Best practices for building an effective recovery program

Increasingly, businesses that have sustained financial harm are choosing to seek redress through litigation or arbitration and are creating affirmative recovery programs to manage the costs and maximize the value of these efforts. In the 2024 Litigation Economics Survey, over half of executives reported that their companies have recovery programs or intend to develop one.

Many in-house lawyers ask us for best practices for how to put a recovery program in place and how legal finance can support those efforts. Below, we address key considerations for developing a successful recovery program.

Why companies pursue affirmative recovery programs 

When a business has been harmed, litigation may prove to be the last or best means of redress—but it is an expensive one. Affirmative recovery programs not only offer legal departments a way to offset the cost of pursuing a single litigation, but also, and more significantly, to generate significant cash to manage shirking legal budgets and add quantifiable value to the business—sometimes dramatically so. This can be especially important as companies continue to aggressively manage expenses at a time of sustained economic uncertainty.

On its own, one-off proactive litigation may have little material impact on the bottom line of a large company. However, when pursued programmatically and in the aggregate, affirmative recoveries can effectively bankroll the legal department, with significant recoveries from multiple claims generating proceeds that can offset the cost of defensive litigation as well as other transactional costs. 

Affirmative recovery programs are not new; for example, large pharmaceutical and technology companies have long pursued patent claims to protect their intellectual property. Today, household brand names like Coca-Cola, Ford, Tyco, Michelin, The Home Depot, Standard Life and CNH Industrial are increasingly pursuing recoveries from insurers, suppliers and business partners. Effectively, strategic affirmative recovery programs at large businesses can transform legal departments from cost center to profit center.

Key considerations for building recovery programs 

For legal departments that have never pursued affirmative matters, a successful recovery program should be based on a few simple principles. 

Develop a strategy 

Understanding the business is the first step to building a recovery program. Lawyers must identify departments with valid claims and recovery opportunities, guiding colleagues who lack experience in proactive litigation. A strong recovery strategy should be built on a clear business plan that models financial scenarios and sets goals.

Select appropriate cases 

After assessing the organization’s opportunities for recoveries, legal teams should prioritize the highest value matters. Those claims with significant damages that are likely to resolve relatively quickly and thus cost efficiently are particularly good targets. Common areas for recoveries include breach of contract claims, insurance recovery claims, intellectual property claims and antitrust claims.

As experts in valuing legal risk, a legal finance provider can help a company with multiple potential recoveries to prioritize the matters that are most likely to yield the most positive results as quickly as possible. Given the need to marshal internal support for a recovery program, it’s important to set priorities in a quantitative way—and show results.

Appoint the right counsel  

High risk, high reward recoveries often require outside counsel with specialist litigation expertise in the types of matters being pursued. Whenever possible, legal teams should consider counsel who have represented both claimants and defendants in these types of matters, as these experienced counsel offer 360-degree perspective on winning strategies. Legal finance providers may offer valuable introductions to best-in-class counsel.

Fund affirmative recovery programs with legal finance

Legal finance is an important tool for companies that wish to initiate or enhance a recovery program. As a legal finance provider, Burford is an expert in valuing legal risk and routinely works with large businesses to fund their affirmative recovery efforts. For example, a Fortune 500 company recently secured a $325 million non-recourse monetization from Burford, using high-value litigation claims as collateral to boost liquidity and augment the company's affirmative recovery efforts even before the company’s claims resolved.  

By working with a legal finance provider, a company can offload the cost and risk of pursuing claims in a recovery program. Typically, capital is provided on a non-recourse basis with the funder paying litigation fees and costs and/or accelerating a guaranteed financial result ahead of the resolution of the case in exchange for a portion of a future recovery. In the event of a loss, the funder is owed nothing. This shifts the upfront costs and downside risk of a recovery program to the funder, ensuring that the recovery program is effectively supporting the company’s financial goals. Portfolio-based capital facilities offset the cost of multiple recovery matters simultaneously, and these portfolios can include both affirmative recoveries as well as defense matters. 

CFOs often welcome legal finance because it offsets the cost of affirmative litigation and allows the legal team to maximize recoveries without impact on the company P&L. As explained by the general counsel of a global food and beverage company: "[Legal finance] allowed the CFO to time recoveries as necessary and utilize those funds for company investments." 

Add value beyond capital—without ceding control

Companies that work with a world-class legal finance provider like Burford get a long-term partner that can help evaluate the viability of litigation and set priorities pre-investment, provide practical, valuable insight throughout the lifecycle of their matters, and maximize value post-investment. It is essential to note that legal finance providers are passive investors, meaning they do not exert control over the legal assets in which they invest, except in extraordinary circumstances when agreed in advance by the company.

Prioritize high-value matters 

As experts in valuing legal risk, a legal finance provider can help a company with multiple potential recoveries to prioritize the matters that are most likely to yield the most positive results as quickly as possible. Given the need to marshal internal support for a recovery program, this ability to set priorities in a quantitative way—and show results—is key. 

Add value beyond capital—without ceding control 

Companies that work with a world-class legal finance provider like Burford get a long-term partner that can provide practical insights throughout the lifecycle of a case, offering valuable insights to help evaluate the viability of litigation and set priorities pre-investment and maximize value post-investment. It is essential to note that legal finance providers are passive investors, meaning they do not exert control over the legal assets in which they invest, except in extraordinary circumstances. Stated simply, companies working with Burford can rest assured that legal finance does not alter control over litigation and settlement. 

Make the business-forward choice 

As affirmative recovery programs become increasingly commonplace, savvy legal teams will want to proactively recommend such programs to their organizations. In most cases, programs will start out small and grow as early wins help prove out the concept and convince internal stakeholders of the merits. Legal finance can help legal departments seamlessly transition from cost centers to value generators using recovery programs—without taking on added uncertainty or risk. 

This article was originally published on Burford’s website on January 29, 2020 and was updated on September 17, 2025.