VWM Capital brings you the Insaaf Litigation Fund, our new fund offering Sharia-compliant investments in litigation claims. It is the first Sharia-compliant litigation fund in the UK.
The UK’s first Sharia-compliant litigation fund
We’re proud to announce the launch of the Insaaf Litigation Fund, our new Sharia-compliant offering.
The Insaaf Litigation Fund offers you a certified Sharia-compliant investment in an asset class that is uncorrelated with traditional capital markets and, therefore, relatively insulated from the current market uncertainties.
“We’re excited to have launched what we believe is the first of its kind: a Sharia-compliant litigation fund,” says James Scragg, Director and Portfolio Manager at VWM Capital.
“We’ve spent around 12 months working with our Sharia advisory board, who we’re privileged to have involved, to ensure every step of the process complies with Sharia principles.”
Alongside a network of other market-leading partners, we’ve collaborated with Amanah Advisors to structure our litigation fund so that it’s Sharia compliant. Amanah Advisors are an independent, globally recognised Sharia advisory firm. They oversee compliance, providing guidance to the board and auditing our fund.
Combining technology and social impact
Built on the VWM Capital approach of focusing funding towards a high volume of low-value cases, the Insaaf Litigation Fund offers Sharia-compliant and relatively low-risk investments in litigation claims.
We’re able to fund a high volume of cases thanks to our use of lawtech in our case preselection process, which reduces the administrative burden and helps us shortlist cases accurately. All cases are then assessed by independent legal experts, and only those with the highest chances of successful outcomes are selected for funding.
Our approach facilitates risk diversification and simultaneously allows us to target cases where a greater social impact will be felt.
This is because the claimants in these cases, which include housing disrepair and undisclosed commission claims, generally do not have the means to pay legal costs themselves – especially when up against better financed defendants.
“Moreover, at VWM Capital, we believe access to justice shouldn’t be a luxury, reserved only for those with the deepest pockets. Through litigation funding, we can help level the playing field, and enable poorer claimants with meritorious cases to seek justice,” says James.
“In our first fund, which we launched a year ago, we’ve achieved double-digit net annual returns, thanks to our combination of using lawtech and focusing on a high volume of lower sum cases, and we’re targeting similar returns for the Insaaf Litigation Fund.”
How Sharia-compliant litigation funding works
All litigation funding involves an agreement between two parties: the claimant and the funder. The funder finances the claimant’s case, and the parties enter into an agreement to share any court award or settlement. From a Sharia perspective, it works as an award-sharing arrangement.
Unlike conventional litigation, Sharia compliance requires that the funder has no capital protection through after-the-event (ATE) insurance. In our Sharia-compliant fund, we share the risk with the claimant in each case. If they lose, we lose out too.
Of course, we manage risk where appropriate to maximise the chances of success and of achieving our targeted returns.
“After much work and development by the team at Amanah Advisors, we are delighted to develop this unique Sharia-compliant product, which operates on the foundational principles of Islamic finance where risk and reward are shared between the parties,” says Mufti Faraz Adam, Executive Director and Head of Sharia Advisory at Amanah Advisors.
Learn more about the Insaaf Litigation Fund.
For enquiries about the Insaaf Litigation Fund, please contact the VWM Capital team.