Litigation funder Burford Capital, backed by Neil Woodford and Invesco's Mark Barnett, has announced a partnership with UK law firm Shepherd & Wedderburn (S&W).
Under the agreement, Burford will provide S&W with a “significant eight-figure sum” to fund commercial litigation across a portfolio of cases.
This is believed to be the first portfolio financing deal between a litigation funder and a major UK law firm in the country's history.
“This portfolio arrangement enhances our capacity to take on new matters on an alternative fee arrangement basis without adding risk to the firm. For clients, that makes us a more flexible and more competitive partner,” said Guy Harvey, head of commercial and international disputes at S&W.
Burford has previously funded lawsuits on a case-by-case basis, such as the Teiner case concerning the Argentinian government's expropriation of two airlines.
Without funding, according to Harvey, businesses or individuals are often unable or unwilling to begin litigation because they either simply do not have the money, or because they are not willing to gamble the amount it would cost to fund a lawyer's fees when they may not win.
But with Burford's funding, S&W will be able to offer a “no-win no-fee” service. The firm takes out insurance to cover its fees in the eventuality that it loses the case, and if it wins then Burford takes part of the damages.
Added to that, because Burford's risk is diversified across a portfolio, the funder can offer a “more attractive pricing” for its capital.
Each case which goes into the portfolio must pass a merits test from both S&W and Burford before it is given approval for funding.
Last week, Burford announced a 170 per cent increase in profit after tax to $142.7m (£108.6m), as analysts praised its progress.