When general counsel gaze into the crystal ball, they see one clear picture for the future: more litigation.
The current economic climate and geopolitical uncertainties mean that in-house legal departments expect to have more claims brought against their companies.
But it also means that legal teams are more likely to be proactive in bringing their own claims – especially if they can use litigation finance to keep the cost of litigation off the balance sheet.
These trends were born out in a study published by litigation funder Burford Capital last week, in which nearly three in four (74%) senior in-house lawyers globally reported that they expected to see an increase in the volume of disputes over the next two years due to the current geopolitical, economic and regulatory environment.
What types of litigation will be on the rise? Many companies plan to be more proactive in bringing claims relating to intellectual property, seeking out and monetising infringements of their patents.
Meanwhile, merger and acquisition activity could be another prime source of litigation – particularly where, post M&A, parties seek to argue that expectations were not met, or contract promises were breached.
Not all in-house counsel have yet taken the step of deploying litigation finance; but it is clear that awareness of litigation funding is growing – and not just among the legal team. Given that litigation finance presents an opportunity to transfer all the costs risk of the litigation away from the company’s own balance sheet and on to the litigation funder, it is no surprise that it is now catching the attention of chief financial officers, as well as heads of legal.
Over the next two years, more litigation will also mean more litigation finance.
July 3, 2023
Insights
