What the Repricing of Judgment Preservation Insurance Means for Post-Trial Risk
Appellate monetisation was a familiar feature of the litigation finance market in the late 2010s. A claimant won at trial, the defendant appealed and a funder advanced capital against the judgment in exchange for a share of the eventual recovery. The claimant obtained liquidity. The funder took the appellate risk.
In the early 2020s, judgment preservation insurance competed with, and in some high-value cases appeared to displace, that model. Carriers offered bespoke policies designed to preserve part of a trial award against appellate reversal. That shift has now partly reversed for the largest single-judgment risks. The better view is not that JPI has vanished, but that capacity has retrenched sharply, pricing has hardened and appellate monetisation has re-emerged where insurance has become unavailable or uneconomic.
The distinction matters. JPI preserves value through insurance against appellate loss. Appellate monetisation sells or finances part of the judgment’s expected value, leaving the funder rather than the insurer to carry the appellate risk.
Three Reversals That Repriced the JPI Market
Three reversals explain much of the visible repricing.
In December 2023, the Federal Circuit undid the roughly USD 2.2 billion VLSI Technology LLC v Intel Corporation patent judgment: it reversed the finding on one patent, vacated the damages award on the other and remanded for further proceedings.1 Market reporting and later academic commentary indicated that the judgment had reportedly been insured for about USD 300 million, although the policy itself was never publicly disclosed. In April 2024, the Fifth Circuit reversed the approximately USD 1.6 billion judgment in BMC Software Inc. v IBM.2 Bloomberg Law later reported total JPI coverage of between USD 500 million and USD 750 million, with Liberty Mutual exposed for about USD 100 million to USD 150 million and backing out of at least two prospective deals after the reversal.3 The Supreme Court denied certiorari in March 2025, making the loss final. In England, the Court of Appeal reversed the Comet liquidation preference judgment in Darty Holdings SAS v Carton-Kelly. That litigation had already generated a first-instance payment-out application involving GBP 35 million said to be insured under a JPI policy.4
Three large appellate reversals in under eighteen months exposed the severity risk embedded in single-judgment JPI. The market was not yet mature enough to price that concentration of risk with confidence. Carriers lacked deep historical loss data for actuarial analysis and underwriting assumptions rested heavily on historically low civil appellate reversal rates. That assumption proved fragile where it mattered most: at the high end of the coverage spectrum, where individual policies could insure tens or hundreds of millions of dollars against a single appellate event.
Carrier Retrenchment After BMC
Liberty Mutual’s response to the BMC Software reversal was immediate. It withdrew from several pending JPI deals and paused quoting for new active litigation liability. Market reporting and broker commentary suggested that other transactional-liability carriers also tightened appetite. The market did not disappear overnight, but the availability of policies above USD 100 million contracted sharply. Pricing hardened. Underwriting criteria tightened. For plaintiffs holding large trial verdicts, JPI became either unavailable or prohibitively expensive. The product that had competed with appellate monetisation had to confront the reality that large appellate reversals, while infrequent, can produce catastrophic losses for insurers.
Burford Capital and the YPF Judgment
The largest illustration of post-judgment risk arrived on 27 March 2026. The Second Circuit reversed the approximately USD 16 billion judgment against Argentina in the YPF expropriation litigation.5 Burford Capital announced the reversal that day and stated that the decision would require a significant non-cash write-down, while adding that viable treaty-arbitration claims likely remained and would probably be brought before ICSID. By May 2026, Burford had recorded a USD 2.4 billion asset drop linked to the YPF reversal. Burford shares fell by more than 40% in the immediate aftermath.
The YPF case was not a JPI loss. It was a direct funder loss on a post-judgment asset. But it reinforces the same point. Post-trial risk is real and can reprice discontinuously. A verdict of any size can move sharply between face value, reduced value, remand value and no value depending on the appellate outcome. The YPF reversal is one of the largest single-event valuation shocks in the history of listed litigation finance.
