Errol Elsdon: Black Rock Makate Claim for 40% of Vodacom Settlement

• Errol Elsdon, representing Black Rock Mining, claims 40% of Nkosana Makate's 'Please Call Me' settlement.
• The claim stems from a 2011 funding agreement, with Black Rock nominated in July 2013 to fund Makate's 18-year legal battle against Vodacom.
• Makate disputes the funding amount, stating less than R8,000 was provided, while Elsdon asserts he contributed R4.39 million.
• Elsdon publicly represented other entities, Sterling Rand and Raining Men, as Makate's funder for years before Black Rock re-emerged following Makate's settlement.
• An arbitrator, Andrew Mabena, ruled in 2020 that Black Rock held the rights under the funding agreement, a finding Elsdon now relies upon for his claim.

This protracted dispute over entitlement, shifting funder identities, and the critical need for robust contractual terms and transparent documentation of funding contributions serves as a cautionary example for legal professionals.

Errol Elsdon has re-emerged to assert a claim for 40% of the undisclosed settlement Nkosana Makate received from Vodacom in the long-running "Please Call Me" case. Elsdon, representing Black Rock Mining, bases this substantial demand on a 2011 funding agreement initially established between Makate and the late, disbarred advocate Chris Schoeman. Under this arrangement, Schoeman was to provide financial support for Makate's legal battle against Vodacom, both in his personal capacity and through a company yet to be named.

Court documents indicate that Black Rock was formally nominated in July 2013 to serve as the funder for Makate's protracted 18-year legal fight. This nomination, according to the terms, entitled Black Rock to 40% of any eventual winnings should Makate succeed. However, the exact amount of funding provided is a point of contention. Makate contends that the funders contributed less than R8,000, a figure sharply contrasted by Elsdon's assertion that he personally provided R4.39 million to support the litigation.

The 'Please Call Me' matter, which traversed four courts before its eventual settlement, concluded with an undisclosed sum. Despite the confidentiality, Elsdon claims the settlement amounted to R1 billion. This figure differs from an estimate by Peter Takaendesa, Chief Investment Officer at Mergence Investment Managers, who calculated the value at R660 million. The significant discrepancy in both the funding provided and the alleged settlement value underscores the complexity of the ongoing Nkosana Makate Black Rock dispute.

The public face of the funding for Makate's case saw considerable shifts over the years, with Errol Elsdon representing various entities. Between 2013 and 2016, Elsdon did not publicly associate himself with Black Rock Mining. Instead, media reports from August 2013 (Mail & Guardian) and May 2016 (ITWeb) identified him as the founder or representative of Sterling Rand, another company. In May 2016, Elsdon even stated on CNBC Africa to Bruce Whitfield that Sterling Rand was committed to funding the matter "all the way... up to the Constitutional Court."

Further complicating the narrative, by June 2016, media reports indicated Elsdon was also leading a company called Raining Men, alongside early funder Tracey Röscher. Companies and Intellectual Property records confirm Elsdon and Röscher were listed as directors of Raining Men as early as 2014. Elsdon subsequently vanished from public discourse concerning the 'Please Call Me' case after mid-2016, though he remained active as a director of Sterling Rand in unrelated litigation.

Despite these public representations, court papers reveal a different aspect of Elsdon's activities. A London case from 2013 shows Elsdon, acting as Black Rock's director, sought funding from Bermuda-based Global Distressed Alpha Fund III. The question of which entity held the rights under the original funding agreement was eventually put before arbitrator advocate Andrew Mabena in 2015. Mabena's ruling in 2020 ultimately favored Black Rock, a finding that Elsdon now relies upon to substantiate his claim for 40% of the Vodacom Makate settlement percentage. Notably, Mabena also challenged Elsdon's claims of representing Sterling Rand, with Elsdon admitting to "showboating" to promote Sterling Rand when confronted with newspaper articles about his and Röscher's statements. ITWeb found no further court papers linking Elsdon with Black Rock until last November, coinciding with Makate's settlement.

The protracted nature of the 'Please Call Me' case, which involved an 18-year legal battle and multiple court appearances, highlights the inherent risks and complexities associated with high-stakes litigation funding in South Africa. The ongoing dispute over the Errol Elsdon Black Rock Makate claim serves as a stark illustration of how initial funding agreements can become entangled in subsequent claims, counter-claims, and shifting corporate identities. The divergence between Makate's assertion of minimal funding and Elsdon's claim of substantial investment underscores the critical importance of meticulous record-keeping and unambiguous contractual terms in such arrangements.

This case offers significant lessons for legal professionals advising clients on litigation funding agreements. The fluidity of funder representation, as seen with Elsdon's public association with Sterling Rand and Raining Men while simultaneously pursuing funding for Black Rock, emphasizes the need for thorough due diligence on all parties involved. The eventual arbitration by Andrew Mabena, which clarified Black Rock's rights, demonstrates the necessity of clear dispute resolution mechanisms. This protracted dispute over entitlement, shifting funder identities, and the critical need for robust contractual terms and transparent documentation of funding contributions serves as a cautionary example for legal professionals. It underscores that even after a primary legal battle concludes, secondary disputes over funding can emerge, potentially diminishing the ultimate recovery for the original claimant.

Lawyers advising clients on litigation funding agreements, particularly in complex, high-value disputes, should note this case as a cautionary example of the potential for protracted disputes over entitlement, shifting funder identities, and the critical need for robust contractual terms and transparent documentation of funding contributions.

Source: Reporting based on legal news coverage.