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On 29 September 2022, Andrew Roberts, Augusta’s Head of Construction & Energy, spoke to an impressive audience of senior in-house lawyers at The Legal 500 Middle East Disputes Summit in Dubai.
Andrew joined a panel comprising of K&L Gates international litigation and arbitration partners, Jonathan Sutcliffe and Ian Meredith, and ABB Power Grids’ Head of Legal for Middle East and Africa, Dominik Engel. The panel explored current trends in third party funding, with a focus on the Middle East region.
Among other important themes, the discussion highlighted:
- The changing drivers for funding, most notably the shift from legal finance serving mostly impecunious claimants to being recognised today as a commercial risk management tool and a legitimate source of capital for financially sound but prudent companies
- The trend towards treating claims as assets with an immediately monetisable value that can generate upfront cash for a business, as distinct from the funding of incurred legal costs
- The benefits of corporate portfolios, which finance multiple claims on a cross-collateralised basis and make funding accessible to a wider range of cases, significantly reduce success fee pricing, and make a bigger difference to a company’s balance sheet
- The paramount importance of enforcement and recovery risk to a third party funder’s assessment of a case, and how measures to ensure certainty and transparency in any jurisdiction will make third party funding more accessible
the particular features of construction claims which – in Augusta’s view at least – make construction one of the most attractive sectors for funding
Following discussions with audience members during and after the panel session, Andrew noted:
“Despite third party funders having serviced this region for a number of years, it was apparent that most big businesses are still learning about the commercial benefits of legal finance. For the many reasons outlined today, we can expect continued growth in the use of funding for disputes in the Middle East, especially in the construction sector where inflation and material costs are heaping pressure on supply chains, eroding profit margins, forcing parties to make legal claims, and driving demand for alternative sources of capital.”
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For a follow-up discussion with Andrew about how third party funding could benefit your business, contact him directly.
