Are you a corporation who wants to sue a foreign government to strip away an environmental regulation, but can’t quite find the millions of dollars necessary to fund a legal team? Before the arrival of Burford Capital, you would have been forced to follow the democratically-established regulations while you operated in the country.
Now, thanks to the innovative financial spirit that brought us credit default swaps, we have an investment fund that will loan you money to pursue your lawsuit, according to a recent article in the Global Arbitration Review. Your company and the investment fund will share the risk of the lawsuit, so you can feel free to fire away at government regulation without much commitment. Their experts will even attend the close-door hearings and give advice to guide your case. They will want a cut of the proceeds when you win the case in court or the settlement, of course.
Why would this firm want to help corporations trump essential labor and environmental laws? One of the executives of Burford Capital answers: “Finance for international arbitration is a market we will increasingly see demand for, and one that we have a special capacity to make a contribution in.”
International arbitration covers a wide set of law, but the most important framework for international arbitration is in the Bilateral Investment Treaties (BITs) that the US has signed with over forty countries. These BITs are agreements that allow corporations to sue governments if they think that the government is unfairly targeting foreign firms with their regulations.
Now Burford Capital is just another layer of grease on the tracks of these antidemocratic lawsuits.
P.S. Does anyone find it a bit ironic that at a time when small businesses are having a tough time gaining access to credit, an investment firm is stepping in and helping these multinational corporations pursue their lawsuits regardless of the volume of their capital reserves?