The use of outside capital in the legal industry is becoming increasingly widespread in the Netherlands. Companies and law firms alike are using litigation funding to conserve their capital and to invest in growth.
Litigation funding (also called litigation finance or legal finance) is commonly used to remove the costs of pursuing commercial litigation or arbitration, such as legal fees and expenses.
Increasingly, businesses and law firms also use legal finance to accelerate a portion of the expected entitlement of pending claims, judgments or awards, providing immediate liquidity. The funder assumes downside risk of loss in exchange for a portion of the ultimate recovery.
Read case studies about how companies and law firms use finance to manage legal costs and risk.
Although the Netherlands is a relatively low-cost jurisdiction in which to litigate, various conditions have made legal finance an attractive option to claimants:
WAMCA: The introduction of the Act on the Resolution of Mass Damages in Collective Action (WAMCA) in January 2020 has expanded the scope for Dutch claimants, allowing them to seek damages rather than just declaratory relief
Claim consolidation: Dutch courts are willing to consider extraterritorial claims and damages, meaning matters from other European jurisdictions may be consolidated under a single claim
Claim assignment model: Dutch laws allow claims to be assigned to a special purpose vehicle, enabling legal finance firms to pursue litigation on behalf of claimants and provide immediate capital to claimants
Case backlog: Dutch courts continue working through large case backlogs; drawn-out litigation can make legal finance attractive to claimants, who would otherwise face protracted and expensive litigation
With these advantages in mind, claimants have increasingly financed matters within the context of collective actions, securities litigation, international arbitrations, asset enforcement and insolvency claims.
Pay fees and expenses for clients with fee fatigue
Enable the firm to offer client-friendly terms
Offset the risk associated with outcomes or realisation rates
Accelerate or ‘monetise’ claims
Band 1 ranked by Chambers for global arbitration, patent and asset recovery
Veterans of Global 100 law firms
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Publicly traded (LSE:BUR; NYSE:BUR) with the scale to finance matters of any size through resolution
We offer adverse costs coverage through Burford Worldwide Insurance Ltd (BWIL)
Steinhoff International Holdings NV, a Dutch corporation based in South Africa, faced a significant accounting scandal in 2017. The company disclosed accounting irregularities that led to a delay in releasing its audited financial statements. The CEO resigned, and an independent investigation by PwC revealed a €6.5 billion accounting fraud committed by the CEO and a small group of senior executives over nearly a decade. As a result, Steinhoff's share price plummeted by 90%, causing a loss of €12.6 billion in market capitalisation.
Burford represented a shareholder group, including three of Steinhoff’s five largest institutional shareholders, in the settlement process. Once the parties agreed on settlement terms, Burford worked with its clients to collect the voluminous supporting documentation needed to submit their claims to the settlement administrator.
Ultimately, all of Burford's clients' claims were validated by the settlement administrator, ensuring they received their rightful share of the settlement proceeds. In contrast, other shareholder groups had a significant number of claims rejected due to evidentiary deficiencies or other issues.
London
Philipp Leibfried
London
Charlie Rooke
