EDINBURGH law firm Anderson Strathern has looked to further diversity its business interests with the launch of a claims management business that will see it fund disputes in a no win, no fee basis.

Alba Claims, which is being run by firm chairman Bruce Farquhar and solicitor advocate Alistair Dean, has been set up to help channel more work into the firm, with partners taking on the risk of funding the disputes and only getting paid if they are successful.

Mr Farquhar said the firm made the move after “identifying the difficulties that people were encountering when raising commercial claims”.

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“There are difficulties around pursuing claims and the way that claims are funded,” Mr Farquhar said.

“In addition to potentially being liable for the other side’s expenses if you are not successful you also have to pick up your own fees.

“People are being put off by a combination of cashflow and there being no guarantee of success.”

Alba, which is wholly owned by the law firm, will take on claims that it believes have a good chance of succeeding, with Anderson Strathern meeting the costs of each dispute.

The firm will recoup that money as and when an award of damages has been made and will absorb the costs of any unsuccessful claims.

“For it to work we are looking for claims that have a monetary value and a good prospect of success,” Mr Farquhar said.

While Anderson Strathern’s lawyers will also handle all the disputes initially, Mr Farquhar said the intention is to open Alba up to a wider panel of firms in the future.

The move comes after fellow Scottish law firm Shepherd and Wedderburn unveiled a similar funding initiative in July, when it teamed up with litigation funder Burford Capital.

Under the terms of that deal, Shepherd and Wedderburn has received an eight-figure sum from Burford that it will use to offer alternative fee arrangements to a portfolio of clients. In return Burford will receive a share of the proceeds as and when any of the matters succeed.

It is also common practice for personal injury firms such as Digby Brown and Thompsons to meet the upfront costs of cases on clients’ behalf and recoup their expenditure when matters successfully conclude.

Mr Farquhar said the Alba model differs from that of personal injury firms because the business will be focusing on bringing in disputes related to issues such as construction, insolvency and intellectual property.

“It’s not the same as on the personal injury side where there will be multiple claims because accidents happen every day,” he said. “It’s a different market.”

Mr Farquhar added that the Alba launch fits with Anderson Strathern’s strategy of looking at new ways of diversifying the business away from pure legal services.

“This is continuing down that path of exploring areas where we can create an opportunity for the firm,” he said.

Anderson Strathern also has a wealth management arm, Anderson Strathern Asset Management (ASAM), which turned over £1.7 million and made a profit of £252,000 in the year to August 2016.

That business, which is also wholly owned by the law firm, is run by former Aberdeen Asset Management global distribution head John Brett, who joined the business last year.

Although Mr Brett is focusing on making ASAM a standalone entity, it refers clients to the law firm and vice versa.

Mr Farquhar said that Alba, which has already passed work on disputes valued at around £1m to the firm, would also be looking for referrals from the firm that it could organise the funding for.

“The model we are pursuing is that Alba Claims will be actively looking for claims to pursue,” he said. “There may also be claims that come in to us via the law firm, though.”