Capital, Certainty and Coverage: Inside the Growth of Litigation Insurance Across Europe

Demand for litigation insurance is growing as claimants, law firms and funders seek greater certainty over adverse costs, capital exposure and portfolio risk. Following CAC’s launch in Europe, we spoke to Nicholas Moore, UK Head of Litigation Insurance and Contingent Risk, about pricing and underwriting trends across jurisdictions, the appeal of Capital Protection Insurance and why London remains the natural centre of the European market.

1. What is driving demand for litigation and contingent risk insurance across the UK and Europe, and which types of disputes or market participants are generating the strongest growth?

Demand is being underpinned by a confluence of factors, including higher-value claims, increasingly sophisticated litigation funding structures, and a growing focus among claimants, law firms and corporates on proactively managing litigation risk. Key market participants include litigation funders, claimant-side law firms, corporates with material contingent assets or liabilities, and investors seeking more predictable, risk-adjusted returns from litigation-related investments.

2. How is the adverse costs risk landscape changing across Europe, and what new uncertainties does this create for claimants, law firms and litigation funders operating across multiple jurisdictions?

Adverse costs risk is becoming more complex because European jurisdictions do not treat cost-shifting in the same way. That creates uncertainty for claimants, law firms and funders running cross-border strategies, because a structure that is efficient in one jurisdiction may be inadequate or expensive in another. As a result, parties increasingly need jurisdiction-specific solutions and cannot assume that a UK-style ATE solution will translate consistently across Europe.

3. How do litigation insurance pricing, coverage terms and underwriting requirements vary between European jurisdictions, and how is the cost of protection evolving as the market matures?

Pricing and terms are highly transaction-specific and shaped by a range of underwriting, legal and commercial considerations. These include underwriting appetite for a specific jurisdiction, case merit, budget, counterparty profile and enforcement prospects. More mature markets, such as England and Wales, typically benefit from deeper insurance capacity, greater pricing predictability and more standardised policy structures.

4. CAC has placed more than $6.5 billion in litigation and contingent risk insurance. How has insurers’ appetite for litigation risk changed, and what distinguishes a risk that attracts strong underwriting interest from one that remains difficult to insure?

Insurers’ appetite has grown materially as the market has developed better data, specialist underwriting talent and a clearer understanding of how litigation risk can be modelled. The risks that attract the strongest interest are those with experienced counsel, credible budgets, clear legal merits, solvent opponents, realistic damages analysis and well-aligned funding structures. Difficult risks tend to involve binary or novel legal issues, weak documentation, disproportionate budgets or even a mismatch between the insured’s expectations and the risk an insurer is willing to assume.

5. Capital Protection Insurance is attracting growing attention from law firms, funders and their investors. How does CPI work, and what risks can it address that are not covered by traditional after-the-event insurance or portfolio diversification?

Capital Protection Insurance is designed to protect deployed litigation capital, typically responding where insured cases or portfolios fail to achieve a specified outcome within an expected timeframe. Unlike traditional ATE insurance, which primarily addresses adverse costs exposure, CPI can protect a funder, law firm, or investor against the loss of its own invested capital. It addresses merits risk and timing risk in a way that portfolio diversification alone may not.

6. How can CPI affect the economics of a litigation funding portfolio, including capital deployment, downside protection and the ability to attract institutional investment?

CPI can materially change portfolio economics by reducing the risk of principal impairment and giving funders greater confidence to deploy capital into high-conviction matters. That downside protection can improve risk-adjusted returns, support leverage or borrowing arrangements, and make a portfolio more attractive to institutional investors seeking clearer capital preservation features.

7. You have worked within both the insurance and litigation funding markets. Where do funders and insurers still misunderstand one another, and what would allow the two markets to work together more effectively?

The markets already operate together effectively. However, outside those insurance markets that currently understand and underwrite contingent and litigation risks, there remains a perception within the wider insurance industry that funders take highly speculative positions and then look to insurers to absorb the downside. That perception is misplaced. Legal asset investors typically make informed investment decisions grounded in extensive diligence, rigorous risk assessment, and disciplined financial criteria.

8. Why does London remain Europe’s most attractive market for litigation insurers, and what made it the natural base for CAC’s European expansion?

London remains the most attractive European market because it combines a sophisticated disputes ecosystem, deep insurance capacity, experienced brokers and underwriters, and a mature understanding of litigation and contingent risk solutions. It is also a natural hub for cross-border litigation, making it a natural platform from which to serve both UK and European clients. For CAC, London offers the right combination of client demand, insurer relationships and specialist talent to build a European practice that connects seamlessly with our existing contingent risk platform.