A report on class action recoveries

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Why companies opt out and what they stand to gain

In the US, companies that have suffered injury that is the subject of a class action have two options: They can choose to remain a class member or they can decide to opt out and bring action as an individual plaintiff. For a corporate litigant, opting out has historically meant recovering significantly more than by remaining in the class. Yet many companies decide nonetheless to remain a class member.

In the last few years, Burford has seen an increasing number of major corporations with high value claims choose to opt out. Given this, we commissioned research to delve into how many companies are making the choice to opt out, why they do so, and what they stand to gain. The following findings represent the views of 150 US GCs, heads of litigation and other senior in-house lawyers responsible for their companies’ commercial litigation.1

Use of legal finance correlates to opting out.

Companies that have used legal finance are three times more likely than the general population to say they mostly or always opt out.

Companies’ top reasons to stay in the class are economic.

Not being able to justify the cost of pursuing an opt out claim (64%) and not having the budget to do so (61%) are the top 2 reasons companies remain in the class

Companies’ top reasons for opting out are maintaining control and maximizing return.

The #1 reason large company GCs opt out is their fiduciary duty to maximize recoveries to their company

GCs say the availability of legal finance would impact their opt out strategy.

1 of 2 (52%) say that while they have not used legal finance, its availability would positively impact their decision to opt out.

Companies have valuable class action claims

1 of 5 (19%) report claims worth more than $25 million. Companies that typically opt out are > 3x likelier to have >$50 million in claims than those that remain in the class.

Companies recover pennies on the dollar

56% of companies routinely recover less than 25% of their entitlement when they remain in the class.

Economic constraints—solvable with finance—keep companies in the class

A top reason companies remain in the class is that the cost of pursuing an individual claim exceeds available budget (61%). Legal finance can solve companies’ opt out budget issues when they have high value claims.

Large companies remain in the class due to budget constraints

Large companies’ reasons for remaining in the class are, like small companies’, economic—and solvable with legal finance when claim size merits pursuit.

Companies opt out to maximize return and maintain control

Top reasons for opting out—maintaining strategic control and getting the best return—suggest that GCs view this course as best for business.

Remaining in the class is still the default

Companies are far likelier to mostly or always remain in the class (60%) than they are to mostly or always opt out (8%). The lost value is stark for large companies, which have bigger claims and more upside to be gained by opting out but are currently likelier to remain in the class.

Large company GCs see a fiduciary duty to maximize claim value

Large company GCs cite their fiduciary duty to maximize recoveries as the top reason for opting out. They are also more likely to have a team in place to pursue opt out claims.

Legal finance would change more than half of GCs’ opt out strategies

52% of all GCs surveyed and 56% of GCs with little prior knowledge of legal finance say its availability would positively impact their decision to opt out of a class action.

Companies that opt out are more likely to be legal finance users

Use of legal finance is higher among companies that say they mostly or always opt out. Companies that tend to opt out are almost 2x likelier to have used legal finance compared to all companies and 3x likelier than companies that mostly or always remain in the class. 

Companies that opt out are savvier about accelerating pending claims

Companies that tend to opt out are much more knowledgeable about monetization—a key opt out finance tool to accelerate some of the expected entitlement.

Building a better opt out strategy

GCs recognize that by opting out of class actions and pursuing individual claims, they can maximize recoveries for their companies. Legal finance removes economic barriers to pursuing individual claims, enabling companies to build a better opt out strategy. 

The role of legal finance in an opt out strategy

  • Fund legal fees and expenses associated with pursuing an individual claim
  • Accelerate a portion of the expected entitlement from a pending claim
  • Capital is non-recourse, with Burford receiving its investment back and a return only if and when clients collect on their claims
  • Funding does not impact client control of litigation 
  • For legal teams lacking robust litigation experience or expertise, Burford can help funded clients identify and prioritize their most valuable opt out claims 

Why Burford?


Burford routinely works with Fortune 500 legal teams to finance and monetize high value opt out claims and help them maximize return to their companies

Burford has unmatched capacity to finance commercial litigation and arbitration

Band 1 ranked by Chambers with a team of 140 and 55+ lawyers

We’re fast and easy to work due to in-house diligence and multiple funding sources, including our own permanent capital as a publicly traded company (NYSE: BUR, LON: BUR)