Mishcon de Reya has launched a new litigation finance joint venture called MDR Solutions in partnership with litigation funder, Harbour. Nick West, Mishcon Strategy Head, told Artificial Lawyer the project will be heavily informed by the firm’s own data science team.
The first funding vehicle will have around £150m committed to it from Harbour and Mishcon. The two businesses have already been working together on Covid insurance cases, among others.
West told this site they have done a lot of work with them in the last five years and that litigation funding linkups with law firms were increasing. However, he stressed that in their case, this was more than a referral arrangement from Mishcon to the funder, and was the law firm putting partner profits into a special vehicle to be used on cases alongside Harbour – and directly profiting from it.
However, the other side to this is leveraging Mishcon’s growing data analytics capability.
West noted that they don’t assume they can predict the exact outcome of a case, but that using data from past similar cases is something that helps on several levels.
‘Over the last few years we have built up our data science capability and that is the secret sauce here. By analysing this data we can better budget for cases and understand other aspects, such as if a case is likely to settle,’ he said.
‘This is about the economics of the case, and litigation finance is a maths equation. It’s about the probability spread [of different outcomes],’ he added.
But, as said, this is not about some kind of wild stab at ‘AI predicting the result of the case’ as it were, but putting data on the table alongside the experience of Mishcon’s lawyers and also the expertise of Harbour.
‘Look at it this way, if a lawyer has done a type of case 14 times they will have a view on that kind of matter. However, we can perhaps analyse 150 past cases that Mishcon has done over the years and look at a much larger data set. With [the bigger data set] you can get better estimates on things like costs,’ he explained.
So, this is a bit different to what some legal tech companies have tried, and they are keeping their goals quite modest, whilst also making sure they leverage all the data they have on hand.
‘I don’t think you’ll ever get to a point of case outcome prediction with a high level of accuracy,’ he concluded, but their approach should certainly even the odds a bit in favour of making a good decision about what cases they and Harbour should back via the new vehicle.
There will also be new vehicles made in the future. One last point is that although Mishcon is moving steadily toward a planned IPO, that rush of new cash may not be relevant to this, as money for each case will be drawn down as and when necessary for fundings over a long period. I.e. the partners won’t be flooding the venture with new cash, they’ll put it in when each case merits it, so an IPO won’t automatically change the equation here.
In a statement, Harbour CIO, Ellora MacPherson, added: ‘This is fantastic news and the next step in the development of our relationship. We have nine active cases which Mishcon de Reya are advising on and close relationships between the teams at every level of the organisation. We look forward to working even closer together.’
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