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In NYLJ, Burford's Mark Klein makes the business case for opting out of high-value class actions

  • Monetization
November 14, 2022

Burford General Counsel and Chief Administrative Officer Mark Klein addresses fellow GCs in a New York Law Journal piece based on Burford's independent research, stating the strong business case for opting out of high-value class action matters.

Klein writes: "Despite the likelihood of achieving a larger recovery, companies are still far more likely to remain in the class than to opt out. The lost value is stark, particularly for large companies, which have bigger claims and potentially more upside to be gained by opting out.

"The fact that remaining in the class is still the default is not surprising. However, this is arguably changing and will continue to do so as GCs and CFOs face growing economic pressure to maximize the value they extract from their companies’ litigation assets. In the past few years, as GC of the world’s largest provider of legal finance, I have seen more and more large corporations recognize the economic benefit of opting out...

"Interestingly, even companies that have used legal finance or are familiar with it are less likely to be aware of a key product—monetization—that can be very compelling to an opt-out strategy. Under a monetization arrangement, a legal finance provider can advance capital tied to a pending opt-out matter, thereby helping a company monetize, or realize, the value of the claim almost immediately. This solution accelerates payment, preserves working capital and locks in a recovery amount for an opt-out claim, thus reducing risk of loss."

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