Litigation funder eyes ABS as way to finance law firms’ contingency fee work

Print This Post

25 October 2012


Carron: DBAs mean firms have shortage of working capital

A litigation funder with £40m a year to invest is considering using alternative business structures (ABSs) to make funds available to law firms, according to its chief executive.

Speaking at the Law Society’s civil justice section conference last week, Brett Carron, the chief executive and co-founder of Harbour Litigation Funding, said Harbour would consider funding arrangements with firms willing to work under damages-based agreements (DBAs, formerly known as contingency fees), which are due to be introduced next April.

One option would be for a firm to set up an ABS structure including funding vehicles for their firms, or departments within their firms, said Mr Carron. “From our point of view we would certainly look at those kind of arrangements, where we were comfortable with the lawyers working on those kinds of cases… so we would effectively become an ABS funder for that particular group within that particular firm.”

He emphasised that Harbour was not interested in becoming an ABS provider or a source of capital for the firm. “We’re really focused on litigation rather than on financing law firms generally,” he said.

The firms would have to be interested in doing DBAs, said Mr Carron. “Part of the issue with DBAs is that from a law firm’s point of view you have a shortage of working capital – you have all the [work in progress] tied up, you’re not able to bill for it. You hope the case will be successful but you don’t know if it will, so for some firms it puts enormous pressure on them – it limits their ability to do these kind of things.”

 

Tags: , , , ,



One Response to “Litigation funder eyes ABS as way to finance law firms’ contingency fee work”

  1. Interesting tactic in the use of ABS structures here, it looks as if the legal industry in already taking more entrepreneurial steps in response to turbulent times. I’ll be keeping a close eye on how this develops.

  2. Kerry Quinn on October 25th, 2012 at 3:32 pm

Leave a comment

* Denotes required field

All comments will be moderated before posting. Please see our Terms and Conditions

Legal Futures Blog

Make your mark: Personal branding for barristers

stand out from the crowd

A recent Legal Futures article reported that the number complaints involving use of social media by barristers is increasing. The BSB have warned that “as social media and the internet become more prominent in our daily lives, there is an increasing need for barristers to be very careful about what they post whether in their professional or personal lives”. While inappropriate use of social media isn’t anything new, what struck me when reading that paragraph is that, for barristers, I would argue, there shouldn’t be a defining line between the personal and professional. As a barrister, you are your own USP, your personal brand is everything.

August 17th, 2017