Affirmative Litigation Programmes – Reframing Litigation as an Economic Opportunity | USA

At the highest level affirmative litigation programmes are programmes by which a company begins to view litigation not just as a necessity but as an opportunity.

These programmes allow companies to approach litigation as an economic opportunity to generate income.

When disputes arise in existing (potentially long-term) business relationships, companies may have to balance the value of pursuing their rights through litigation with the risk of jeopardising those relationships.

In addition, companies often face economic pressures, rising outside counsel costs, delays in recovering proceeds, and increasingly complex regulatory frameworks, all of which may deter companies from pursuing this type of action.

In-house legal departments are often seen by companies as cost centres, primarily concerned with the defence and protection of the company rather than as a potential source of income. Proactive in-house counsel may change this outlook by using business units as claim finders, analysing challenges experienced by different sectors and identifying their causes.

In light of concerns companies may have about delays that arise from litigation in recovering expenses or compensation, in-house counsel can make affirmative litigation programmes more attractive by adopting creative litigation strategies.

For example, in antitrust claims against a number of different defendants, companies might adopt a litigation strategy with a high likelihood of achieving early recovery, as settlements may be able to be reached with some of those companies.

Litigation funding is a mechanism where a third party provides funding to the client in the form of fees or costs so that the client can pursue litigation. This way, the company is not facing a capital outlay by paying lawyers, and the law firm is not required to take on the full risk in the form of a contingency.