Litigation lawyers say billions of pounds are lost through unenforced awards after cases conclude.
A survey of more than 200 private practice lawyers, in-house counsel and corporate executives found unenforced judgments and arbitration had cost their clients millions of pounds.
Almost one in five respondents said their clients’ unenforced judgments added up to between £7m and £35m in the past five years: 14% of lawyers valued clients’ losses at more than £35m.
The study, carried out by litigation funder Burford Capital, found 86% of private practice lawyers have clients who in the last five years have not been paid the full value of a successful litigation or arbitration judgment or award.
‘If one were to add up the lost value to companies around the world when they cannot enforce judgments, the collective sum would be billions,’ said Christopher Bogart (pictured), chief executive of Burford Capital.
The majority of corporate executives surveyed (58%) confirmed their companies have not been paid the full value of litigation and arbitration judgments in the past five years.
The majority of lawyers said the prime reason awards could not be satisfied was because debtors’ assets were hidden offshore.
Regions most likely to put up barriers to securing judgment awards were identified as Russia, the Caribbean and Asia.
The survey, conducted in conjunction with the Lawyer Research Service, found parties are often spending millions in legal fees – and taking several years – to recover damages owed.
Meanwhile, another litigation funder has announced it has secured a new debt facility to increase its funding pot to around £377m.
Vannin Capital, which has offices in London, Sydney and Melbourne and a presence in Washington and Paris, secured the money through New York-based Fortress Investment Group.
Vannin chairman Dan Craddock said: ‘We’re seeing an ever-increasing number of opportunities, particularly in Europe, Australasia and the US where our teams are based.
‘The new facility will enable us to launch a wider range of funding solutions and expand our already large and diversified asset portfolio.’