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UK bank enters litigation funding market

18 November 2011

Investec Specialist Private Bank has become the first UK bank to offer litigation funding for commercial claims.

The FTSE100 company, listed both in London and Johannesburg, will consider funding starting from £250,000 with no set ceiling in principle.

Unlike other third-party funders, Investec has not set up a specific litigation fund and will channel funding requests via its new specialised lending unit set up within its private banking arm.

Investec’s Jonathan Harvey said the new service would allow clients who believe they have a strong case but are not prepared to take on the cash-flow risk associated with pursuing their case to proceed with litigation.

“Over recent months we’ve been approached by a growing number of law firms looking for alternative ways to fund litigation in the commercial sector,” Harvey said. “This is partly driven by changes in the way law firms fund their own working capital and partly by claimants’ growing need for flexible finance.”

Harvey also said the availability of litigation funding could itself be “a powerful asset in bringing about a negotiated settlement, rather than going to court”.

Investec’s new litigation funding service is the latest in a range of services to the legal profession.

The bank already offers credit options for firms looking to fund strategic growth plans and operational initiatives.

In a statement Investec said the professional services team was set up in response to demand from firms wanting to make structural changes to their business as a result of the Legal Services Act.

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