms that give IMF a substantial return on its investment. This is because, ultimately, corporate defendants always stand to lose a lot more in a public trial in terms of costs and reputational damage than do individual plaintiffs. If the risk that you have in mind is lumpy earnings, then I agree that the stock has earnings risk. However, from what I have read of the IMF team, they are very prudent managers of IMF's working capital. Also, the nature of the business is incredibly scaleable and flexible as IMF does not have teams of lawyers and barristers standing around that need to be paid even when there are few claims worthy of funding. They are all outsourced. Thus, IMF can easily scale up to multimillion dollar claims in a way that is perfectly calibrated to the value of the claim. Personally, I am interested in learning about the state of the US litigation funding market. The US is the most litigious nation in the world and yet I understand that litigation funding in the US not as mature as it is in Australia. I think that IMF's experience will give it a real competitive advantage here. One last point: on the question of growth, the presence and availability of litigation funding must, in my view, bring forth an increase in litigation since a lot of claims that formerly were viable were not litigated due to lack of funding. [/QUOTE]

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