[Interview] "International litigation & arbitration without cost burden…Only pay agreed amount upon win or settlement"

"Can also be used to pursue recovery of overseas claims"


Interview with Korea Head and Asia Head of litigation finance firm Burford Capital


Confirmed Korean demand in energy, construction, battery, and patent disputes

"There are many companies that decide not to pursue a claim because of the cost, even when they believe they have a strong case. Legal finance allows those companies to enforce their rights without having to fund all of the legal costs from their own balance sheet."

In a recent interview with The Asia Business Daily, Elizabeth Shin, Head of Burford Capital Korea, stated that large-scale patent disputes and investor-state arbitrations can take years, while recovery and enforcement can extend the process even further.

Cross-border litigation and international arbitration involve not only lawyers' fees but also institutional arbitration fees, arbitrators' fees, and enforcement costs. Legal finance providers such as Burford Capital fund those expenses, receiving an agreed return if the client succeeds in recovering money through a judgment, award, or settlement. If the case is unsuccessful, the client is generally not required to repay the capital provided by Burford.

"Legal costs can be financed with external capital"

Founded in 2009, Burford Capital is a global commercial legal finance firm. It has expanded its footprint in Korea this year with a dedicated presence in Seoul. Shin, who spent more than a decade in the international arbitration practice at Lee & Ko handling commercial arbitration, construction disputes, and investor-state arbitration, now leads Burford's Korean business.

The reasons companies turn to legal finance vary based on their size. Small and mid-sized companies may lack the financial capacity to pursue costly proceedings overseas. On the other hand, large corporations tend to consider legal finance as a way to decide how to allocate limited capital and internal legal resources among multiple disputes.

"For large companies, it is not necessarily a question of lacking resources. It is more about where to focus those resources," Shin explained. "Companies that are handling numerous cross-border disputes have limited internal capacity and budgets, so legal finance can allow them to pursue some matters using external capital."

Quentin Pak, who leads Burford's business in Asia, compared legal finance to traditional corporate finance.

"The money you spend on lawyers is not going to create any profits for you; it is not revenue-generating," Pak said. "In the same way that companies may have a lot of money but they still access the capital markets or get financing for their office building, look at legal expenses the same way. Don't use your own capital; use someone else's capital."

Pak sees significant growth potential in Korea. "My hope is that Korea will be the biggest revenue driver for us in the Asia region," he said. "It is a very big economy, there is a lot of cross-border business, and there are a lot of global players that are Korean companies. With that comes disputes, and then come opportunities."

Demand emerging in energy, construction and battery disputes

In Korea, demand has been particularly evident in the energy, construction, and infrastructure sectors. Large overseas projects often involve multiple contracting parties, jurisdictions, and governing laws, making disputes both more complex and potentially larger in scale.

Demand is also emerging in advanced technology sectors, including batteries. U.S. patent infringement cases, investor-state arbitration, and M&A-related disputes are among the other matters Burford has been reviewing in Korea.

"We have continued to receive inquiries involving construction, energy, and infrastructure, and we have reviewed quite a number of matters in those areas," Shin said. "We have also reviewed investor-state arbitrations, M&A-related disputes, and U.S. patent infringement cases."

She added that details of individual matters generally cannot be disclosed because of client confidentiality obligations and the private nature of many arbitration proceedings.

Financial institutions and securities firms can also use legal finance to pursue unrecovered overseas claims or distressed receivables. Multiple claims can be bundled into a portfolio, with Burford providing capital for local proceedings and enforcement efforts.

Burford generally focuses on larger commercial disputes. According to Shin, the threshold in global markets is around $50 million, while in Asia the firm may consider matters around the $30 million level, reflecting the characteristics of the regional market. Smaller individual claims may also be combined into a portfolio.

"More uncertainty means more disputes - and greater caution over legal spending"

Pak said the current economic uncertainty and trade tensions could support further growth in legal finance. Economic volatility can lead to more contractual defaults and commercial disputes. At the same time, companies may become more reluctant to commit millions of dollars of their own capital to litigation.

"There are likely to be more disputes because of economic uncertainty," Pak said. "People who are maybe not doing so well are now defaulting on contracts, so there will be more disputes."

At the same time, he said, companies are becoming more cautious about spending their own money on claims.

"When things are uncertain, companies may say, 'Let's not spend millions trying to bring a claim against our business partner,'" he said. "Given the reluctance for companies to spend their own money, the logical next step is that people might be more interested in someone like ourselves and trying to get external capital."

Pak said the biggest obstacle to growth in Asia is not a lack of demand, but a lack of familiarity with legal finance.

"The main hurdle that we have to overcome is simply one of familiarity," he said. "Even now in Singapore, I go and see companies - big companies - and they say, 'Oh, I didn't realize that you could get funding for arbitration.'"

Lawyers also play an important role in expanding the market, he added, because they are often the first point of contact when a dispute arises and are in a position to explain available financing options to clients.

Korea, in Pak's view, is particularly well positioned to overcome that hurdle. Korean companies have extensive cross-border business exposure, while the country's legal community has substantial international experience. Many Korean practitioners are also qualified in jurisdictions such as the U.S., giving them some familiarity with third-party funding and legal finance.

"Korean companies and the Korean legal community are very sophisticated," Pak said. "There are a lot of cross-border deals, so there is a lot of economic activity, and with that comes disputes."

Shin said her immediate priority is to increase awareness of legal finance among Korean business owners, senior executives, and in-house legal teams.

"I want more Korean companies to feel comfortable considering legal finance as one of the options available when an overseas dispute arises," she said. "Over the longer term, I hope we can build successful examples in industries where Korean companies are particularly strong and develop long-term partnerships with our clients."

This content was produced with the assistance of AI translation services.