Burford Capital Faces Lawsuit Over Allegations of Interfering in Client Settlements
Whilst the relationship between funder and client is usually mutually beneficial and harmonious, like any type of business partnership there are going to be examples where the opposite is true. In one of the more high profile examples in recent times, one of the world’s leading litigation funders has found itself on the receiving end of a lawsuit from a client, which is claiming the funder is stopping it from settling a number of cases. Reporting from Bloomberg Law reveals that Sysco, an American wholesale food distributor, is suing Burford Capital for blocking its attempts to resolve cases, alleging that Burford is “prioritizing its greed over Sysco’s rights and interests as the plaintiff.” In response to the claim, Burford stated that the settlement amounts are not sufficient in comparison to the value of the claims it had funded, having previously secured an arbitration rule that blocked Sysco from closing these settlement deals. Burford asserted in a statement to Bloomberg that Sysco had broken the terms of the funding agreement, which led to Burford enforcing its right to block the settlements. Burford’s CEO, Christopher Bogart, stated that the breach of the funding agreement had “led to a fundamental economic misalignment between Sysco and Burford of no fault of Burford’s, that in turn led to a unique set of contractual provisions and ultimately to this dispute.” Sysco’s lawsuit aims to secure a court order to set aside the arbitration panel’s ruling, arguing that “Sysco has been forced to litigate against its will against key suppliers who have offered fair and reasonable settlement payments.” Boies Schiller Flexner is also involved in this lawsuit as the original law firm that represented Sysco in the antitrust claims that Burford had funded, with the law firm stating that it “strongly disputes” the allegations made by Sysco in the lawsuit against Burford.