Hospitals Seen as Potential Growth Area for Litigation Financing

The litigation-financing industry could see new demand from an increase in health care lawsuits, according to Christopher Bogart, chief executive officer of litigation funder Burford Capital Ltd.

“There is such enormous economic pressure in the health care industry that it leads to a fair bit of bad behavior and quite a significant number of disputes,” he said during a media briefing Tuesday. “Insurance companies are increasingly difficult in paying health care claims. That’s probably true for you personally, but it’s also true for corporates.”

Litigation finance is a $15 billion industry in which investors fund lawsuits in exchange for any award or settlement if a case is successful.

It’s a “relatively new” trend for hospitals to seek such financing, according to Bogart, but insurers not paying claims has become so prevalent that some hospitals bundle cases up and bring one large arbitration or litigation action. He didn’t disclose if Burford is funding any ongoing cases.

Publicly traded Burford, which is celebrating its 15th anniversary and has a portfolio of more than $7 billion, gained notoriety after backing entities which last year won a $16 billion judgment against Argentina. The US said last month it was “actively considering” whether to file a statement of interest by Nov. 6 concerning Burford’s request that Argentina turn over its 51% interest in state oil company YPF SA.

“It’s not impossible that the US will take the position that goes too far,” said Bogart.

Photo: Photographer: Bing Guan/Bloomberg