Omni Bridgeway (Fund 5) Cayman Invt Limited v Bugsby Property LLC & Anor

Fortification of a cross-undertaking in damages requires the applicant to show a good arguable case that the injunction has caused, or will cause, loss and that the loss can be estimated intelligently. The relevant considerations are interconnected: sufficient risk of loss, causation by the injunction’s preventative or coercive effect, and solid, credible evidence supporting the quantum.

A merely possible commercial opportunity, unsupported by firm commitments or adequate evidence that the proposed transaction could proceed, is speculative and does not satisfy that test. The court may also consider whether the undertaking is likely to be met, including the funder’s available resources, the consequences of contempt, and reputational consequences.

Bugsby Property LLC applied for fortification of cross-undertakings given by Omni Bridgeway and Therium in support of injunctions obtained in related proceedings. Bugsby claimed that the injunctions prevented it from deploying settlement proceeds in litigation funding transactions and sought fortification exceeding £7 million in aggregate.

The funders disputed both the alleged loss and the likelihood that any liability under the undertakings would remain unsatisfied. The central issues were whether Bugsby had a good arguable case that the injunctions caused recoverable loss capable of intelligent estimation, and whether there was a good arguable case that either funder was not good for the money.

1. Application dismissed. Bugsby failed to establish a good arguable case that the injunctions would cause the claimed loss.
2. The court adopted the principles summarised in Energy Venture Partners Ltd v Malabu Oil & Gas Ltd [2014] EWCA Civ 1295 and PJSC National Bank Trust v Mints [2021] EWHC 1089 (Comm). Fortification is discretionary. The applicant must show a good arguable case of sufficient risk of loss, causation by the injunction, and evidence permitting an intelligent estimate of quantum.
3. “Good arguable case” requires materially more than a merely arguable case, although the applicant need not show a greater-than-50% chance of success. The alleged loss must have a solid and credible evidential foundation and must not be speculative.
4. Bugsby had no established participation in litigation funding, no identified third-party litigant that had agreed to contract with it, and only indicative terms from a potential co-funder subject to due diligence, final documentation and internal approvals. The evidence did not establish that the proposed transaction would occur.
5. The evidence also indicated that concerns about the disputed status of the funds, Bugsby’s lack of track record and its disputes with funders could deter both a co-funder and potential litigants even without the injunction. The claimed loss therefore could not be attributed with the required degree of confidence to the injunctions.
6. Although unnecessary to the result, the court would have rejected the argument that the funders were not good for their undertakings. Their evidence showed access to substantial funds. Non-compliance would risk contempt of court, as recognised in Hoffmann-La Roche & Co AG v Secretary of State for Trade and Industry [1975] AC 295, and serious commercial and reputational consequences.
7. Rowe v Ingenious Media Holdings Plc [2020] EWHC 235 (Ch) and [2021] EWCA Civ 29 concerned materially different evidence and circumstances. Nederlandse Financierings-maatschappij Voor Ontwikkelingslanden NV v Societe Bengaz SA [2023] EWHC 1948 (Comm) established no general principle applicable to the present funders.

The judgment refers to an earlier judgment concerning Therium’s application for injunctive relief: [2023] EWHC 2627 (Comm). The present decision was a first-instance determination of Bugsby’s fortification application.