Currently, Burford is serving as the litigation funder in Quinn Emanuel’s class action against AMP following heavy criticism of the financial giant in the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.

The move marks a first for Burford Capital, with it being the first Australian class action it has been a part of. Speaking to that, Mr Arnott explained that the provider is hesitant to get involved in every class action out there, instead taking a careful and productive approach to this area of litigation.

“…As you can imagine you get indebted by requests [to back class actions] every day of the week for shareholder matters especially,” Mr Arnott said.

“We haven’t done any of them, largely because there’s always a question mark about it. It’s a question about the law firms who bring it to you as well. Nothing was sounding right to us. Class actions is the peculiarity for us so [we only take one on] if it’s something that is a very clear fit.

“AMP, because of the evidence they’d given in the royal commission, seemed to fit that bill for us.”

Responding to the influx in class actions, Mr Arnott said:

“This was one of the reasons that put us off coming into Australia, because there was a bit of a race to the bottom and this has fed the criticism of the industry,” he said.

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“You get people piling in, some of them have no backing at all almost, and they’re just looking for any old thing to run up to court and tell some investors that they’ve got an investment and to be honest it gives a very bad name to the industry, we think.

“[This was] one of the reasons [why] we support a lot of the thrust of the ALRC’s recommendations because the market will need a bit of a reconfiguration I think and, to be honest, one of our points to the inquiry as well is that it’s generally better to let the market take its course with these things. Normally, the market will sort itself out which is why we to the commission ‘if you're going to make any recommendations they should be as light-touch as possible’.”

Commenting further on the ALRC’s Inquiry, Mr Arnott addressed the question of whether there needs to be more regulation on litigation funders.

“When the industry first started there were a lot of small players. Most of them don't exist anymore. What has happened in Australia, because people have seen class actions be successful, and partly because of our own success, people are thinking ‘oh ok, this is all taking off again’ so you’re getting the same wave of a lot of people coming in who are not sufficiently capitalised. A lot of them won’t last. Who knows how many? I don’t know exactly, but a lot of them won’t last,” he said.

“And in fact, what we see is other funders bringing us matters, either halfway through the matter or something happens that they don't like in the proceedings and they come and try to on-sell it to us. We almost never take it on but we see that a lot. We see the pain at one end of the market, sometimes they stop paying goods and it can be quite disastrous.

“Again, the market itself will sort a lot of that out, but of course you can understand that the commission says ‘this is a legitimate area for us to have a look at’. It’s just we think they should be as light-touch as possible.”