Shepherd and Wedderburn seals multimillion financing from Burford Capital in UK first

Shepherd and Wedderburn has become the first UK law firm to secure a portfolio financing arrangement with litigation funder Burford Capital.

The Scottish law firm is set to receive an eight-figure sum from Burford Capital, which it can use to offer alternative fee arrangements to clients as well as to grow its reach in commercial litigation and arbitration.

The deal marks the first time a top 100 UK law firm has signed a portfolio financing arrangement of this kind, though US firms have taken up similar deals, including some practising in the UK.

The exact value of the capital injection has not been disclosed. The disputes portfolio against it includes both current and future matters.

Guy Harvey, head of commercial and international disputes at Shepherd & Wedderburn, said: “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.”

Craig Arnott, managing director of Burford Capital in London, added: “The UK legal market is changing and becoming increasingly competitive. Portfolio finance is an essential tool to help UK law firms be nimble and innovative to attract clients.”

In return for the capital, Burford will be entitled to receive a portion of the proceeds from any successful litigation matters in the portfolio. The funder will only be entitled to repayment from the profits of the firm’s litigation practice, not from its other assets.

Burford Capital is backed by British fund manager Neil Woodford and Mark Barnett, head of UK equities at Invesco Perpetual.