Pioneering Justice Finance: An Interview with Francesco Consoli, CEO of Libra Claims

Francesco Consoli, CEO of Libra Claims, is at the forefront of a breakthrough in litigation finance. Under his leadership, Libra Claims has launched Italy’s first securitization of third-party litigation funding, issuing €30 million in asset-backed securities (ABS), fully subscribed by investment funds, and assembling a claims portfolio exceeding €500 million. This innovative structure, executed in collaboration with Centotrenta Servicing, Legance – Avvocati Associati, and Delex Law Firm, is reshaping how access to justice is financed and organized across Europe. We sat down with Francesco to explore what this means for the future of litigation funding, capital markets, and collective redress.

1. Francesco, congratulations on closing such a groundbreaking deal. Can you walk us through the motivation behind structuring the first litigation funding securitization in Italy using ABS? What problem were you aiming to solve?

Thank you Dina. Litigation finance is growing enormously in Italy and the volumes and values ​​of transactions are becoming truly significant. We analyzed various options, e.g. mutual funds investing in alternative assets; factoring banks; financial companies, special licensed financial intermediaries etc. In the end, we arrived at the securitization of claims. This structure offers multiple advantages, including: 1) tax transparency; 2) cost efficiency; 3) operational transparency; and 4) great flexibility in structuring the securities that incorporate the underlying claims.

And it is obviously fully authorized and regulated by Bank of Italy.

2. You’ve assembled a portfolio of claims exceeding €500 million in value. What types of claims are included in this portfolio, and how were they aggregated and assessed for securitization? Are there particular types of claims—consumer rights, environmental damages, mass torts—that you believe are especially well-suited to this securitization framework?

This securitization transaction concerns exclusively a follow-on antitrust case and is backed by approximately 1,000 companies that have purchased a total of 5 billion euros of products in a market affected by a sanctioned cartel.

The claims sourcing and selection process was carried out by our commercial and back-office structure, in accordance with the indications given by the investors, validated by the law firm that will handle the litigation (Delex Law Firm) and detailed in the securitization documentation.

Securitization, in general, can be an excellent tool for collecting, managing and litigating any type of contentious rights.

3. The €30 million in ABS was fully subscribed by investment funds. What was the investor appetite like during the raise? Were there any specific investor concerns or expectations you had to navigate?

This operation was promoted by a litigation fund with which we have excellent relations, and which has supported us since the beginning of our activity. A second fund was added to it, with an investment distribution of 20 and 10 million euros respectively. We studied and evaluated this path together in the past months. The case had already been financed by the first fund and with this operation the investment was increased to 30 million euros.

The main concerns were related to the more technical parts of the securitization but thanks to the support of the law firm Legance and the Master Servicer (130 Servicing), we managed to create a model fully approved by Bank of Italy and that we are already replicating in other operations, with additional investors.

4. How are returns to investors structured in this model?

The beauty of this structure is that it offers, as I said, great transparency and security. The waterfall is precisely regulated in the securitization documentation. All claims become the property of the securitization vehicle which, in turn, is controlled by the investors or note holders. All collections are received by the SPV and the assets are fully segregated. Therefore, once the claims are monetized, distribution occurs automatically and under the indirect control of the Bank of Italy. The details on the economic and financial model of the operation are confidential.

I think a point of particular interest, however, is the alignment of interests that this structure allows us to create, with a sharing of the results of monetization exceeding the agreed return payable to the investor.

5. Did the securitization help lower the cost of capital compared to traditional litigation funding routes? How does it compare in terms of liquidity and scalability?

The cost of capital does not depend on the structure of the operation but on the specific negotiation with the investor. Certainly, this type of operation offers advantages that can lead to a lower cost of capital raising — e.g., 1) asset segregation and elimination of drop-off or non-collection risks; 2) tax transparency; 3) cross-collaterization; and 4) ease in selling the operation to third parties on the secondary market or allowing the entry of other investors at any stage of the operation, since the ABS is easily circulated and also listable.

6. You mentioned that you already have six more transactions in the pipeline. Can you give us a preview of those deals—what’s different about them, and how will they evolve your model?

The model used is already being replicated on various operations. First, in the coming weeks we will complete two more operations with the issuance of notes already fully subscribed.

The first is to finance with around 100 million euro a portfolio of 8 very interesting and valuable mass tort cases, aiming at a claim value of 1.2 billion euro, for which we are raising capital now.

The second concerns another substantial follow-on antitrust case, where the investor is a third litigation fund that has already fully underwritten the note.

We also have further operations in pipeline, including significantly a portfolio of approximately 100 individual corporate cases for 570 million euro of claim value.

7. Litigation funding across Europe is not yet regulated, as you’ve noted. What role do you think Libra Claims and this model can play in shaping a more structured, regulated market?

Correct. The issue concerns all of Europe. My idea is that the litigation finance sector is destined to be regulated exactly like the financial sector and that this will only bring benefits for all the parties involved. As far as we are concerned, as mentioned, we are already moving as if the sector were regulated.

8. What are your ambitions for Libra Claims over the next 3–5 years? Do you envision expanding this model beyond Italy to other European jurisdictions or globally?

Now I am exclusively focused on the development of the Italian market. Italy is one of the largest European markets with France and Germany and the growth opportunities are enormous.

Actually, Libra Claims is only one of the registered trademarks that we will use in our new campaigns, together with other brands dedicated to specific cases or business models (e.g. Prontodanno.it for personal injuries).

I have four main objectives: 1) to continue to build the claims aggregation and funding business; 2) to continue investing in technology in order to increase our efficiency; 3) to continue to take advantage of structures that provide more downside protection and support to our investors; and 4) to expand the audience of potential investors.

9. If you could change one regulatory or policy aspect in the litigation funding or securitization space in Europe, what would it be—and why?

I believe that the market should be regulated, without introducing mechanisms that are too rigid or onerous. It would be wonderful to be able to democratize access to this asset class (splendidly uncorrelated and with interesting returns) by developing financial products compatible with a broader distribution to investors.