Claim Monetisation and the Appellate Revival
Westfleet Advisors’ 2024 market report recorded that monetisation deals accounted for 26% of new capital commitments, up from 21% in 2023.6 Single-matter monetisation deals averaged USD 6.6 million. Portfolio monetisation deals averaged USD 16.5 million. This shift occurred against a background of overall market contraction. Total new commitments in US commercial litigation finance fell 16% year-on-year to USD 2.3 billion, the second consecutive annual decline.7 The monetisation segment grew its share while the overall market shrank. Westfleet’s category is broader than appellate monetisation, but the direction is consistent with the same market movement: capital is being deployed to extract value from existing legal assets rather than only to fund new claims. Industry sources report a further acceleration of appellate monetisation inquiries through 2025.8
The economics are distinct from pre-judgment funding. A plaintiff who has already won at trial holds a judgment. The factual record is fixed. The legal issues on appeal are defined. The funder’s risk assessment focuses on a narrower set of variables: the strength of the trial court’s reasoning, the composition of the appellate panel, the circuit’s reversal rate and the probable timeline. Market participants often price appellate monetisation at a materially lower return than pre-filing or pre-trial investment, reflecting the narrower risk set.
The Nuclear Verdict Pipeline
The demand side of the appellate monetisation market is driven by the continuing escalation of trial verdicts. In 2024, nuclear verdicts rose 52%, with 135 cases producing awards totalling USD 31.3 billion.9 The median verdict reached USD 51 million, up from USD 44 million the previous year. Five verdicts crossed the USD 1 billion threshold. Awards of that magnitude almost invariably produce appellate activity. Defendants appeal to preserve their financial position. Plaintiffs holding verdicts of USD 50 million or more face years of appellate uncertainty before realising any recovery. The gap between verdict and collection is where appellate monetisation operates.
Swiss Re’s analysis quantified the broader trend: US liability claim severity increased 57% over the past decade, with commercial casualty losses reaching USD 143 billion in 2023.10 That figure exceeded total insured losses from global natural catastrophes in the same year. Social inflation is commonly attributed to shifting jury attitudes, expanding theories of liability and higher-cost litigation dynamics, including the ability of some claims to proceed further rather than settle early. Each outsized verdict that survives appeal validates the trend. Each reversal reinforces the need for risk transfer mechanisms.
What Replaces JPI
The answer, for now, is the product that JPI replaced. Appellate monetisation returns because the insurance alternative has been repriced out of reach for the cases that need it most. Carriers may re-enter the JPI market once they have adjusted their actuarial models and their appetite for high-severity, low-frequency risk. That will take time. In the interim, funders are likely to remain the principal specialist source of post-judgment liquidity for plaintiffs unwilling or unable to wait three to five years for an appellate resolution.
The cycle has a logic to it. Insurance products enter a new market, price risk on limited data, suffer losses and then reset appetite. The original risk-bearing mechanism, in this case the litigation funder taking a direct position on the judgment, reasserts itself. Whether JPI returns as a mature product or remains a cautionary episode in the history of specialty insurance depends on whether the next generation of policies can be priced to reflect what three appellate reversals in eighteen months made impossible to ignore.
Notes
1. VLSI Technology LLC v. Intel Corporation, No. 22-1906 (Fed. Cir. 2023). The Federal Circuit reversed the finding on one patent, vacated the damages award on the other and remanded for further proceedings in December 2023, undoing the roughly USD 2.2 billion judgment. Market reporting indicated the judgment had reportedly been insured for about USD 300 million; the policy was never publicly disclosed.
2. BMC Software Inc. v. International Business Machines Corporation, No. 22-20463 (5th Cir. 2024). The Fifth Circuit reversed the district court’s judgment of approximately USD 1.6 billion (comprising USD 718 million in licence fees, USD 718 million in punitive damages and USD 168 million in pre-judgment interest) on 30 April 2024.
3. Bloomberg Law reported total JPI coverage on the BMC judgment of between USD 500 million and USD 750 million, with Liberty Mutual exposed for about USD 100 million to USD 150 million. Liberty backed out of at least two prospective litigation-insurance deals after the reversal.
4. Darty Holdings SAS v Carton-Kelly [2023] EWCA Civ 1135, reversing [2022] EWHC 2873 (Ch). The first-instance judgment was approximately GBP 115 million. A payment-out application involved GBP 35 million said to be insured under a JPI policy.
