US firm Quinn Emanuel Urquhart & Sullivan has signed an agreement with litigation funder Longford Capital to provide financing to the firm’s private equity clients to bankroll legal claims.

Under the terms of the deal, Longford will provide up to $40m in equity capital to Quinn Emanuel’s private equity clients and their portfolio companies that are involved in litigation. The money will finance litigation costs and lawyers’ fees and help monetise the value of ‘meritorious’ legal claims that the clients may otherwise not have pursued due to lack of funds.

Jonathan Bunge, co-chair of Quinn Emanuel’s national trial practice and managing partner of its Chicago office, said: “Quinn Emanuel likes to innovate, and we have already partnered successfully with Longford on several occasions to produce excellent results for clients. This latest collaboration will serve the interests of our private equity clients seeking alternatives and options in pursuing meritorious litigation.”

The deal means the firm’s private equity clients and related companies can access an alternative way to fund litigation and view claims as corporate assets that can be monetised, Longford said. The litigation funder provides financing for disputes related to antitrust, intellectual property, contract, taut and fraud claims.

William Farrell, co-founder and managing director of Longford, said: “We have identified a particular ability to assist private equity managers and their portfolio companies involved in commercial disputes. We look forward to assisting Quinn Emanuel by providing its private equity clients with attractive financial options.”

The deal follows a contraction in litigation funding activity in 2023. US litigation funders committed almost 14% less capital to new deals, according to Westfleet Advisors, which said the decline was down to broader financial market trends that had made litigation funding less attractive for investors relative to other assets. That followed a bumper 2022, when US litigation funders committed $3.2bn to new deals, a 16% increase on the previous year.

Meantime in the UK, the UK government in March outlined plans to introduce legislation that would nullify the impact of last year's Supreme Court PACCAR ruling on litigation funding agreements that had created uncertainty for the sector. The government said the new law in England and Wales would make it easier for smaller claimants to secure third-party financing to take on larger entities that have more financial clout.