Dive Brief:

• Only 9% of companies that won in litigation or arbitration in the last five years received the full judgment amount from the losing party on time, a survey of 350 in-house legal leaders found. 
• Half of the companies that won received the full amount after a delay, and another 40% negotiated a partial amount to speed up recovery, according to the survey, conducted by research firm CLG on behalf of litigation funder Burford Capital.  
• “Unenforced awards remain a problem – even more so in the current climate,” Burford says in its 2023 Commercial Dispute & Enforcement Economics survey report.

Dive Insight:

In-house legal leaders are weighing both cost-cutting and cost-shifting measures in response to the economic climate, and among the cost-shifting options they’re considering is financed enforcement and recovery services. 

With these services, the legal leader works with a third party to help it enforce the judgment it's owed, typically in exchange for a portion of the amount that’s recovered. 

Going after judgments isn’t cheap; 74% of legal leaders say the high costs of enforcement and recovery is one of the main barriers to pursuing the money they’re owed.

It’s especially hard to go after a judgment if the losing party is in a foreign jurisdiction. More than 80% of legal leaders say collection is made more difficult when the place of recognition and enforcement is hostile to foreign judgments or awards, and almost 70% say corruption in the courts is an issue. 

These and other barriers make it hard for in-house legal departments to bring the full value of the judgments and awards they’ve won to the organization. In the last five years, almost half of the legal leaders say they’ve only recovered 50% or less of what they’re owed on average, and 31% say they’ve only recovered between 75% and 51%. 

Looking ahead, 57% say they’re likely to use financed enforcement and recovery services to help them get what their organization is owed. 

Legal leaders say they expect the services will bring them expertise in asset tracing and help them avoid having the judgment set aside, among other benefits. The biggest benefit, though, is the immediate liquidity the service will bring while the judgment remains outstanding. Almost 80% say that’s a key benefit of working with a third party.