5. Petersen Energia Inversora S.A.U. v. Argentine Republic, No. 22-cv-2985 (2d Cir. 2026). The Second Circuit reversed the approximately USD 16 billion judgment on 27 March 2026. Burford Capital stated that the decision would require a significant non-cash write-down and that treaty-arbitration claims would probably be brought before ICSID. By May 2026, Burford had recorded a USD 2.4 billion asset drop linked to the reversal. Burford shares fell more than 40%.
6. Westfleet Advisors, 2024 Litigation Finance Market Report. Monetisation deals accounted for 26% of new commitments in 2024, up from 21% in 2023. Single-matter deals averaged USD 6.6 million; portfolio deals averaged USD 16.5 million.
7. Westfleet Advisors, 2024 Report. USD 2.3 billion committed in US commercial litigation finance in 2024, a 16% year-on-year decline. Second consecutive year of contraction.
8. GLS Capital, ‘2026 Litigation Funding Trends’ (2026). Reports a significant increase in appellate monetisation inquiries through 2025 driven by the contraction of JPI market availability.
9. Marathon Strategies, ‘Corporate Verdicts Go Thermonuclear: 2025 Edition’ (2025). 135 nuclear verdicts totalling USD 31.3 billion in 2024. Median verdict: USD 51 million. Five verdicts exceeded USD 1 billion. Available at: https://marathonstrategies.com/report/corporate-verdicts-go-thermonuclear-2025-edition/
10. Swiss Re Institute, Social Inflation Index Analysis (September 2024). US liability claim severity increased 57% over the past decade. US commercial casualty losses reached USD 143 billion in 2023.
References
Case Law
BMC Software Inc. v International Business Machines Corporation, No. 22-20463 (5th Cir. 2024). Judgment reversed 30 April 2024.
VLSI Technology LLC v Intel Corporation, No. 22-1906 (Fed. Cir. 2023). USD 2.2 billion patent judgment undone December 2023. Available at: https://www.cafc.uscourts.gov/opinions-orders/22-1906.OPINION.12-4-2023_2231550.pdf
Darty Holdings SAS v Carton-Kelly [2023] EWCA Civ 1135, reversing [2022] EWHC 2873 (Ch). First-instance judgment approximately GBP 115 million.
Petersen Energia Inversora S.A.U. v Argentine Republic, No. 22-cv-2985 (2d Cir. 2026). USD 16 billion judgment reversed 27 March 2026.
Industry Reports
Westfleet Advisors, 2024 Litigation Finance Market Report (2024).
GLS Capital, ‘2026 Litigation Funding Trends’ (2026).
Marathon Strategies, ‘Corporate Verdicts Go Thermonuclear: 2025 Edition’ (2025). Available at: https://marathonstrategies.com/report/corporate-verdicts-go-thermonuclear-2025-edition/
Swiss Re Institute, ‘Social Inflation: Litigation Costs Drive Claims Inflation’, Sigma No. 4/2024 (September 2024). Available at: https://www.swissre.com/institute/research/sigma-research/sigma-2024-04-social-inflation.html
Commentary
Bloomberg Law, ‘Liberty Insurers Take Hit on $1.6 Billion IBM Judgment Policy’ (2024). Available at: https://news.bloomberglaw.com/business-and-practice/liberty-insurers-take-hit-on-1-6-billion-ibm-judgment-policy
Bloomberg Law, ‘Burford Says YPF Court Loss Caused $2.4 Billion Asset Drop’ (May 2026). Available at: https://news.bloomberglaw.com/business-and-practice/burford-says-ypf-court-loss-caused-2-4-billion-asset-drop
Reuters, ‘US Supreme Court upholds IBM win in $1.6 bln software contract case’ (10 March 2025). Available at: https://www.reuters.com/legal/government/us-supreme-court-upholds-ibm-win-16-bln-software-contract-case-2025-03-10/
Reuters, ‘US appeals court voids $16.1 billion judgment against Argentina over YPF seizure’ (27 March 2026). Available at: https://www.reuters.com/world/us-appeals-court-voids-161-billion-judgment-against-argentina-over-ypf-seizure-2026-03-27/
Raben, A., ‘Judgment Preservation Insurance: A New Frontier for Post-Trial Risk Management’, SSRN Working Paper (2024). Available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4712268
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