The economics of litigation: A GC’s decision-making guide

December 10, 2025

Philipp Leibfried

Summary

Burford’s Philipp Liebfried breaks down how GCs can apply economic discipline and legal finance tools to make smarter litigation decisions.

GCs have a unique corporate role: Leaders of enterprises that are not in the business of litigation, when their enterprises are faced with the probability of litigation, they must make decisions about whether and how to proceed on the basis of economic considerations, not just legal ones. This is especially the case as legal departments face ongoing pressure to achieve more with fewer resources. Fortunately, GCs can leverage tools from legal finance to data analytics and AI to help them make sound economic decisions and to guide the significant step of deploying capital for litigation.

At a recent roundtable featuring heads of legal and litigation from dozens of leading European businesses, GCs discussed the questions that typically guide litigation strategy decisions.

1. How do I decide whether to litigate or settle?

The decision to litigate or settle is no longer purely legal, but financial. Forward-looking legal departments increasingly use expected value modeling to weigh cost, timing and probability of success. By applying the same rigor used in other capital decisions, GCs can identify when litigation offers a positive expected return and when settlement makes better sense.

When legal departments seek funding, Burford’s in-house team helps evaluate their matters using proprietary data built from over 15 years of funding complex commercial disputes. These insights enable more precise assessments of case strength, duration and potential value, enabling more informed decision-making.

2. How does legal finance impact litigation decision-making?

GCs value legal finance as a means of pursuing litigation without incurring upfront cost, or as a means of accelerating claim value. Legal finance is not a loan. Burford provides capital to fund or monetize commercial disputes, and repayment occurs only if and when the matter is successful. If there is no recovery, the client owes nothing.

Legal finance can take several forms:

Fees & expenses financing: Funds legal fees and case costs, preserving internal budgets and profitability.
Monetization: Accelerates expected entitlements from pending claims or awards into immediate cash.
Portfolio financing: Provides a single capital facility backed by multiple matters, diversifying risk and reducing cost.

Because the investment is non-recourse, legal finance removes the downside risk of pursuing litigation or arbitration while improving liquidity and preserving working capital for business needs.

3. Does financing impact control?

Control is a key concern for GCs exploring legal finance. Burford’s capital provision agreements explicitly state that control of litigation and arbitration decision-making remains with the client. As a passive financier, we do not control the legal assets in which we invest, except in extraordinary circumstances agreed to in advance by the client.

In short, using legal finance does not alter control, but strengthens the company’s ability to pursue the right cases on its own terms with better resources and less financial strain.

4. How can I reduce duration risk?

Commercial disputes can take years to resolve. The longer a matter continues, the greater the impact on forecasting, liquidity and business planning. Duration risk ties up valuable working capital that could otherwise be invested in growth.

Legal finance mitigates this risk. Through monetization, companies can advance a portion of their expected recovery from a pending claim, judgment or award—unlocking value immediately instead of waiting for resolution. Benefits include:

Liquidity: Immediate capital for any business or departmental need.
Guaranteed minimum recovery: Clients keep the advance regardless of outcome.
Control: Strategy and settlement decisions remain entirely with the client.

CFOs and GCs can thus manage timing uncertainty, smooth earnings and strengthen their company’s financial position by treating litigation assets as strategic tools rather than balance sheet burdens.

5. We have budget—why use external financing instead?

Even large, well-capitalized companies are turning to legal finance as a tool for capital efficiency. Spending cash on litigation reduces profitability and, for public companies, can lower market value. By using external financing, companies can pursue meritorious claims without increasing legal spend or reducing earnings.

Legal finance removes the timing and outcome uncertainty associated with long-running disputes. Whether funding litigation costs or monetizing pending claims, companies gain flexibility and predictability, retaining control while improving liquidity.

For CFOs, this approach aligns litigation management with broader financial strategy.

6. Our legal team is stretched thin—how do we manage litigation efficiently?

Limited internal capacity often pressures teams to settle early or avoid resource-intensive cases.

Burford’s approach to legal finance includes structured case management support that enhances efficiency and oversight throughout the life of a matter.

After making an investment, Burford works with clients to monitor and track the progress of their cases, reviewing budgets, tracking filings and deadlines and ensuring that resources are used effectively. While Burford remains a passive capital provider, our experience allows us to add value to litigation and arbitration strategies post-financing when clients choose to engage further.

This partnership enables GCs to maintain full control while gaining an additional layer of commercial and procedural discipline, freeing internal teams to focus on other priorities.

7. How can AI and data help me predict litigation outcomes?

GCs increasingly want objective, data-driven insights into the strength and value of their matters. AI tools can now assist in early case assessment, identifying patterns across prior litigation and providing better visibility into potential outcomes.

However, human judgment remains essential. The most effective models combine proprietary case data, advanced analytics and seasoned litigation expertise. Legal finance partners with deep data sets can help GCs benchmark expected value, duration and risk before deciding whether to proceed.

8. How should I communicate litigation risk to my CFO and auditors?

CFOs and auditors view litigation through a financial lens: impact on cash flow, earnings and balance-sheet exposure. Legal finance provides a clear framework to express those factors quantitatively.

By financing or monetizing matters, legal departments can show that they have:

Transferred outcome and duration risk to a third party
Improved liquidity without increasing debt
Reduced the accounting impact of legal costs on the P&L

This clarity allows GCs to present litigation not as an unpredictable cost, but as a managed financial asset—one that can be valued, forecasted, and strategically optimized.

9. What about jurisdiction, sanctions and enforcement risk?

A favorable judgment has little value if it cannot be enforced. Many companies face the challenge of unpaid awards or judgments due to sanctions, asset concealment or weak enforcement regimes.

Burford can help clients evaluate recoverability even before litigation begins—assessing both the counterparty’s ability to pay and the practical ability to reach assets.
With global enforcement expertise and dedicated asset recovery professionals, Burford funds and manages complex enforcement campaigns to ensure successful outcomes translate into real recoveries.

Early planning and strategic coordination across jurisdictions can be the difference between paper judgments and cash results. Legal finance partners bring both funding and expertise to manage enforcement from pre-filing to final recovery.

Repositioning the legal department as a business value driver

Modern GCs are expected not only to manage risk but also to contribute to growth.

Legal finance empowers them to do both. By unlocking the value of pending claims, funding affirmative recovery programs and creating capital facilities tied to litigation assets, GCs can deliver measurable financial benefit to their organizations. In doing so, legal departments strengthen their role as strategic partners, generating capital and innovating in risk management while maintaining control.

For guides to legal finance and to learn more about Burford’s experience and proprietary data, visit burfordcapital.com/insights, or contact [email protected].

Philipp Leibfried is Head of Europe, with responsibility for leading Burford’s litigation finance business in the United Kingdom and continental Europe. Based in Burford’s London office, he also oversees Burford’s insurance activity. He previously served as Burford’s UK/European Corporate Counsel.

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