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A litigation funder with £40m a year to invest is considering using alternative business structures to make funds available to law firms, according to its chief executive. They have to be prepared to work under damages-based agreements (contingency fees), however.

Alternative business structures may well herald the demise of hourly billing as legal practice becomes even more competitive, the Master of the Rolls has predicted. Contingency fees and price comparision websites will also play a role.

The UK is on the cusp of a “litigation revolution” involving boutique alternative business structures offering externally-funded contingency fee deals, according to the chairman of the Solicitors Regulation Authority, speaking at yesterday’s Legal Futures conference.

Work is needed to determine whether solicitors who offer contingency fees could find themselves on the hook for a successful defendant’s costs, Lord Justice Jackson said last week. He said a working party might be needed to resolve outstanding issues.

More information to help consumers select a solicitor, freedom to choose a lawyer under legal expenses insurance, and the regulation of contingency fees are all areas where the profession and the public should work together, a leading consumer champion claimed last week.