Legal Funding in Australia: New Developments

Legal funding is an established and respected industry in Australia. It’s continually expanding and adapting to meet the needs of an increasing client pool. Leading funder Burford Capital has received and vetted more than 10,000 funding requests.

Burford Capital explains that the funding industry predicted that the pandemic would lead to more companies being reticent or unable to spend on new litigation. During risk-averse times, it makes sense to be capital-conscious. But forgoing a valid legal case carries its own costs. Luckily, there are options.

Obtaining non-recourse funding for fees and expenses allows cases to be pursued without an initial investment or financial risk. Award monetization can mitigate risk and speed up the timeline in which a payout is received.

Portfolio finance involves funding for multiple cases—offering capital in exchange for a portion of awards or settlements as they occur. Legal funding can also be used for asset recovery and enforcement of judgments. This is especially valuable in international or cross-jurisdictional matters.

Litigation funding is flexible enough to mitigate the very costly problem of unpursued judgments. About ¾ of very large companies in Australia report unenforced judgments amounting to millions. Funders can provide the capital, and often the expertise needed to enforce high-value judgments.

Arbitration cases can also benefit from legal funding. Accelerating a payout in an arbitration matter can make a vital difference to a company—especially given that many arbitrations take years to reach completion.

Ultimately, litigation funding has not experienced a strong negative impact from Australia’s recent regulations. The scope, use, and flexibility of funding continues to grow.