US dispute financier Burford Capital is to acquire UK legal expenses insurer Firstassist in a £10.3m deal to create a firm offering both after-the-event (ATE) insurance and litigation funding.

Burford is one of the world’s leading financiers of litigation and arbitration and listed on the London Alternative Investment Market. It was attracted to the UK market by the Jackson proposals for litigation funding.

In a statement to investors, the company said the acquisition of Firstassist 'is attractively priced and structured at a multiple that reflects the uncertainty associated with the Jackson reforms on the ATE business'.

It said: ‘Through it, Burford gains the services and brand of a leading team to launch an aggressive push into third-party funding as an adjunct to, and hedge for, the ATE business.

‘The acquisition is expected to be significantly earnings-enhancing in 2012 and to produce the leading UK provider of litigation capital and insurance solutions.’

Firstassist, which has been providing ATE insurance on the UK market for more than 15 years, will continue to have its underwriting capacity provided by Great Lakes Reinsurance, a subsidiary of Munich Re.

Peter Smith, managing director of Firstassist, said he expects demand to increase for third-party funding in the coming years.

He added: ‘We will look to capitalise on our existing track record, wide network of relationships and transferable risk assessment skills to create a one-stop shop for litigation funding and insurance, offering significant benefits to solicitors and their clients.’

The deal, which will see Burford chairman Sir Peter Middleton become the chairman of Firstassist, is subject to FSA approval.

Burford’s share price rose 3% on the news.