One of LCM’s costly investments into failed cases includes a class action against Gladstone Port’s operator. LCM considered suing the solicitors who ran the case in a bid to recover LCM’s losses. Image Source: Gladstone Port Media Releases

The company reportedly lost seven of its last eight cases and posted a loss of about $115 million in its most recent financial year, and it has now announced what it calls an “orderly runoff” of its business. Its own insurance cover proved insufficient to absorb the losses, which came before the decision to wind down.

In a statement to investors, LCM said the damage was a consequence of how the funder concentrated its resources, with a large amount of invested capital committed to a small number of cases that ultimately failed.

Among the most costly was a class action brought on behalf of Queensland electricity customers against two state owned generators, which the Federal Court dismissed, leaving LCM responsible for about $9 million in uninsured adverse costs.

Another was a commercial claim before the High Court in London, in which LCM had invested about $21 million drawn from its own balance sheet and from a fund it manages. LCM had also written off about $22 million on a class action brought by fishermen over a toxic dredge spill at Gladstone Ports, an investment it chose to abandon in 2025.

The strain now shows on the balance sheet. LCM ended June 2026 with net liabilities of about $37 million, compared with net assets of about $80 million a year earlier, and its accounts carry a warning of material uncertainty over its ability to continue as a going concern. LCM has pledged to fund its remaining cases and meet its debt obligations, but there are doubts about whether it can do both. As of June 2026 it had 37 ongoing cases with nearly $84.6 million already invested, along with commitments to invest a further $71 million.

“LCM has pledged to fund its remaining cases and meet its debt obligations, but there are doubts about whether it can do both.”

A familiar pattern

This outcome follows a path already taken by other funders that put large sums into a small number of speculative cases in pursuit of high returns. Courts around the world often treat such claims with skepticism, and when the cases fail, the funders underwriting them can go under.

Therium Capital Management, now a former funder, is a clear example. It backed prominent cases such as the UK subpostmasters case, where a victory left each subpostmaster with an average of only £20,000 after Therium took its share, and even then Therium reportedly barely broke even.

Therium went on to make more ambitious and controversial bets, including the Sulu arbitration, in which it lost at least $20 million of the money it is known to have invested. The wider cost to justice and society is harder to measure, since the case passed through Spanish, Dutch, Luxembourgian and French courts before being thrown out. The loss is widely speculated to have driven Therium's decision in 2025 to cut its workforce and rebrand as a litigation funding advisory business, with management of its cases handed to Fortress Investment.

“A victory left each subpostmaster with an average of only £20,000 after Therium took its share, and even then Therium reportedly barely broke even.”

Burford Capital, considered the largest specialized funder in the industry, has also backed politically charged, high risk cases. Its flagship claim against Argentina over the 2012 YPF nationalisation collapsed in March 2026 when a US appeals court overturned a $16.1 billion judgment, a reversal that halved its share price, forced a $2.4 billion write down and left it with a $1.6 billion loss for the first half of the year.

The legacy of funders like Therium extends well beyond their own financial losses and closures. The Sulu arbitration has left a widening rift between the Philippines and Malaysia, as the Sulu House of Kiram, whose members brought the arbitration with Therium's backing, continue to press their claim to Sabah state publicly. The dispute is acquiring a growing political dimension ahead of the 2028 Philippine presidential elections, riding on a level of publicity made possible by a former litigation funder’s backing.

REFERENCES

KnowSulu. (2026, May 27). From Post Office litigation to Sulu arbitration: Rethinking legal finality. https://know-sulu.ph

Litigation Capital Management shares crash to new low after High Court defeat. (2025, October 1). The AIC. https://www.theaic.co.uk

Lyall, I. (2025, February 21). Litigation Capital Management shares drop 14% after Australian class action loss. Proactive Investors. https://www.proactiveinvestors.com

Rose, N. (2026, October 5). Listed litigation funder goes into run-off after string of losses. Legal Futures. https://www.legalfutures.co.uk

Ward, C. (2025, October 1). Litigation Capital Management shares tumble amid swing to loss. MarketScreener. https://www.marketscreener.com

White, J. (2025, December 24). Litigation Capital facing AUD 12.9m payment after unsuccessful class action. Sharecast. https://www.sharecast.com