Litigation funder dismisses vice-chairman for misconduct

Litigation funder dismisses vice-chairman for misconduct

Nick Rowles-Davies has been removed from his position for delinquency over expenses

Litigation Capital Management (LCM), the litigation funder has dismissed its executive vice-chairman, Nick Rowles-Davies, "on the grounds of gross misconduct" over "expenses claims."

The chief financial officer Mary Gangemi revealed the allegations on Rowles-Davies in a statement to the London Stock Exchange (LSE).

The statement said that he was being removed with immediate effect from his position on the board of directors of CourtCorrect, an artificial intelligence online disputes resolution start-up. His termination follows the identification of certain expenses claims that have been made in contravention of LCM's Global Expense Guidelines and Policy.

"While the breaches are a significant violation of internal company policies, their quantum is not material to LCM's financial condition and performance," the statement read.

The news has shocked the litigation funding community, as Rowles-Davies has been widely respected in his field. The non-practicing solicitor had joined LCM in 2018 from Chancery Capital, his previous investment vehicle, which he launched in 2017.

Prior to that, he served as managing director of Burford Capital from 2014 to 2016 and co-founded Vannin Capital, which is now part of the Fortress Investment Group.

The funder announced gross profits of A$26.6m, which is up 23 percent from the previous year, in its 2021 annual report, with assets under management growing 34 percent to A$336m.

LCM also recorded a 10 percent increase in applications for funding because of the financing arrangements agreed upon last year with firms including DLA Piper and Norton Rose Fulbright. Rowles-Davies had played a significant role in it.

One of the first deals LCM supported in 2018, following the opening of the London office that Rowles-Davies founded, concluded recently. A Middle-East construction arbitration company generated £9.8m in revenue on investment of £2.8m, a return on capital of 255 percent.

The firm, recently, announced the US$ 200m first close of its second global alternative returns fund. The chief executive officer, Patrick Maloney, who has now relocated to London, excised share options.