Burford Capital: Law Firm and Funder Relationship

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There are 25 actual cases fundable a year?

Remember, I'm not inventing this. If you ask these funders about the percentage of cases they fund, they'll tell you it's less than 5%. In reality, it's 1% or 2%. Some of them might be taking risks, of course. The analogy I often use to describe litigation funding is college admissions. It's like applying to Stanford, which has a 2% acceptance rate. It's the same with litigation funding. You package your case in a certain way, just like you would package a college application. It's not wise to apply only to Stanford, even if your last name is Stanford. College consultants advise you to apply to 15 colleges, including the entire Ivy League, Stanford, and MIT. You hope to get into one and you're satisfied if you do. It's the same with litigation funding.

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Of course, you have to win them.

I've seen cases that have won. One of the risks is not only that your case loses. There have been funded cases where you've gone to trial, but instead of getting 50 million in damages, you've got five. You can lose by winning. All this is priced in. The significant variable we need to discuss is insurance. Many funders are now trying to pass their risk to insurance companies, which are significantly larger and can afford to take risks in a way that funders can't, because funders have investors to answer to.

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