Litigation Funding On The Rise In The United States, Abroad

Litigation Funding On The Rise In The United States, Abroad

In last week's Advisen webinar on 2012 D&O claims trends, one of the audience questions related to the growth and relevance of litigation funding in the U.S. In responding to the question I noted, among other things, the rise of litigation funding outside the U.S., particularly in Australia and Canada - a point I underscored in a blog post late last week noting the growing importance of litigation funding in Canadian class action litigation.

Consistent with this litigation funding theme, on February 1, 2013 the Am Law Litigation Daily ran an interesting interview of Christopher Bogart, the CEO of Burford Group LLC, one of several firms in the vanguard of the growth of litigation funding in the U.S. Burford Group is the investment advisor for Burford Capital, which according to its website is "the world's largest provider of investment capital and risk solutions for litigation." (The formal relationship of the various Burford entities is described here.) Burford's shares are listed on the London AIM exchange. Bogart helped co-found Burford in 2009, after serving as an attorney for the Cravath, Swaine & Moore law firm and as general counsel of Time Warner.

The Am Law Litigation Daily article asks the rhetorical question whether the "litigation funding moment" may have arrived, based on Burford's reported results for 2012. Among other things, the article notes that Burford took in $47 million in recoveries from 12 investments (which may consist of either a single case or a portfolio of cases for a single client). The article also notes that overall Burford has provided $373 million in financing for over 46 investments. According to a January 24, 2013 Financial News article (here), Burford reported a return on investment for the completed cases of 61%, with further recoveries pending. The Financial News article suggests that this may be the period where litigation funding "comes of age."

In another sign of the firm's apparent progress, in a January 21, 2013 press release (here), Burford announced the addition to its U.S. operations of several new hires, including the addition of Georgetown University Law Professor Jonathan Molot as Chief Investment Officer.

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Read other items of interest from the world of directors & officers liability, with occasional commentary, at the D&O Diary, a blog by Kevin LaCroix.

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