US-based emerging-markets-focused hedge fund Gramercy has issued a $552.5m secured loan to London-headquartered law firm Pogust Goodhead.

This is the largest litigation funding loan to a UK law firm to date.

The loan proceeds help fund class action lawsuits against mining firms BHP and Vale for claims arising from the Mariana dam collapse in Brazil in 2015. Pogust Goodhead is representing over 720,000 claimants in a trial set to start in October 2024 in London. The claims are for damage to claimants’ property and livelihoods.

The loan proceeds also help fund litigation against 14 automobile companies (BMW, Fiat Chrysler, Ford, Honda, Hyundai, Jaguar/Land Rover, Mazda, Mercedes-Benz, Peugeot/Citroen, Renault Nissan, Toyota, Vauxhall, Volkswagen, and Volvo) over the dieselgate scandal on behalf of approximately one million UK customers.

Pogust Goodhead was founded in 2018 and has over 100 lawyers. London-based private credit fund manager Northwall Capital had previously lent £150m to Pogust Goodhead.

Tom Goodhead, CEO at Pogust Goodhead said: “This landmark deal shows that global investors have good faith in the outcome of our cases.”

Robert Koenigsberger, CIO at Gramercy said: “The firm has an exceptional track record and we have been impressed by the team and their approach to complex litigation. Allocating to this transaction is clearly consistent with Gramercy’s mission to positively impact the well-being of our clients, portfolio companies, and their communities. The investment materially aligns with our ESG and impact investing objectives.”

Litigation funding as an asset class is continuing to grow – estimated at $15.8bn in 2022 and projected to grow to $24.3bn by 2028 according to RationalStat.