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Christopher Bogart, CEO, Burford Capital.

It has been a game-changing year for litigation funding in Asia. The region’s two dispute resolution centers—Singapore and Hong Kong—both passed legislation permitting third-party funding for arbitration cases, a move that is prompting global legal financiers to aggressively seize new opportunities.

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Anna Zhang

Anna Zhang is based in Hong Kong, where she writes about the business of law and legal issues in Asia and Australia.

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[caption id="attachment_580" align="alignnone" width="558"]<img class="wp-image-580 size-full" src="http://www.almcms.com/contrib

  • Norton Rose Fulbright

/uploads/sites/396/2017/10/Christopher-Bogart-Article-201710191809.jpg" width="558" height="372" /> <i>Christopher Bogart, CEO, Burford Capital.</i>[/caption] It has been a game-changing year for litigation funding in Asia. The regions two dispute resolution centers���Singapore and Hong Kong���both passed legislation permitting third-party funding for arbitration cases, a move that is prompting global legal financiers to aggressively seize new opportunities. In early October, New York-based Burford Capital announced the <a href="http://www.international.law.com/id=1202799494127" target="_blank">opening of a Singapore office</a>. And in July, the firm took on its first international arbitration case in Singapore, working alongside Norton Rose Fulbright. This week,��London-based��<a href="http://www.international.law.com/id=1202800633926" target="_blank">Woodsford Litigation</a>��Funding Ltd. also opened in Singapore and started financing its first arbitration there. In addition, Australia-based IMF Bentham announced this month that it had raised more than $115 million earmarked for cases not only in Australia, Canada and Europe, but also in Asia. "When Singapore changed its law earlier this year, it was quite a significant development," Burford chief executive Christopher Bogart said. In other jurisdictions, clients have had multiple ways to offload risk, whether it be to their lawyers or to third parties. But until the change in the law, contingent or conditional fee arrangements were not permitted in Hong Kong and Singapore. "The [new law] opened the door to providing capital to clients and to law firms in a way that has never been done before in the region," Bogart said. Demand for third-party dispute resolution funding was already strong in both markets, according to Bogart. Lawyers, judges and clients recognize that dispute resolution has become very expensive. "But the quantity of it is increasing, and demands on capital in other areas is also increasing," Bogart said. "That creates an environment in which lots of businesses would like a solution other than just writing checks to their lawyers." Indeed, when Woodsford announced the opening of its Singapore office, managing director Charlie Morris said practitioners were starting to understand the benefits and opportunities that funding can provide. In Singapore, there was another factor at play that helped push the new law forward.��Bogart, who had been making trips to Asia for the past few years, lobbied the Singaporean parliament to pass a law allowing third-party arbitration funding. His timing was excellent, as the suggestion struck a chord with the governments��efforts to expand the countrys role��as a center for dispute resolution both in Southeast and South Asia. Things moved relatively fast. Singapore started to consider changing the law in late 2015 and successfully passed the bill in January 2017. The new law is now in effect in Singapore. In Hong Kong, where similar legislation passed in June, the law is not yet in effect. Burford, which now has about $3 billion available for investments globally, plans to start off by offering three products in Asia. The case its now working on with Norton Rose Fulbright falls into the first type: single case funding. While it is riskier and more expensive to finance a single case, Bogart expected it to be the product most Asian clients start with. Eventually, he hopes to persuade more people to adopt the second type of product, which he calls a "portfolio arrangement." Instead of financing one case, a company can��combine��several cases into one transaction. Not only does this lower the cost of capital, Bogart said, but if a company pools together cases from both the claimant and the respondent sides, the��value of claimant cases can also be used to pay for defense costs. The third product, according to Bogart, is��arbitration award monetization. This is for parties that have��already won an arbitration award but the enforcement of that award is pending court review or challenge.��Burford will pay the client toward the value of that award so the client can use the cash and book that as revenue, said Bogart. "One of the models is that we effectively take an interest in a portion of the award, and the client continues to try to enforce it or collect it. We just allow the client to pre-book some revenue from us," Bogart said.��"The other model is that we will actually buy the award entirely; we will pay the client an agreed amount and we will take on the responsibility of enforcing the award." Right now, there is a little bit too much emphasis in the market on single case funding, Bogart said. But on a global level, the firm does more portfolio funding then single case funding. Of course, the flip side to the excitement of having a brand new market that presents new opportunities is the challenge of educating people about offerings and options. "It���s going to take some time to educate the market to develop those opportunities," Burford said. Burfords Singapore-based director, Quentin Pak, will help with that education when he starts on Oct. 30, Burford said. Paks recent experience as an investment banker, combined with his earlier experience as a lawyer at Allen &amp; Overy, will be helpful as he teaches clients how the firms products work. Initially, Burford will focus mostly on the Singapore and Hong Kong markets. Although the legislative change in Hong Kong hasnt yet taken effect, Hong Kong has a client base that makes use of other jurisdictions. In fact, Burford has been providing financing for Hong Kong-listed Chinese companies through their entities registered in the Cayman Islands. Although he plans to start with a focus on arbitration, Bogart is upbeat about the prospects of broader use of third-party litigation funding in Asia. "By starting with arbitration ��� [its] more likely that those early matters are going to be larger business-to-business matters; and it will let people have a real-world look at what���s actually going on in this practice," he said. "But the result of that is going to be an expansion into civil litigation." <

  • Norton Rose Fulbright

> Knitter: Too few entities/relations are generated compared to number of concepts (only 98% (89/90) concepts are converted).

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