Burford Capital Research Finds Companies Missing Out on Commercial Class Action Recoveries Due to Opt-Out Reluctance

Rhea-AI Summary

Burford Capital (NYSE:BUR) has released new research revealing that US companies are significantly underutilizing commercial class action opt-out opportunities. The study, surveying 301 senior in-house lawyers, found that while 54% of companies had potential recoveries exceeding $50 million in the past five years, 62% typically remained in class actions.

The research indicates that 71% of lawyers believe opting out would have increased recoveries by over 25%. Despite 86% prioritizing maximizing recoveries, companies cite litigation costs and outcome uncertainty as main deterrents. Legal financing solutions, which could address these barriers, remain underutilized, with only 39% of companies having used them for opt-out strategies.

Positive

• 71% of lawyers believe opt-out strategies could increase recoveries by over 25%
• 86% of companies prioritize maximizing recoveries from commercial class actions
• Research provides valuable insights from 301 senior in-house lawyers at major US companies
• Company identifies significant market opportunity in underutilized legal financing solutions

Negative

• Only 39% of companies have used legal finance for opt-out strategies, indicating low adoption
• 62% of companies usually stay in class actions despite potential for higher recoveries
• 73% of in-house lawyers cite litigation costs as a barrier to pursuing opt-out strategies

Insights

Legal Finance Expert

Burford's research reveals massive untapped market for legal finance in opt-out litigation, validating their business model and growth potential.

This research from Burford Capital highlights a significant value-creation opportunity that many corporations are missing. The data tells a compelling story: 54% of surveyed companies had potential class action recoveries exceeding $50 million in the last five years, yet 62% routinely remained in the class rather than pursuing individual opt-out claims.

What's particularly revealing is the disconnect between awareness and action. While 71% of in-house lawyers believe opting out would have increased their recoveries by more than 25%, and 86% say maximizing these recoveries is a business priority, cost concerns and uncertainty prevent them from taking action. This represents a substantial untapped market for Burford's financing solutions.

The research strategically positions Burford's two core offerings: litigation financing (removing upfront costs cited by 73% as a barrier) and monetization (converting future recoveries to immediate capital, which 71% say would make them more likely to opt out). The finding that only 39% have used legal finance for opt-outs indicates significant room for market penetration.

This research effectively serves dual purposes—educating potential clients about an underutilized value-creation strategy while positioning Burford as the solution provider that can remove the primary barriers to adoption. By quantifying both the problem and potential value creation, Burford makes a compelling case for its services while demonstrating substantial growth runway in its core market.

Costs and uncertainty cited as key barriers to opting out—legal finance offers a solution

NEW YORK, June 25, 2025 /PRNewswire/ -- Burford Capital, the leading global finance and asset management firm focused on law, today releases new research showing that US companies are routinely leaving substantial value unclaimed in commercial class action matters by choosing to remain in the class rather than pursuing individual opt-out litigation.

The independent survey of 301 senior in-house lawyers at US-based companies found that, although 54% report that their companies had potential commercial class action recoveries exceeding an aggregate of $50 million in the last five years, 62% reported that their companies always or usually chose to stay in the class. This despite growing recognition of the advantages of opting out—including the potential for significantly higher recoveries.

In-house lawyers cite anticipated litigation costs and uncertainty around potential outcomes as the primary reasons their companies choose to remain in the class rather than pursue potentially higher-value individual claims. Legal finance eliminates upfront litigation costs through fees and expenses financing, which 73% of in-house lawyers cite as a key barrier to opting out. Separately, monetization financing enables businesses to convert a portion of anticipated recoveries from pending claims into immediate capital—enhancing liquidity, improving cash flow predictability and reducing timing and outcome-related risk.

"Corporate legal and finance teams are increasingly focused on value creation, yet many are not leveraging opt-out strategies that could deliver significantly better outcomes," said David Perla, Vice Chair of Burford Capital. "Legal finance eliminates financial barriers to opting out, empowering companies to pursue valuable claims by derisking through fees and expenses financing or by providing immediate liquidity by monetizing a portion of the expected recovery. These options present compelling opportunities for businesses to unlock value and enhance liquidity without deploying internal capital."

Key Findings:

• Opt-outs yield stronger recoveries: Survey results show that in-house lawyers believe opting out significantly increases their recoveries of estimated potential damages, and the vast majority (71%) believe opting out would have increased their company's recovery by more than 25%.
• Cost and uncertainty drive inaction: In-house lawyers cite anticipated litigation costs and uncertainty around outcomes as the main reasons companies forgo opting out, even though 86% say maximizing recoveries from commercial class actions is a business priority. 84% indicate they would be more inclined to opt out if they knew it could significantly increase their recovery.
• Legal finance is an untapped resource: 73% of in-house lawyers identify litigation costs as a key barrier to opting out, yet only 39% have used legal finance to pursue an opt-out strategy—a significant untapped opportunity to mitigate costs and maximize recoveries. Additionally, 71% say access to monetization—converting future expected recoveries into immediate capital—would make them more likely to opt out.

The Survey of In-House Counsel on Commercial Opt-Out Claims was conducted by GLG, gathering insights from 301 in-house lawyers at US-based companies with annual revenues exceeding $50 million. All surveyed companies had been plaintiffs in at least one class action over the past 10 years where the option to opt out was available.

The research report can be downloaded on Burford's website here.

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 works with companies and law firms around the world from its global network of offices.

For more information, please visit www.burfordcapital.com. 

This communication shall not constitute an offer to sell, or a solicitation of an offer to buy, any ordinary shares or other securities of Burford Capital or any of its affiliates.

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SOURCE Burford Capital

FAQ

What did Burford Capital's (BUR) 2025 research reveal about class action recoveries?

The research revealed that 54% of US companies had potential class action recoveries exceeding $50 million in the past five years, but 62% typically chose to remain in the class rather than opt out for potentially higher recoveries.

How much additional recovery could companies achieve by opting out of class actions, according to BUR's study?

71% of in-house lawyers believe opting out would have increased their company's recovery by more than 25% compared to staying in the class action.

What are the main barriers preventing companies from opting out of class actions?

The primary barriers are anticipated litigation costs (cited by 73% of lawyers) and uncertainty around potential outcomes, despite 86% saying maximizing recoveries is a business priority.

How many companies currently use legal finance for opt-out strategies according to Burford Capital's research?

Only 39% of companies have used legal finance to pursue opt-out strategies, despite 73% identifying litigation costs as a key barrier to opting out.

What solutions does Burford Capital (BUR) offer for companies considering class action opt-outs?

Burford offers fees and expenses financing to eliminate upfront litigation costs and monetization financing to convert anticipated recoveries into immediate capital, improving liquidity and reducing outcome-related risk.