Disputes funder Burford Capital is launching a separate insurance company to cover clients’ adverse costs risk, while Fieldfisher’s consumer-led litigation spinoff Roscoe Reid is beginning a potential £100m equal pay claim against retail giant Morrisons.
In other market news, the Law Society has voiced concerns over reforms proposed by the Disclosure Working Group (DWG) to combat voluminous disclosure.
Burford Worldwide Insurance is being touted as closing a gap in the market. The funder argues that it is difficult in the current insurance market to gain cover once adverse costs exposure approaches £20m, a likely outcome in larger, more complex claims.
Burford Worldwide Insurance is expected to have full regulatory approval ‘imminently’, and will receive financial backing from the funder considerable balance sheet. Burford generated more profit in the first half of 2017 than any full year in its history, with total income rising 130% to $175.5m.
Hausfeld litigation partner Lianne Craig told Legal Business: ‘There is a gap in the market, many insurers don’t want to insure in excess of £10m per case and this can lead to complexities where you are looking for cover above that. There is also increasingly an appetite for funders to deal “in-house” with the insurance aspects of a case. This feels like a natural next step to me.’
Other disputes partners have also seen the benefit, as one said: ‘What Burford is offering is relatively new. If you go to any of the other funders, they will usually say they’ve only got between two and five million pounds behind them to cover adverse costs. They don’t have in-house insurance.’
Shepherd and Wedderburn’s Guy Harvey is unsurprisingly supportive of the new business, given his firm’s ‘substantial, eight-figure’ litigation financing deal it signed with Burford last year. He observed: ‘International arbitration usually involves big sums. I don’t know exactly how many cases there are over the year, but there must be a three-figure number of cases where it amounts to these kinds of numbers. It’s increasingly not unusual in big ticket litigation.’
Meanwhile, Roscoe Reid, an entity set up by Fieldfisher in January to act on consumer-led litigation, is pursuing a potential £100m claim against Morrisons.
The action relates to the alleged difference in pay between the predominantly female workers on Morrisons shop floors and the typically male workers in the grocer’s distribution centres.
Jonathan Hofstetter, who is spearheading the claim, told Legal Business that Roscoe Reid has already attracted 300 claimants. The firm is expecting to spend the rest of the year drawing more to the group, with Hofstetter estimating around 20,000 in total.
‘There’s a lot of momentum to redress this unfairness, which has happened over many years. We believe there has been historical pay differentials between men and women from anywhere between £1.80 and £2.80 an hour, which is very significant.’
Elsewhere, the Law Society has argued that new disclosure reforms should be limited to only cases valued at more than £500,000.
The reforms, drafted last November by a group of lawyers, judges and clients that make up the DWG, suggested scrapping the standard regime in favour of ‘basic’ and ‘extended’ approaches. The proposed system will default to the basic disclosure, which involves parties producing only the key documents necessary to the case. Extended disclosure will be granted at the judge’s discretion.
In a statement, the Law Society said: ‘We have expressed some concern that perceived issues relating to disclosure may exist only in high-value commercial litigation. With that in mind, we have suggested that the working group may wish to consider whether there are existing powers the court could exercise in relation to disclosure.’
The Society also noted that the time and effort required to implement the new regime would put more pressure on the judiciary, which is described as ‘already overstretched.’