The popularity of litigation finance, where investors can put forward money to fund a legal case in return for a share of the proceeds, is on the rise according to a new survey.
Burford Capital, the litigation finance firm backed by star fund manager Neil Woodford, found that 37 per cent of companies or law firms across the UK, the US and Australia had already used litigation finance.
Of the ones who hadn't, 57 per cent of law firms and 49 per cent of in-house law departments said they would consider its use in the next two years.
“The survey results show that litigation finance has grown rapidly in a short period of time to become widely known among and increasingly used by lawyers and clients,” Burford's report stated.
The UK was the region which had used litigation finance the most, with 41 per cent of UK respondents saying they had agreed to take external capital.
It was also the region which reported the most growth in take-up of litigation finance over the past two years, with 70 per cent of in-house and law firm respondents saying thy had increased its use compared to 59 per cent overall.
Lawyers in the UK were also most likely, at 67 per cent, to agree that they would be increasingly nimble in serving clients the more they innovated their financing.
Most respondents to Burford's study were likely to seek financing for the most high-risk commercial matters such as intellectual property and patents.
The average investment sought for a single case was $3.4m (£2.6m) for in-house lawyers and $2.8m for law firms.