LCM Walks Away From Long-Running Gladstone Harbour Litigation

Litigation Capital Management (LCM) has terminated its investment in a class action against Queensland’s Gladstone Ports Corporation (GPC), writing off A$30.8 million in capital and initiating a formal strategic review of the business, the London-listed funder said Sept. 15.

The case stemmed from claims by hundreds of commercial fishermen that dredging of Gladstone Harbour between 2011 and 2012 released contaminants that damaged fisheries and livelihoods. Filed more than a decade ago, the action faced a series of procedural hurdles and evidentiary challenges. LCM, which backed the claim on its balance sheet, said the way the litigation was prepared—and weaknesses in expert evidence—ultimately left it without a viable path to success.

As part of the termination, the class action has been settled with a full release of claims and a payment to GPC covering a portion of its costs, subject to court approval scheduled for late October. LCM said the payment will be covered by its after-the-event insurance.

The write-off is significant: the investment was carried at cost on LCM’s books and represented one of its larger Australian exposures. However, the company is pursuing avenues to recover part of its outlay. LCM has commenced a costs assessment process against the solicitors who originally acted for the claimants, alleging overcharging, and is also exploring claims of breach of contract and negligence against the same firm.

The decision follows a string of adverse outcomes for LCM, including a commercial arbitration loss announced in April, which the company is seeking to appeal. A separate UK commercial litigation matter—co-funded alongside its Fund I, with A$20.6 million invested from the balance sheet—is now awaiting judgment.

Alongside the termination, LCM confirmed it has launched a formal strategic review and hired Sydney-based advisory firm Luminis Partners to assist. While no specific options were outlined, the company said it is evaluating both financial and structural alternatives. Full-year results are due Oct. 1, when management is expected to provide more detail on priorities following recent case developments.

“The termination of the Gladstone class action investment was a challenging but necessary decision,” CEO Patrick Moloney said. “This action, alongside recent cost reduction efforts and the strategic review, reflects our proactive approach to navigating recent challenges.”

For funders, the exit highlights both the risks inherent in complex environmental class actions and the importance of balance sheet discipline in an industry facing increased scrutiny from investors and regulators alike.