Alternative Litigation Financing in the United States: Issues, Knowns, and Unknowns by Steven Garber

Author:Steven Garber [Garber, Steven]
Language: eng
Format: epub
ISBN: 978-0-8330-5072-4
Publisher: Rand Corporation
Published: 2010-09-15T00:00:00+00:00

Regarding the time and costs involved, Juridica’s CEO has been quoted as follows: “‘It’s a very detailed and expensive process, averaging about 60 to 90 days’ … and ‘Juridica spends an average of $75,000–$100,000 for each screening.’” (Lindeman, 2010, p. 4).16

Some of the ALF companies in this segment may not be sufficiently capitalized currently to have enough cases for their portfolio risk to be negligible through the operation of a law of large numbers. For example, Juridica—which may have the most assets under management available for investments in U.S. litigation among ALF companies in this segment—reports that, as of February 1, 2010, its investment portfolio included 15 investments in a total of 23 cases comprising a total commitment of $121.3 million (Juridica Investments Limited, 2010). Burford, which had been in operation for only a few months at the time that this paper was written, had raised $130 million (The Sunday Times, 2009) and expects its average investment commitment to exceed $3 million (Burford Capital, no date), suggesting a capacity to fund roughly 40 investments initially. As of mid-January 2010, Burford had made five investments, only two of which involve U.S. litigation (Burford Capital, 2009b, 2010).17 Currently, then, the best strategy for limiting risk in this segment may be to concentrate investments in claims that have very high probabilities of a recovery. For example, Juridica reportedly rejects “claims that raise novel legal questions or that will probably end up before a jury” (Glater, 2009).

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