- Law firms
- New litigation finance arm launches with $200 mln commitment
- Mishcon partner says risk appetite has risen as litigation finance has proven its benefits
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(Reuters) - Mishcon de Reya has established a new litigation finance arm to fund litigation and arbitration cases for its clients, it said on Wednesday, becoming the latest major law firm to publicly ink a deal with a litigation funder.
London-based Mishcon created the new venture, called MDR Solutions I, in partnership with Harbour Litigation Funding, which has committed about $200 million to the fund.
Mishcon is at least the third law firm to publicly team up with a big litigation funder in about a year. Willkie Farr & Gallagher in June entered into a $50 million agreement with Longford Capital Management LP. In August 2020, DLA Piper partnered with Litigation Capital Management and a new third-party funder, Aldersgate Funding Limited, led by a former DLA Piper corporate partner. That deal also set out to offer clients access to about $200 million.
Mishcon said its fund will operate separately from the law firm but will work with its 280-lawyer team of litigators and arbitrators, who are based in its London and Singapore offices.
The venture will fund matters including non-performing loans and asset recoveries, complex fraud and intellectual property disputes. The fund will evaluate and invest in potential cases that the firm originates, Mishcon said, adding it will "benefit from sophisticated data science capability and expertise" that the firm has built.
Harbour, which says on its website that it is the "largest privately-owned dedicated litigation and arbitration funder," is based in London. Harbour already has a relationship with Mishcon and is currently funding nine of its cases, the law firm said.
Richard Leedham, a Mishcon dispute resolution partner who heads the firm's commercial litigation practice, said the new partnership stems from Mishcon thinking about how to take more financial risk that benefits both the firm itself and clients.
"We've traditionally been quite conservative as a firm, not generally taken a lot of risk in litigation cases and have just been paid in the usual way," Leedham said. "We've seen the advantages [of] litigation funding, and that led to discussion about how we might want to go about doing something where we would take some risks."
Mishcon will co-invest with Harbour, meaning the firm will contribute "a small amount of capital" toward the fund, Leedham said. The law firm is also "taking risk on the cases in the sense that we are going to defer an amount of our work in progress on a given case," he said.
Leedham said third-party litigation funding has become "more attractive across the market," and clients see the practice as a legitimate way to finance cases in certain situations.
In one signal of the burgeoning industry, several big commercial litigation funders - including Harbour - banded together last year to launch a global trade group, the International Legal Finance Association.
Harbour CEO and founder Martin Tonnby in a statement said the new partnership with Mishcon "reflects the continued growth in the demand for litigation funding."
Kevin Gold, executive chairperson of Mishcon, also highlighted the new venture as a way to support clients.
"It is critical that we have the right structures and support in place to meet the developing needs of our growing client base and to realize our ambition to become one of the leading complex disputes practices internationally," Gold said in a statement. He said the firm hopes MDR Solutions I "is the first of a series of similar ventures in the future."