Increasingly expensive arbitration process requires new tools to manage risk Burford Capital (“Burford”), the leading global finance and professional services firm focused on law, today announces a new product that will better equip clients and law firms to navigate a changing arbitration landscape.
A recent study found that the average treaty arbitration costs each party more than $5 million to litigate—and Burford is well-known for providing financing to cover, monetize or transfer risk associated with the ever-rising expense of pursuing arbitration claims.
Yet financing the high cost of prosecuting a meritorious claim is no longer the end of the story. Increasingly, arbitration tribunals make significant costs awards against unsuccessful parties—and thus the risk of having to sustain such a costs award may interfere with parties’ ability to pursue meritorious claims in the first place.
As a result, Burford will now offer indemnity coverage to protect against the economic consequences of such adverse costs awards—coverage that is available to both claimants and respondents.
Burford’s new arbitration cost protection product is simple and straightforward:
- Burford will agree to pay a party’s adverse costs if so awarded
- Burford will not charge any upfront fee for this product
- If the party is successful in avoiding an adverse cost award, Burford will receive a payment for the risk it assumed from any damages recovered (or, for respondents, from their own resources)
Because of its perpetual nature and permanently available capital base, Burford is uniquely capable of offering this novel product. Burford is publicly traded on the London Stock Exchange and has a market capitalization of more than a half-billion dollars.
Christopher Bogart, Burford’s CEO, commented: “Companies shouldn’t have to walk away from meritorious and valuable arbitration claims because they lack the capital to pay lawyers or need to preserve cash for other business purposes. Nor should they be frightened away from pursuing those claims because of the added burden of adverse costs.”