When a foreign mining company sued Greenland in 2022, the government’s lead lawyer thought he was prepared. Paw Fruerlund had handled similar cases before, and he believed the law and facts were on his side.

When he arrived at one of the first hearings, however, Fruerlund stared across the table at 12 corporate lawyers from two firms representing his opponent, an Australian company called Greenland Minerals. There were so many, they spilled across two rows of seating, Fruerlund recalled. He fretted that his own three-person team, now greatly outmatched, might strain the budget of Greenland, a semi-autonomous nation of mostly Indigenous Inuit people.

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Litigation finance is a multi-billion dollar sector devoted to funding lawsuits and corporate legal departments. In an arbitration case like Greenland Minerals’, these “third-party funders” generally agree to take a 20 to 50 percent cut of any award or settlement in exchange for assuming legal costs. If the company loses the case, the funder gets nothing. But the best funders report win or settlement rates of 75 percent or higher across the various forms of litigation they finance.

Companies like Burford have been betting on cases like Greenland Minerals’, where foreign investors sue governments before ad-hoc panels of arbitrators, since the 2000s. The arbitrations are part of a system known as investor-state dispute settlement, or ISDS, which is built into thousands of international investment agreements and contracts that give foreign businesses formidable rights.