Update on Litigation

Impact Holdings (UK) plc ("Impact" or "The Group") Update on Outstanding Loans and Litigation Recoveries Impact is pleased to announce that its disbursements funding subsidiary, ImpactFunding Solutions Limited ("IFSL") has been successful in the Court of Appeal. IFSL has been pursuing recovery of disbursements funding loans from solicitorsand their insurers. In one particular instance, IFSL obtained judgment but theprofessional indemnity insurers of the solicitors in question, AIG EuropeInsurance UK Ltd ("AIG") refused to meet the award. AIG asserted that the sumsawarded to IFSL were excluded under the terms of professional indemnityinsurance dictated by the Solicitors Regulation Authority (the "PI Policy").The coverage dispute was heard at first instance before HHJ Waksman QC in theManchester Mercantile Court. The Learned Judge found for AIG when he concludedthat the sums sought by IFSL were excluded under the PI Policy. IFSL appealedand was successful by a unanimous decision of their Lordships Longmore LJ,Patton LJ and Gloster LJ. In his leading judgment, Longmore LJ held that theloss suffered by IFSL arose from the solicitors' negligence and was preciselythe type of loss that solicitors' compulsory insurance is designed to cover.The decision is reported at [2015] EWCA Civ 31. This appears to be the first occasion in which the construction of the "tradedebt" exclusion under a PI Policy in respect of claims by litigation fundershas been dealt with in the Court of Appeal. Permission to appeal to theSupreme Court was sought by AIG but refused by the Court of Appeal. AIG isentitled to seek permission to appeal directly from the Supreme Court. Ifpermission is granted, AIG will need to persuade the Supreme Court that theCourt of Appeal was wrong in its judgment. The successful appeal means AIG must now pay to IFSL the sum of £986,515representing damages and interest. In addition, AIG was ordered to pay £175,000on account of the costs incurred by IFSL. Paul Davies, Chief Executive Officer of Impact said "The Board and I aredelighted with the Court of Appeal decision as this follows hard on the heelsof litigation IFSL is pursuing. Even if AIG receives permission to appeal, I amconfident that the Board has the resolve and is fully committed to continuingthe efforts for recovering loans from those errant law firms that misused thedisbursements funding provided by IFSL. The solicitors that advised IFSL on thedisbursements funding arrangements before loans were made are also beingpursued and will continue to be pursued until IFSL obtains redress." For further information: Impact Holdings (UK) plc Paul Davies, Chief Executive Officer Tel: 01928 793550 Zeus Capital Limited Andrew Jones/Nick Cowles

Tel: 0161 831 1512