Affirmative recovery programs are a growing trend, and with good reason. ARPs involve monetizing existing litigation once believed to be too costly or time consuming to pursue. Burford’s 2021 Legal Asset Report has some telling insights on ARPs. This year’s survey includes 378 senior financial officers of companies whose revenue is at least $50 million annually.
An LFJ Conversation with Michael Kelley, Partner, Parker Poe
Affirmative recovery programs are a growing trend, and with good reason. ARPs involve monetizing existing litigation once believed to be too costly or time consuming to pursue. Burford’s 2021 Legal Asset Report has some telling insights on ARPs. This year’s survey includes 378 senior financial officers of companies whose revenue is at least $50 million annually.
Burford Capital details that a growing number of companies have vigorous affirmative recovery programs— with 73% calling their ARPs “extensive.” Still, almost half of those say that their current programs don’t meet the needs of the company completely. Companies with revenue over $1 billion annually are among the most likely to claim that their ARPs need improvement.
Nearly half of those surveyed stated that their companies left judgements unpursued, due to how much it would cost to enforce. Not surprisingly, companies who said their ARPs were inadequate were 27% less likely to enforce judgements.
How does one set up an affirmative recovery program? And won’t doing so add cost and risk to the business? What about duration risk?
By working with a litigation funder, companies receive non-recourse funding to pursue cases in exchange for a portion of any awards or settlements. A financed ARP shifts costs and transfers risk in exchange for a portion of a judgement that would have otherwise remained unpursued.
