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Christopher Rother, a former managing partner at Hausfeld, has established a litigation funding firm in Manheim, Germany.

Rother joined Hausfeld in 2016 when the U.S. firm set up a Berlin office in an effort to bundle thousands of consumer claims against Volkswagen. Hausfeld chairman Michael Hausfeld saw an opportunity for the firm in the Volkswagen emissions scandal, dubbed Dieselgate. In 2015, Volkswagen had admitted to having intentionally programmed diesel engines installed in millions of cars globally to skirt U.S. emissions standards.

Rother said he decided to leave Hausfeld to launch Profin, a litigation funder backed by a triple-digit million euro sum provided by an unnamed private equity firm. "My goal was to establish Hausfeld in Germany, and I reached that goal in a very short time," Rother said in a telephone interview. "And once you've reached a goal, it's time for a new goal."

The market for litigation funding in Germany has grown in recent years, according to Rother, who is Profin's CEO and managing director. "When I entered the market with Hausfeld, it was underdeveloped," Rother said. "In many ways, it is more demanding than the U.S. or U.K. markets," as German law lacks the provision for class action suits.

VW owners are left with a choice: They can join the newly created Musterfeststellungsklage, a model declaratory action intended to facilitate collective redress for consumers in cases of mass damages caused by large companies. Or, they can bring individual suits against VW. The model declaratory action allows qualified institutions, such as consumer organisations, to bring actions against companies to determine the validity of consumers' claims against the company. This means owners will still have to take separate action against Volkswagen.

Rother is betting that representing the thousands of VW owners who don't want to join the declaratory action will be lucrative enough to sustain Profin. Using a number of legal tech tools, he believes he can find both the customers and determine the regional courts that have a record of handing down judgments against Volkswagen. He said a settlement is the most likely outcome for these claims, making it easier and faster for consumers to collect a payout from Volkswagen.

Rother said the need for litigation funding in Germany will continue long after Dieselgate's resolution: "Consumer claims will always be interesting as long as the financial impact is high enough," he said.