Selecting a disputes financier: Why experience and scale matter

As one of the oldest and best-regarded dispute financiers in the world, Bentham has long advised claimants and counsel to select a well-established funder with the depth of experience and resources to adequately back their claims.

Just how important are scale and experience in the equation? Consider our company’s recent moves to provide global reach and expertise for clients. IMF Bentham announced that it would merge with Omni Bridgeway, a leading European litigation funder, in a move that will make our funding team the largest globally. With the merger, Bentham will have on-the-ground teams in Australia, Asia, Canada, Europe, the Middle East, the United Kingdom and the United States.

Increasingly in litigation finance, global stakes are at play. A funder must be able to handle claims from a wide variety of locales—particularly in international arbitration hotspots around the world. And they require the resources to handle the needs of global companies, which are discovering the benefits of funding as a corporate finance tool for accessing revenue and reducing legal costs.

Experience is critical, as well. Our newly merged company will have 33 years of extensive experience in funding claims, and Bentham, which was established in Australia, was the first publicly listed litigation funder in the world. For companies seeking funding, an experienced funder can help assess the strength of litigation and provide connections and advice on counsel and experts that can help maximize recoveries.

Growing Demand Around the Globe
As an article last year by DLA Piper noted, “the pace of change” in the world of commercial litigation and arbitration will “accelerate in the coming decade.” Among the issues DLA cited as driving global demand for litigation and arbitration services: the increase in disputes originating in Asia; the focus of many big-dollar disputes on science and technology, intellectual property rights and social media (“the smartphone patent litigation wars will be repeated in other industries,” DLA said); and growing competition among arbitral institutions for business.

Demand is already surging. Since 2012, the number of cases before the world’s most active international arbitral forums has increased by 34 percent, according to recently published data. In 2018, the latest year for which data is fully available, bodies like the International Chamber of Commerce and the London Court of International Arbitration reported their most or second-most active years ever.

Meanwhile, financing has spread quickly around the globe in the last decade. In the world’s largest litigation market, the United States, funding was in its infancy just a decade ago. (Bentham opened its first U.S.-based office in 2010). It has grown into multi-billion-dollar industry in the space of just a few years. Asia, too, has opened to funders. In 2017, for instance, after a lengthy review process, regulators in Singapore and Hong Kong approved the use of litigation funding in international arbitration cases. Both locales are hubs for international arbitration, and funding is now increasingly used by parties with arbitral claims.

The nature of financing has developed as well. Global corporations have discovered the benefits of funding as a corporate financing tool, one that allows them to pursue plaintiffs-side claims and convert litigation from a potential drain on finances into a revenue-generating asset. 

The Benefits of Scale
A litigation financier of sufficient scale can help a global company fund portfolios of carefully curated claims across business units which can have significant plaintiffs-side claims that have not been pursued, often because companies fear incurring the increased costs and other risks traditionally associated with litigation. 

By coordinating those claims and working with Bentham to identify and pursue meritorious cases, a company can create a significant recovery program with the potential for capturing millions of dollars for the company. And they can do so without taking on significant additional risk that will jeopardize corporate profits.

A funder like Bentham IMF, staffed with litigation experts and deeply experienced in identifying the value of cases, can help companies develop a coordinated strategy to pursue their claims. Bentham’s team can evaluate the company’s cache of potential litigation, select claims that are strongest on the merits and that have the greatest potential for a significant return, and fund portfolios of cases that can translate into a multi-million-dollar windfalls for the company.

At Bentham, we have assembled an elite team of veteran litigators, many with significant experience at major law firms, to vet and manage our investments. With our merger, we will have a 145-member team fluent in 20 languages and that includes enforcement lawyers, economists, financial experts, business intelligence, and asset-tracing professionals with experience funding commercial, antitrust, intellectual property, arbitration, whistleblower, bankruptcy and multiparty claims.

Our team understands every aspect of the litigation process, and this level of experience allows us to conduct deep due diligence during the underwriting process. We are able to identify claims that are meritorious and that have the greatest possible chance of a successful judgment or settlement. 

To learn more about litigation financing and how your company or law firm can benefit from our scale and experience to unlock the value of litigation assets, contact us for a consultation. And visit our Company Insights to learn about the CLE seminars we offer to companies interested in working with us. There, you also will find our recent client podcasts, blog posts and videos.