Companies are owed tens of millions of dollars in unenforced judgments, research by litigation funder Burford Capital has revealed.
In a survey of more than 500 financiers in the UK, US and Canada, 78% of respondents said their companies are owed at least $10m by judgment debtors, while half said their companies are owed $20m or more.
The research also found that legal costs are deterring businesses from entering disputes in the first place. Over 60% of respondents said their companies had avoided court action because of legal expenses.
Large businesses are particularly reluctant to pursue claims. More than 70% of companies worth at least $10bn in annual revenue said they had avoided legal action because of upfront costs.
The report says: ‘Paying out millions of dollars to pursue a meritorious recovery effort can be a challenge for companies with liquidity issues, but the data show that even companies with plenty of cash are likely to forgo claims due to legal expenses.’