Kairos Litigation Limited

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$50,000,000
Funding Target
506(c)
Offering Type
Litigation Finance
Industry
Bond
Asset Type

Highlights


Kairos Digital Loan Notes (KDLN) (Ticker: KAI18-1) are notes proposed to be issued in a private placement, providing exposure to a portfolio of UK motor finance litigation receivables linked to Personal Contract Purchase (PCP) agreements, subject to the definitive offering documents and applicable investor eligibility requirements. The first tranche is focused exclusively on PCP-related litigation receivables, a segment shaped by the UK Financial Conduct Authority’s motor finance consumer redress framework.

THE PROBLEM 

  • Law firms face a structural funding gap Traditional lenders avoid litigation receivables as mainstream lenders are often defendants in these actions. 
  • Yet law firms still need upfront capital for case acquisition, legal disbursements and ATE insurance. 
  • Claims volume is large and recurring PCP-related litigation alone represents a high-volume claims pipeline, creating recurring financing demand. 

THE OPPORTUNITY 

Litigation finance addresses this gap by providing short-duration working capital to law firms advancing qualifying claims. 
  • Short-duration working capital to law firms 
  • Claim-level deployment with granular, diversified exposure 
  • Returns generated from contractual spreads 

£9.1bn* Estimated UK PCP redress liability 
12.1m+* Eligible PCP claims in the UK 


*Source: FCA Policy Statement PS26/3, 30 March 2026.


Overview


Kairos Litigation Limited (KLL) is a limited-purpose special purpose vehicle incorporated under English law and the issuer of the Kairos Digital Loan Notes. The underlying programme deploys capital into a diversified portfolio of insured UK litigation receivables originated and serviced within the Horizon Group, a segment where insured legal claims often require short-term working capital outside traditional bank lending.

Individual exposures are generally capped at approximately £140 per claim, enabling high portfolio granularity.

Before any claim is included in the programme, it undergoes a structured validation process:

  1. Cases are pre-screened by Claims Management Companies before entering the programme to remove clearly ineligible or weak claims. Only cases meeting the basic eligibility criteria proceed to solicitor review.
  2. The originating law firm interviews the client, assesses the validity and strength of the legal case and secures documentary evidence before accepting an instruction to act on behalf of a client.
  3. The insurer underwrites the claim and issues ATE (After the Event) coverage subject to policy terms.
  4. An independent Part 35 expert provides a professional valuation.
  5. Kairos performs its own eligibility review prior to programme acceptance.


The structure includes claim-level ATE insurance and a capital coverage bond component, each subject to the applicable contractual terms, conditions, exclusions, and claims procedures. In summary, KLL deploys capital through a defined underwriting and programme framework involving claims that have undergone ATE insurer underwriting and independent review, subject to applicable policy terms and programme criteria.
All loans to law firms are full recourse loans.

Issuer Structure

Kairos Litigation Limited is a limited-purpose SPV. Its activities are restricted to issuing the Notes and performing the transaction documents, including acquiring/enforcing litigation receivables and granting permitted security. The structure includes separateness covenants and independent governance controls intended to support bankruptcy-remote administration (subject to governing documents and applicable law).

Key terms *
Issuer - Kairos Litigation Limited
Programme manager - Horizon Legal Limited ("Horizon Group")
Instrument - Kairos Digital Loan Notes
Ticker - KAI18-1
Debt seniority - Senior
First tranche size - USD 50,000,000
Minimum subscription - USD 100,000 (increments of USD 1,000)
Interest - Fixed Rate Coupon: 15.00% p.a.
Payments - Monthly
Maturity - 18 months
Credit enhancement - Capital Coverage Bond & After-the-Event (ATE) Insurance by Talisman Surety & Fidelity Company, Inc.
Security trustee - Bureau Fiduciaire Legal Ltd
Digital rating - Particula: B+ (View rating report)
Tokenization agent - T-RIZE
Digital Infrastructure - Canton Network
Data oracle - Chainlink
Distribution partners - Texture Capital Inc. and Black Manta Capital Partners
Governing law - England & Wales

*For professional or institutional audiences only. Informational use. Access may be restricted in certain jurisdictions.

Kairos Digital Loan Notes
Instrument Structure
The Digital Loan Notes are a private placement senior, secured, fixed-rate debt instrument issued by Kairos Litigation Limited for professional and institutional audiences under a controlled offering framework.
The programme provides exposure to a diversified portfolio of insured UK litigation receivables, supported by underwriting controls and structural protections intended to reduce concentration and operational uncertainty.
The Notes are tokenized on Canton Network to support controlled issuance, permissioned transfers, and standardized recordkeeping for Note ownership and Note lifecycle events. Tokenization applies to the Notes only; the underlying receivables are managed under the programme’s underwriting, servicing, and insurance framework.

Key Economics Terms
  • Interest accrues daily at 15% per annum, simple, non-compounding.
  • Interest is payable monthly in arrears in the subscription currency.
  • Maturity: 18 months from Effective Date.


