U.K. insurance provider Thomas Miller has acquired litigation insurance firm TheJudge Group and the pair have launched a new litigation finance business with access to $1 billion in capital.
The deal, announced Wednesday, will result in the creation of Erso Capital, which will seek to invest in litigation and arbitration requiring capital commitments from $250,000 to $200 million, the firm said in a statement.
Erso will be led by TheJudge Group founders Matthew Amey, James Blick, and James Delaney. Blick is based in California, Amey is based in London, which is where Delaney splits time between New York. Blick said the group has access to more than $1 billion in capital between discretionary funds, single managed accounts and co-investment funds.
Erso said it will provide capital for single-case financing and groups of cases known as portfolios. It will also purchase existing awards or judgments, known as claims monetization.
The investment by Thomas Miller, which also provides insurance for shipping companies and courtroom lawyers in England, adds even more capital to an industry that last year saw an influx of more than $1 billion in dry powder. That amount was raised by funds dedicated to litigation finance.
The Thomas Miller entry is the second major investment in the industry this week, following the majority investment in litigation finance firm LexShares made by private equity firm Brockhurst Capital on Monday.
“TheJudge has a respected and trusted name in this specialist industry and comes with a renowned management team in their sector,” Bruce Kesterton, CEO of the Thomas Miller Group, said in a statement. “We look forward to helping to accelerate the development plans for TheJudge Group and the new litigation fund, Erso Capital, with the support of Thomas Miller’s global platform of businesses and relationships.”
In the U.S., TheJudge specializes in marketing less-expensive litigation insurance as a competitor product to litigation finance. While litigation finance firms typically ask for returns of two or three times their initial investment in successful cases, insurance products are based on premiums that pay lawyers’ fees in losing cases.
The group will continue to provide insurance products, Blick said in a statement. Alexandra Poe, a Hughes Hubbard & Reed partner, advised on Erso’s formation, the statement said.