IMN Litigation Finance Conference – highlighting the importance of ATE insurance

Now we are back in the UK we have time to reflect upon an informative, insightful and productive day at the IMN Litigation Finance conference in New York last week. We met with so many industry experts and made some great new contacts!

In addition to being sponsors of the event, (the Affiniti ‘keep cups’ went down a storm with everyone’s morning coffee, next year we will bring more!) we also appeared on three panel discussions throughout the day. Ian Cunningham, our CEO, moderated the panel discussion “International Perspectives – Assessing Developments in Existing and Emerging Markets”. Grant Cumbley, our Head of Pricing and Risk, participated in the ‘Underwriting Best Practices’ panel.

It was, however, the first panel of the day discussing the “State of the Market”, featuring our Strategy and Operations Director, Joanna Burgess, that generated one of the most interesting discussions.

Moderator Stuart Grant, of Bench Walk Advisors LLC, asked Joanna about her views on the relationship between Legal Funding and After the Event (ATE) insurance. She explained that ATE Insurance, which shifts the risk associated with Legal Funding, the has actually been around a lot longer than many people realise – over 20 years.

Joanna went on to illustrate that despite ATE being required for many UK based claims due to the ‘loser pays’ rules and the potential exposure to the funder for these adverse costs if ATE insurance is not in place, it could, and should actually be introduced internationally on a wider range of claims. ATE insurance cover on cases in most US states would be restricted to an agreed percentage of own lawyer fees and disbursements associated with bring the claim. This is a more attractive proposition to ATE insurers as their exposure on a single case will be less than other jurisdictions, such as the UK. With ATE insurance in place it affords law firms and funders the opportunity to spread their risk across a wider range of cases and therefore accept more claims. Available capital allows firms to grow and can reduce constraints.

Jay Greenberg, of US-based funder, LexShares raised the fact that there aren’t many fully insured litigation products in the US. James Batson, head of Bentham IMF’s New York office pointed out that his firm has engaged in a handful of investments were litigation finance was provided on appeal, with insurance being secured to cover a large chunk of their investment.

Clearly the appetite for ATE is growing, and, as the panel concluded – it is only a matter of time before the big insurance firms jump on board.

Here at Affiniti Finance, we understand the importance of securing greater access to ATE and have some exciting developments coming up soon – so watch this space!

Ian, moderating the ‘International Perspectives’ panel
Grant, participating in the ‘Underwriting Best Practices’ panel
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