Valuing a funded claim for fair reporting

A listed litigation funder engaged Osborne Partners to value one of its largest claims for accounting purposes. This was no ordinary asset: it was not traded, there were no market benchmarks and its value depended on the outcome of a long and uncertain legal process. Arriving at a fair value required more than calculation - it demanded a rigorous framework capable of standing up to scrutiny from both senior management and external auditors.

Expert:

Chris Osborne
Dora Grunwald
Charles Larminie

Investigate

Our work began with a deep understanding of the claim itself. The case concerned an expropriation, with damages linked to contractual rights and shareholdings. We analysed the company’s history, the legal theory underpinning the claimed losses and the range of procedural paths the litigation might follow, including successive appeals.

Timing was critical: each procedural stage carried the potential to add years to the process, affecting the present value of any award. To ground our assumptions, we analysed past judgments, appeal data and judicial patterns to develop a realistic view of the litigation’s likely trajectory.

Evaluate

Building on that foundation, we constructed a probability tree to map the case’s potential outcomes. At each stage – trial, appeal, Supreme Court review – we applied probability weightings informed by the evidence and expert judgment.

We also tested four different methods for quantifying damages, and modelled the sensitivity of results to different interest rate assumptions. These elements were brought together in a Monte Carlo simulation, generating a realistic distribution of potential outcomes and a fair value estimate the client could rely on.

Communicate

The analysis was not left in a black-box model. The engagement was led end-to-end by two senior partners – Chris Osborne and Dora Grunwald – ensuring a high level of partner involvement throughout. We provided regular weekly updates and delivered a final presentation to the client’s senior leadership team, clearly setting out the valuation and the reasoning behind it. The findings provided a clear valuation, backed by transparent reasoning and data strong enough to stand up to external scrutiny.

The result was a fair value assessment that met the client’s accounting requirements and was accepted in full by their auditors. Delivered in the midst of the COVID-19 pandemic, the project demonstrated our ability to navigate complexity, uncertainty and large volumes of data – and to turn them into clear, defensible insights that decision-makers can trust.

Managing Director

Our Managing Director, Chris, brings decades of experience leading expert analysis in high-value disputes and regulatory matters worldwide.

Partner

Dora has extensive arbitration and regulatory expertise, including testifying in high-profile investor-state disputes in the energy sector. She is recognised as a leader in arbitration expert witness by Lexology Index and GAR.

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