Key Team Members

Ann-Marie Bell
Ann-Marie Bell
CEO
Ann-Marie Bell is Director of Horizon Legal Limited and CEO of Kairos Litigation Limited, with 25+ years of experience across UK legal services and regulated financial services. A former solicitor, she brings leadership experience across litigation, car finance, payroll lending and ATE lending. She oversees programme governance, operational performance and underwriting standards across the business.
Peter Legge
Peter Legge
Director
Peter Legge leads inward investment and business development and supports programme operations. He brings 15 years of experience in regulated financial services, including 12 years as an Independent Financial Adviser (IFA) arranging private client portfolios. He has experience building and scaling advisory platform structures for large client bases, and at Horizon he focuses on institutional engagement, capital formation support and operational alignment for the litigation receivables programme.

Market Commentary

UK Motor Finance Consumer Redress Scheme (30 March 2026)


1. Period in Scope
  •  Covers motor finance agreements entered into between:
     6 April 2007 – 1 November 2024 
  •  Includes cars, vans, motorbikes, and similar consumer vehicle finance. 
2. What Happened (Summary of Mis-Selling)
The FCA found systemic misconduct across the motor finance market, primarily involving non-disclosure of commissions and conflicts of interest:

Core issues:
  • Undisclosed commissions: Dealers/brokers received commission from lenders without informing customers. 
  • Inflated interest rates (DCAs): Under Discretionary Commission Arrangements, dealers could increase interest rates to earn higher commissions. 
  • Restricted lender access (“contractual ties”): Customers were misled into believing brokers searched the market when they were tied to specific lenders. 
  • Excessive commission structures: In some cases, commissions represented a significant portion of the cost of credit. 
Consumer impact:
  •  Customers paid more than necessary for finance and were denied the ability to shop around effectively. 
Regulatory and legal backdrop:
  •  FCA banned discretionary commission models in January 2021. 
  •  Subsequent investigations and court rulings confirmed widespread failures to disclose material information. 
3. FCA Response (PS26/3)
  •  Introduction of an industry-wide redress scheme (mandatory for firms). 
  •  Designed to: 
    •  Deliver consistent and efficient compensation
    •  Avoid reliance on individual complaints or litigation 
    •  Be free for consumers to use 
  •  Firms must: 
    •  Identify affected customers 
    •  Assess harm 
    •  Offer compensation within defined timelines 
4. Estimated Scale of Impact
  • ~12 million agreements potentially affected 
  •  One of the largest UK financial mis-selling events since PPI
5. Estimated Compensation

Aggregate cost:
  • ~£7.5 billion expected compensation to consumers 
  • ~£9.1 billion total industry cost (including implementation) 
Per-customer:
  •  Average payout: ~£800–£830 per agreement 
  •  Compensation generally includes: 
    •  Refund of commission 
    •  Additional interest/“loss of use” payment 
6. Timing of Compensation
  •  Payments expected to begin: 2026
  •  Majority of claims resolved by: end of 2027 
  •  Firms required to: 
    •  Notify customers within 3 months after implementation periods 
    •  Proactively contact affected customers (not purely complaints-based) 
7. Key Takeaways
  •  The FCA concluded that lack of transparency around commissions led to widespread consumer harm. 
  •  PS26/3 establishes a mass redress scheme rather than case-by-case enforcement. 
  •  The scheme is: 
    • Large-scale (£7.5bn+)
    • Systemic (millions affected)
    • Comparable in significance to PPI remediation

Sources


Risks and Disclosures


An investment in the Digital Loan Notes involves significant risks and is suitable only for investors who are able to bear the potential loss of their entire investment. The Digital Loan Notes are illiquid instruments, and there is no assurance that any active or secondary market will develop for their transfer. 
Repayment of principal and the payment of monthly interest depend on the performance of the underlying litigation finance portfolio, the recoveries generated from insured claims, the effectiveness of the associated Security Trustee structure, the effectiveness of the associated ATE bonds and capital coverage arrangements, and the overall financial condition of the Issuer. Litigation finance is inherently uncertain, and outcomes may diverge materially from expectations, even when underwriting, insurance protections, and operational risk mitigants are in place.
An investment in the Digital Loan Notes involves significant risks and is suitable only for investors who are able to bear the potential loss of their entire investment. The Digital Loan Notes are illiquid instruments, and there is no assurance that any active or secondary market will develop for their transfer. Repayment of principal and the payment of monthly interest depend on the performance of the anticipated portfolio, the recoveries generated from eligible Claims and ATE Policies, the effectiveness of the Security Package and the Capital Coverage Bond, and the overall financial condition of the Issuer. Litigation finance is inherently uncertain, and outcomes may diverge materially from expectations, even when underwriting, insurance protections, and operational risk mitigants are in place.
Prospective investors should review carefully the PPM section titled Risk Factors, together with all other information contained in this Memorandum, and should rely on their own professional advisers—including legal, financial, tax, and regulatory—before making any investment decision or participating in any future offering of Digital Loan Notes.