Nearly two in three GCs expect legal fees and
expenses to exceed $4 million per
energy transition case
NEW
YORK, Nov. 12, 2024 /PRNewswire/ -- Burford
Capital, the leading global finance and asset management firm
focused on law, today releases new research entitled "Energy
transition disputes: GCs and senior lawyers on the business impacts
of legal challenges to come," which demonstrates how businesses are
preparing for a likely rise in legal disputes related to the global
energy transition. This transition―or the shift to renewable
sources of energy―is likely to cause an increase in expensive
commercial disputes.
Businesses are investing significant sums in this transition,
and corporate commitments highlight the scale of economic
engagement as they invest in the new technologies, infrastructure
and other resources that will be needed. But multifaceted legal and
commercial pressures present businesses with a myriad of potential
challenges including contractual disagreements, regulatory
compliance issues and the need for intellectual property
enforcement or litigation. Burford's research report aims to offer
a unique perspective on how corporations foresee the expected rise
in litigation and arbitration related to this energy transition,
examining the areas of business impact related to this evolving
landscape.
Burford commissioned this independent research by capturing
insights from 300 GCs and heads of litigation across key industries
impacted by the energy transition and spanning North America, Europe, Asia
and Australia.
Key findings from the study include:
Disputes relating to the energy transition are rising
- 76% of GCs report they are already encountering disputes
related to the energy transition and nearly half (47%) expect a
further rise in the volume of such disputes in the next decade,
driven by evolving laws, new technologies and infrastructure
requirements.
Disputes relating to the energy transition are expected to be
costly
- Almost two in three GCs (63%) expect legal fees and expenses to
exceed $4 million per energy
transition case; a notable minority (29%) expect per case costs to
exceed $10 million.
- Over half (52%) view high costs as a significant factor in
deciding not to pursue disputes.
- Half (50%) of GCs agree that the energy transition will create
the need for additional capital sources for the business.
Expected disputes span all types of business conflict
- GCs are most likely to predict (77%) that the energy transition
will result in more contractual disputes and commercial
arbitration.
- Joint ventures are expected to be particularly prone to
disputes over profit allocation (76%) and intellectual property
rights (65%).
- Over half of GCs (57%) also expect their businesses to face
arbitrations to resolve investor-state conflicts relating to the
transition.
New tools are needed to manage the rising dispute
costs
- Legal finance is increasingly used to mitigate the financial
burden of these disputes; three in four (75%) GCs have used or
would consider using legal finance to offset the cost of disputes
relating to this transition.
- In particular, GCs value monetization―or advancing some of the
expected entitlement of a pending claim, judgment or award― to
generate liquidity from claims tied up in litigation and
arbitration. With legal finance, companies can also offset the cost
of pursuing affirmative litigation to generate liquidity, shifting
legal departments from cost centers to value drivers.
Christopher Bogart, CEO of
Burford Capital, said: "Businesses face significant challenges
related to the global energy transition due to cross-border
projects, differing legal frameworks and rapidly evolving policies.
Additionally, long-term energy contracts may not keep pace with
energy markets and technologies, resulting in conflicts among
stakeholders. Burford's latest research demonstrates the value of
corporate finance for law, as legal finance helps companies manage
the high costs of energy transition disputes and allows them to
pursue meritorious claims without depleting resources."
Burford's research is based on a 2024 survey conducted by GLG
and is supplemented by interviews with ten global energy transition
experts conducted by Ari Kaplan Advisors.
The research report can be downloaded on Burford's website.
About Burford Capital
Burford Capital is the leading global finance and asset
management firm focused on law. Its businesses include litigation
finance and risk management, asset recovery and a wide range of
legal finance and advisory activities. Burford is publicly traded
on the New York Stock Exchange (NYSE: BUR) and the London Stock
Exchange (LSE: BUR), and it works with companies and law firms
around the world from its offices in New
York, London, Chicago, Washington,
DC, Singapore, Dubai and
Hong Kong.
For more information, please visit www.burfordcapital.com.
This announcement does not constitute an offer to sell or
the solicitation of an offer to buy any ordinary shares or other
securities of Burford.
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SOURCE Burford Capital
