Hospitals seen as potential growth area for litigation finance

The litigation finance industry could see new demand due to an increase in healthcare litigation, according to Christopher Bogart, chief executive of litigation funder Burford Capital Ltd.

“There is such enormous economic pressure in the health care industry that it leads to bad behavior and a fairly significant number of disputes,” he said during a news conference Tuesday. “Insurance companies are finding it increasingly difficult to pay health claims. This is probably true for you personally, but it is also true for corporations.”

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

It’s a “relatively new” trend for hospitals to seek such funding, according to Bogart, but insurers not paying claims has become so widespread that some hospitals are bundling cases and filing a large arbitration or litigation action. He did not disclose whether Burford is funding ongoing cases.

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

“It’s not impossible for the U.S. to take a position that goes too far,” Bogart said.

Photo: Photographer: Bing Guan/Bloomberg

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