Matt Lee is a Principal leading Burford’s underwriting and investment arm in Australia, based in Sydney.
Having recently joined Burford’s team after a career as a litigator at one of the world’s largest law firms, what convinced you to leave private practice to join the legal finance industry?
While I’ll miss the stand-up advocacy, Burford presented a unique opportunity to work with law firms, corporate clients and shareholders (in Australia and across the globe) to find creative and cost-sensitive solutions to legal disputes in a manner that promotes access to justice. Burford really spoke to my background as a dual-qualified lawyer in Australia and the US—with broad experience across litigation, international arbitration and appellate matters—because the role in leading Burford’s expansion in Australia will require me to draw upon all of that experience.
Litigation finance in Australia has predominantly been used to finance shareholder class actions and insolvency-related litigation. With Burford’s entry into the Australian legal market, we aim to grow market share in areas of commercial litigation and arbitration that have not traditionally been a core focus of local funders, such as IP, complex contract disputes, competition claims, construction disputes and even defense matters.
Given our size, depth of experience and global reputation—Burford is the ideal platform for working with Australia’s best law firms and their clients to offer new and improved legal finance products that extend beyond those that other smaller firms in Australia can offer and reflect the fact that companies, law firms and investors now routinely face disputes that require multi-jurisdictional experience and strategies.
As a dual-qualified lawyer in both Australia and the US, what do you perceive as being the most significant differences between the two legal markets?
There are three notable differences:
- Australian case law allows funders to play a more active role over the course of litigation and control of litigation by third-party finance providers is not prohibited as it is in other jurisdictions, such as the UK and the US. Although some of the local funders take full advantage of this leniency, Burford is different: Notwithstanding our depth of experience in legal and financial analysis (that adds significant value over the life of the cases we fund), we are passive investors and firmly believe that control should sit with the client and their lawyers. Each deal is set up to make this relationship explicit—we do not control strategy or settlement.
- Contingency fees are currently not permitted in Australia. Although law firms are permitted to apply a small uptick to their legal fees upon successful resolution of a case, true contingency fees are not permitted. This changes the dynamic of legal finance both for the finance provider and for law firms, because Australian law firms and their clients often seek to collaborate with funders from the outset of a case. It is worth noting that even if the ALRC’s recommendation for the introduction of contingency fees is eventually enacted into law in Australia, Burford is ideally situated, especially given its experience in the US, to collaborate with law firms that take cases on a contingency fee basis.
- In Australia, costs follow the event and parties must bear exposure to adverse costs orders. In some instances, the threat of such costs orders and/or the need to put up security for costs can be deployed as a tool for deterring the pursuit of meritorious claims. As a result, a finance provider’s offerings have to account for an additional set of costs that are less common in the US. Burford is unique in the sense that it has the ability to provide clients with financial options that ensure that adverse costs do not act as an insurmountable barrier to access to justice.
While litigation finance got its start in Australia, its use in the region is still largely limited to the class action and insolvency contexts. How do you foresee this changing?
Increasingly, law firms and corporate legal teams will expect legal finance to offer solutions to their business challenges beyond simply ensuring that legal fees are paid in class actions and insolvency-related disputes. Additionally, corporates, investors and law firms are looking for funders that can provide solutions to disputes (or portfolios of disputes) that transcend one jurisdiction. Our clients choose Burford because we can seamlessly work across jurisdictions. Corporate clients may use legal finance to remove liability and de-risk their balance sheets, and law firms may use it as a business development tool or to achieve greater predictability around their billings. As part of this expansion, legal finance will evolve from a tool used almost exclusively by plaintiff’s firms to being used by both law firms and their corporate clients to unlock value through portfolio financing; claim and judgment monetization; and assistance with the recovery of assets in foreign jurisdictions.
From your perspective, what distinguishes Burford—as a relative newcomer to the Australian finance market—from other legal finance providers operating in the region?
Besides having greater capital availability than all of our global competitors—Burford has a true depth of multijurisdictional experience and a track record of offering novel legal finance products in contexts that extend well beyond class actions and insolvency-related disputes. This experience and track record—in addition to the experience our team has working on Australian disputes (in the roles of funder, solicitor and barrister)—means Burford is well-positioned to develop innovative financing solutions to address the individual challenges of the Australian law firms and companies with which we work. We bring our global experience to bear both in our financial analysis and our legal analysis. This makes a real difference when we work with global corporate clients and firms who need creative legal financing solutions that reflect the multijurisdictional scope of their business operations.
The ALRC report was published in January. What do you anticipate being its biggest impact on litigation finance in Australia?
Amongst its recommendations the report notably advises removing the current restrictions preventing law firms entering into damages-based contingency arrangements and placing various checks on funders. However, the biggest impact will result from the way the federal and state courts in Australia continue to shape common law solutions to the recommendations in lieu of formal regulatory change—which seems less likely given our current political environment. Australian courts have already taken up the lead on this front and we can expect further clarification in the near future from Australian courts on a range of issues relevant to litigation finance, including: the permissibility of common fund orders; how to resolve multiplicity proceedings; a court’s discretion to approve and/or alter settlements in class actions; and requirements relating to what forms of security for costs are permissible and adequate.
Top five… Australian foods that you missed living in New York
- Farmers Union Iced Coffee
- A decent meat pie or sausage roll
- Chicken Twisties
- West End Draught