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Report: Litigation Funding Usage Increasing

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New research by GLG that was commissioned by litigation funding specialists Burford Capital shines light onto the increasingly common use of third party litigation funding to resolve business disputes of all types.
GLG approached a cross section of private law firms, in-house legal departments and other related professionals in the USA, UK and Australia, the territories in which use of litigation funding is most prevalent. The law firms surveyed had between 10 and 500 lawyers, whilst the in-house legal professionals were at firms with annual revenues ranging from £80m to over £4bn. Overall, use of litigation funding by private law firms has increased from 37% to 89%, with funding use by in-house teams also doubling over 3 years to 76%.

Covid-19 Impact

The survey also questioned the law firms and in-house legal departments over the impact of the ongoing coronavirus Covid-19 pandemic. Whilst most of those surveyed were somewhat pessimistic, UK solicitors were the least so with regard to potential staff cuts. Just under half (48% of private practice lawyers said they thought that their firm’s revenues would reduce as a result of the downturn, with 46% of in-house solicitors expecting their budgets to be reduced overall. When it came to the likelihood 0f headcount reductions, 44% of US lawyers said this was likely and 43% in Australia, compared to only 24% in the UK.

UK lawyers also responded more positively when asked whether it was likely that their firm would use legal finance to “mitigate the impact of the current downturn”. More than half of US lawyers thought this was likely (53%), compared to 83% of UK lawyers.
Covid-19 challenges also provoked some positive responses; 75% of lawyers said it would allow them to rethink and improve past approaches to doing business, while over 65% highlighted the “significant benefits” from remote working. Most private practice lawyers (78%) said legal finance made them more competitive in the market, while 68% said their firms were likely “to build or augment” contingency fee practices. In commenting on the survey results, Burford said:

What is very clear from this independent research is that the legal sector is on the cusp of significant change, particularly in how it thinks about financing and managing risk…There is an increasing sophistication in understanding that legal departments and law firms have assets that can be financed—and with that an increase in expectations about what a legal finance provider should offer.”

 

Commercial Litigation Funding

If you are thinking about taking legal action against another individual or company but are worried about the costs involved, Advantage Litigation Services have the skills and expertise to help you find a way of funding commercial litigation without risking your personal finances or those of your business. Click here to contact us today or call 0800 160 1298 to see how we can help.

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