LCM writes off £15m class action investment, launches strategic review

(Sharecast News) - Dispute financing firm Litigation Capital Management has terminated its investment in a long-running class action against Gladstone Ports Corporation, resulting in a �15m write-off and triggering a formal strategic review of its operations.

Litigation Capital said on Monday that the case, brought on behalf of commercial fishermen over alleged contamination of Gladstone harbour, was settled with a full release of claims and a partial cost payment to the defendant, covered by insurance.

The AIM-listed group stated the decision followed a portfolio review focused on balance sheet discipline and capital efficiency, with the case ultimately deemed unsupportable due to weaknesses in preparation and expert evidence. LCM will now pursue potential recovery of invested capital via a costs assessment and a separate claim against the original solicitors for breach of contract and negligence.

LCM also confirmed that a strategic review was now underway, supported by advisory firm Luminis Partners, as it evaluates future options following recent adverse case outcomes.

Separately, LCM noted that it was still awaiting judgment on a UK commercial litigation investment, co-funded with Fund I, into which it invested �9.9m, with a decision expected within three weeks.

Chief executive Patrick Moloney said: "The termination of the Gladstone class action investment was a challenging but necessary decision, as ultimately the way in which the claim was prepared and aspects of the expert evidence were insufficient to support the case theory. This action, alongside recent cost reduction efforts that we have taken and the formal strategic review, reflects our proactive approach to navigating recent challenges."

As of 0915 BST, LCM shares had sunk 17.56% to 32.15p.

Reporting by Iain Gilbert at Sharecast.com