How does Burford combine legal finance with ATE insurance?

Liz Bigham: What is after-the-event (ATE) insurance and why is it useful in cost-shifting jurisdictions and in arbitrations?

Philipp Leibfried: Fundamentally, adverse cost insurance is a form of legal risk management. It addresses so-called adverse costs exposure, which is liability for costs of the other side where you lose a case, and it really arises in all major jurisdictions around the world with a notable general exception being the US.

Liz Bigham: What kind of coverage does Burford offer through Burford Worldwide Insurance Ltd (BWIL)?

Philipp Leibfried: BWIL in its most basic form provides after-the-event insurance, which means that in a given matter where the claimant loses the case, any adverse costs risk that may arise after that loss will be borne by BWIL. In other words, the claimant does not run the risk of having to pay an additional amount after losing a case—that is the key advantage.

Liz Bigham: Finally, Philipp, could you speak to what's unique about Burford’s offering in the ATE space and what trends we're seeing?

Philipp Leibfried: What's really unique about BWIL is that first of all, it's owned by Burford, and it provides Burford’s clients a unique value proposition by having access to it—BWIL only insures cases of Burford clients. It is able on its own to write very large policies, policies in the tens of millions of pounds, euros, or dollars, as the case may be, from one single insurer, which often is harder to assemble independently in the market. That provides a huge advantage to our clients, and it is good for Burford too, because it is possible to finance the case in a more economically attractive way. 

In terms of trends, we're seeing adverse cost insurance is certainly becoming more prevalent, including in cases that are otherwise financed. It's an attractive tool to address a risk that isn't always obviously addressed by simply providing capital for it. Insurance is more attractive in those cases very often. And finally, in a way, the biggest trend we're seeing is that ATE insurance, especially large ticket ATE insurance, is becoming more and more prevalent, not just in litigation, but also in arbitration. Burford is uniquely positioned to address that for its clients, and it's a trend we're excited about.