Reed Smith advises Aristata Capital on formation of Soros-backed impact litigation fund

Sustainability-focused fund will help claimants who don’t have the resources to pursue claims themselves
George Soros, Founder and Chairman of the Open Society Foundation gives a speech during Economic Forum in Brussels, Belgium on June 1, 2017

George Soros Alexandros Michailidis; Shutterstock

Reed Smith has advised London-based Aristata Capital on the first closing of its debut impact litigation fund that is designed to improve access to justice and finance claims across a range of sustainability issues.

The Aristata Impact Litigation Fund secured almost £40m of investor commitments, including from Capricorn Investment Group’s Sustainable Investors Fund and the Soros Economic Development Fund. The litigation fund intends to support claimants who would otherwise not have the resources to pursue claims, focusing on areas including human rights, environmental protection, climate change, equality and indigenous rights, among others.

Reed Smith advised Aristata on the establishment and structuring of the fund, as well as support with investor negotiations and tax and regulatory matters related to the fundraising. Offshore firm Mourant also worked on the transaction.

Reed Smith’s team was led by private funds partner Shervin Shameli alongside financial services partner Tim Dolan and tax partner Caspar Fox in London, business and finance partner Thao Ngo in San Francisco, tax partner Ronald Scharnberg in Houston, corporate partner Allison Sizemore in Pittsburgh and associate Kat Dansie and trainee Sam Hill.

The Mourant team was led by Alistair Horn in Jersey.

The final closing of the fund is expected in the first half of next year.

Jack Naylor, chief investment officer at Aristata, said: “The advice which the Aristata team received from Reed Smith and Mourant was first class, pragmatic and commercial. Having worked with a large number of law firms across more than 30 jurisdictions, this was teamwork at its most effective and crucial to enabling the Aristata fund to pursue its differentiating strategy.”

Read The Glogal Legal Post ESG Timeline

Research published last month by Brussels-based litigation funder Deminor said Europe will account for almost 16% of the global litigation funding market by 2025, equivalent to around $18bn. The report said the increase in disputes would centre around non-compliance with environmental, social and governance (ESG) standards, human rights and general consumer rights.

Also in July, ESG-focused investment firm North Wall Capital said it would provide an additional £100m for PGMBM to finance mass litigations of ESG breaches by large corporations, such as its £5bn suit against Australian mining giant BHP related to the 2015 Mariana dam disaster in Brazil, which is due to be heard in a UK court following a judgment by the UK Court of Appeal.

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