09 Sep 2021

Mishcon de Reya launches litigation fund

City firm links up with Harbour Litigation Funding to set up £150m war chest for future cases

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Leading City disputes firm Mishcon de Reya has partnered with Harbour Litigation Funding to launch MDR Solutions I, a litigation fund that will see the parties allocate £150m to finance potential claims.

The fund will support various matters, including non-performing loans and asset recoveries, complex fraud claims, IP disputes and group litigation. All are core areas for Mishcon, which has offices in London and Singapore, both key disputes hubs.

Mishcon’s chair Kevin Gold commented: “It is critical that we have the right structures and support in place to realise our ambition to become one of the leading complex disputes practices internationally.

“For some time, we have been assessing the litigation funding market and exploring potential opportunities. Creating a strategic partnership with Harbour enables us to deliver on our objectives with one of the most respected litigation funders in the world.”

Harbour CEO Martin Tonnby said the partnership “reflects continued growth in the demand for litigation funding and is the natural next step in our long-term relationship.”

He added their commitment was “based on the depth of our relationship, their track record and our ongoing belief in their litigation and arbitration capabilities. The scale of our investment reflects this.”

Harbour is currently funding nine cases on behalf of Mishcon’s clients and has previously committed over $200m in cases where Mishcon acted for the claimant, including the FCA Test Case litigation in which it successfully intervened in the UK Supreme Court and related insurance arbitration proceedings against Hiscox, as well as long-running litigation against the Royal Bank of Scotland, ultimately settling a £4bn shareholder group action.

The new fund will be operationally separate for regulatory reasons but will work with Mishcon’s 280-lawyer team of litigators and arbitrators. It will assess and invest in Mishcon’s cases, with both Mishcon and Harbour contributing capital, although the Financial Times reported that the amount of partner capital was limited. The fund is expected to be the first in several such ventures.

It will, however, call on Mishcon’s data science resources. The firm has invested in that area through chief strategy officer Nick West and uses AI techniques to extract valuable knowledge from Mishcon’s systems to help predict costs.

The deal follows a steady trend in which law firms and funders have sought new ways to work together. PCB Byrne brokered an innovative agreement in June 2020 by which Burford Capital took a 32% stake in the firm as part of a larger portfolio funding deal. DLA Piper also announced a £150m deal with Litigation Capital Management last year to launch its new litigation fund Aldersgate Funding.

Separately, Mishcon announced plans to pursue an IPO on the London Stock Exchange in a deal that would see partners and staff become shareholders

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