Litigation funding giant Burford has been granted a licence to set up an alternative business structure.
Burford declined to comment on the development but the licence opens up the prospect of a funder pumping cash into its own law firm.
Burford has already moved beyond the funder’s traditional role of investing in individual cases, to funding ‘books’ of litigation. In October, it agreed to provide £30m to claimant firm Hausfeld to finance German competition claims, enabling the law firm to establish an office in Berlin.
Earlier this month, the funder announced a deal to provide £30m to an unnamed FTSE20 company to finance a ‘portfolio’ of litigation.
Burford claims to be the world’s largest provider of investment capital for litigation and funds all types of commercial disputes. It is also an after-the-event insurer and has a specialist division for the enforcement of judgments globally.
The law relating to champerty and maintenance currently prevents third-party investors in litigation from taking a controlling interest in cases.
Lawyers working in an ABS owned by a funder would be subject to the same professional duties towards their clients and the court as those working in traditional law firms.