Listed third-party litigation funder Burford Capital today announced a deal to provide around £30m financing to a FTSE 20 company.
The arrangement is believed to be one of the biggest sums ever committed to a single company by a litigation funder in UK legal history.
The deal includes a portfolio of pending litigation matters and changes the way the company, which does not want to be named, finances its legal work.
Previously it paid for fees and expenses associated with litigation out of its own resources, but the new arrangement involves Burford taking on the costs in return for a portion of the proceeds from the litigation matters.
The agreement also protects the funder from the risk of any single matter losing as it has stakes in a range of litigation.
Christopher Bogart, Burford chief executive (pictured), said in-house counsel are looking for new approaches to finance litigation and his firm wants to show that it can be easier and more straightforward.
‘This transaction is another example of the continuing transformation of litigation finance into corporate finance for law, and our focus on constructing innovative solutions for businesses of all sizes, including the world’s largest companies.’
Burford has offices in New York and London and its equity and debt securities are publicly traded on the London Stock Exchange. Its share price value rose 2.5% following this morning’s announcement.
In March last year, the company announced a 43% increase in worldwide operating profit for 2014, to £41m.
Since incorporating in 2009, the funder said 32 investments have generated £134m in recoveries, with a 60% net return on invested capital.