The Decade of Disputes & the impact of litigation fundingDownload a PDF of this article
As the “decade of disputes” continues, research by FTI Consulting has found that third-party litigation funding will support the rise of high-profile claims.
2020 marked the beginning of a decade of corporate disputes, according to FTI Consulting’s survey of over 2,000 business leaders. Now, with the global litigation funding investment market expected to reach $13 Billion in 2021, FTI Consulting’s “decade of disputes” series analyses the impact of this growing resource for backing claims in the corporate sphere. London appears to be a global centre of this trend with a reported £2Bn of cash held by UK’s litigation funders at the start of the year.
This research was conducted by FTI Consulting among 250 global institutional investors to assess their perspectives. A summary of the methodology and sample base is outlined at the end.
89% of institutional investors surveyed by FTI Consulting expect companies in their portfolio to face legal proceedings with claimants backed by litigation funding. The highest expectations are from investors that predominantly invest in North America (91%) vs Europe (85%) and Asia (82%).
COVID-19 has also dramatically affected the nature of the global litigation market. While financial services organisations, consumer goods companies and big tech businesses indicated greatest preparedness for litigation, FTI Consulting’s updated research at the start of 2021 indicated supply-chain disruption and worsening business conditions have brought a new dynamic to commercial disputes – with the majority of cases now reported in the press.
FTI Consulting’s previous study of investor sentiment towards litigation found that media coverage “strongly affects” the investment decisions of 61% of institutional investors analysing companies engaged in corporate disputes – led by hedge funds, which were most reactive to litigation covered in the media, followed by endowment funds and sovereign wealth funds.