Winning isn't enough: Planning for enforcement from day one

Few disputes are now confined to a single jurisdiction, a single defendant and a single path to enforcement. Increasingly, disputes involve offshore holding structures, sophisticated asset protection strategies, parallel proceedings and multiple enforcement jurisdictions. Cryptoassets and other mechanisms for moving value quickly across borders have added a further layer of complexity.

Claimants’ tools for identifying, preserving and recovering assets have also evolved. Courts in many jurisdictions remain committed to bringing bad actors to account, and have developed sophisticated mechanisms to identify assets, obtain information and preserve value. Applications for disclosure, interim relief and receiverships are far more common than they were even a few years ago.

As disputes have become more international and complex, they have also become significantly more expensive. Multiple legal teams, local counsel, experts, interim applications and parallel proceedings all increase costs.

As a result, disputes are assessed not only by their legal merits, but also by cost, duration, enforcement risk and commercial return.

Recovery should shape litigation strategy

A common misconceptions is that enforcement begins once there is a judgment.

In reality, enforcement  should shape the overall dispute strategy rather than the final stage of it. By the time a judgment is handed down, assets may have been moved, ownership structures changed or competing creditors may have gained priority. In some jurisdictions, those competing claims can significantly reduce, or even eliminate, recoveries.

Before proceedings begin, claimants should have a clear view of the practical path to recovery. That means asking questions such as:

·         Where are the relevant assets located?

·         Who ultimately owns or controls them?

·         Can those assets be moved?

·         Which jurisdictions are likely to become involved?

·         Will interim relief be required?

·         Would asset tracing or disclosure applications improve the prospects of recovery?

Asking these questions after judgment is often too late..

Planning early also allows claimants to deploy interim tools that can materially improve the prospects of recovery. These can include disclosure applications (such as Norwich Pharmacal Orders or applications under 28 USC §1782), asset tracing exercises, freezing injunctions and the appointment of receivers. Although these tools serve different purposes, they all seek to obtain information, preserve assets or prevent steps that could frustrate enforcement.. Used well, they can also create settlement leverage by changing the practical dynamics of the dispute long before final judgment.

Pursuing the right strategy, not just the affordable one

The increasing complexity of international disputes also creates a commercial challenge.

Claimants are rightly cautious about incurring substantial legal costs, particularly where there remains a possibility that the defendant will pay voluntarily or settle. At the same time, many of the procedural steps that can materially improve recoverability and encourage settlement, such as asset tracing, disclosure applications or interim relief, can themselves involve significant additional cost.

If recovery strategy is developed from the outset, legal finance decisions should be made at the same time. “Funding” is still often associated with paying legal fees, but that is only part of the picture. Claimants increasingly use legal finance to support broader dispute strategies, including asset tracing exercises, disclosure applications, freezing relief, receiverships and parallel proceedings alongside the principal litigation.

This reflects a broader market shift. Legal finance is routinely treated as part of ordinary dispute planning, alongside insurance, settlement strategy and balance-sheet management, rather than as an exceptional product considered only once costs become unmanageable.

The aim is to enable claimants to pursue the strategy that offers the greatest prospect of a successful commercial recovery, rather than the strategy that happens to fit within an internal litigation budget.

More than capital

If legal finance is part of strategic dispute planning, it’s value extends well beyond capital: .

1.    Independent diligence. Every investment is supported by detailed legal and commercial diligence. Alongside assessing legal merits and quantum, considerable time is spent reviewing the overall litigation strategy, testing assumptions and identifying potential risks. That independent assessment is often valuable in its own right, helping clients and their legal advisers refine strategy, identify areas requiring further investigation and support internal decision-making before significant costs are incurred.

2.    Enforcement expertise. A significant part of Burford's diligence focuses not simply on whether a claimant is likely to succeed, but on what happens if they do. Burford's in-house team of lawyers and investigators analyses issues such as asset locations, debtor behavior, enforcement pathways and jurisdictional considerations to assess the practical route from judgment to recovery. That expertise can help clients develop more effective international enforcement strategies alongside their legal advisers, because ultimately a judgment only has value if it can be converted into cash.

3.    A “signaling effect”. The involvement of a legal finance provider can also influence the dynamics of a dispute. Defendants often recognize that an independent third party has undertaken extensive diligence and concluded that the claim has sufficient merit and commercial prospects to justify a non-recourse investment. Equally, the presence of funding demonstrates that the claimant has the financial resources to pursue the dispute through to judgment and, where necessary, enforcement. In some cases, that can have a meaningful impact on settlement discussions and litigation strategy.

Conclusion

Businesses deciding whether to litigate increasingly ask not simply whether they can win, but whether pursuing a dispute is the best commercial decision. Cost, duration, recoverability and enforcement strategy all feed into that decision.

As disputes become more international, the distinction between “litigation strategy” and “enforcement strategy” is becoming less meaningful. The two are increasingly developed in parallel, with each informing the other from the outset.

Legal finance has evolved alongside that shift. Rather than being considered once proceedings have started, it has moved into the broader strategic discussion, helping claimants evaluate options, pursue the most effective recovery strategy and maximize the commercial value of their legal assets.

Winning a case is an important milestone. Successful disputes are measured by what they recover.