City’s top litigation team puts third-party funding on agenda as investment house tipped to enter the market
Third-party funding is set to break into the mainstream of City litigation as it emerges that Herbert Smith is considering offering outside funding to clients, while a string of companies are also targeting the market.
The Herbert Smith initiative, which is being personally overseen by litigation chief Sonya Leydecker, has led to the creation of a working party under litigation partner Anna Pertoldi to investigate the issue.
The group, which was launched in the summer, will address whether the firm should promote third-party funding options to clients. Such a move would be a highly symbolic coming from the City’s top litigation team.
Leydecker told Legal Week: “There are a series of policy decisions we will need to make this year and then have a chat with partners to educate them and get their view. This is a new element in the market and one which will remain.”
Meanwhile, lawyers are watching the development of recently-launched specialist broker Calunius Capital, which was set up this year by two former investment bankers, Mark Wells and Mick Smith.
Calunius in July secured approval from the Financial Services Authority to act as a specialised adviser and intermediary in litigation and general dispute risk. The business claims to be the first broker in the
The two initiatives come amid mounting expectations that investors are looking to enter
In particular, senior litigation lawyers pointed to a planned launch in the funding market by a major investment house this autumn, with Deutsche Bank being highlighted as a possible candidate. The bank was unable to comment as Legal Week went to press.
The accountant Smith & Williamson also this week confirmed it is set to offer litigation funding in insolvency proceedings, although this is a slightly different model from third-party funding.
The largest independently-funded case to hit the
David Greene, head of litigation at