Case studies are rare in legal finance due to the confidential nature of transactions, but they are particularly helpful to in-house lawyers as they consider how legal finance could benefit their businesses. Burford's financing of several health insurers in the risk corridors litigation is a rare public example.

The Background of the Risk Corridors Litigation

The "risk corridors program" was created under the U.S. Affordable Care Act (ACA), often called "Obamacare." To incentivize health insurers to participate in state health exchanges where potentially higher-risk individuals could buy standardized health insurance regardless of preexisting conditions, the ACA risk corridors program provided assurance that the U.S. government would repay insurers if their expenses exceeded a threshold; conversely, if an insurer's revenues exceeded that threshold, the insurer would pay a portion to the government.