Burford CEO: Jackson reforms contribute to big increase in profits

Chris Bogart

Bogart: “Very significant” growth expected in UK

The Jackson reforms are part of the reason for an increase of 89% in Burford Capital’s half-year profits, the global litigation funder’s chief executive said last week.

“The Jackson reforms have clearly raised the profile of litigation funding in the UK, resulting in increased volumes of investments and enquiries,” Christopher Bogart told Litigation Futures.

“We expect to see very significant continuing growth in the UK, US and other countries. Clients are looking to alternatives to paying hourly fees for litigation.”

Mr Bogart said that since it opened for business in 2009, Burford had made 65 litigation funding investments worth over £260m. He said these investments included both single cases and portfolios of cases.

In its financial results for the half-year ending on 30 June 2014, Burford reported an increase in profits from £6m to £11.2m.

Its income for the six months was £17m, a 40% increase on the previous half year, with 85% coming from “the litigation portfolio amid continuing increases in activity levels”.

Strong demand for funding was reflected in the £38m of new capital invested in the first half of this year, five times the amount invested in the first half of last year.

Mr Bogart said the biggest obstacle Burford faced in funding smaller cases in the UK was the cost of litigation. He revealed that Burford’s smallest investment in the UK was less than £200,000, but this did not involve covering all the fees and expenses.

Instead it was a question of “helping lawyers and clients bridge a gap that had opened”, whether that meant paying for counsel, funding experts’ fees or helping a previously self-financing client.

Burford said its after-the-event insurance business remained steady, contributing £4.6m of the profit. It said that “while still small compared to historical levels, we are seeing increasing demand for coverage as 2014 develops”.

The financial report continued: “It remains too early to tell what even the medium -term future holds, and we will continue to watch, wait and write sensible business. We are declining to follow some of our competitors, who in their attempt to retain volume are reducing prices and writing new policies at premium levels we consider inevitably loss-making.”

Burford Capital announced in July that it had raised almost £90m from a bond issue, pushing the third-party funder’s asset base beyond the half-billion US dollar mark. It raised the money by issuing bonds on the main market of the London Stock Exchange.

Meanwhile, litigation funder Vannin has announced the appointment of former High Court judge Sir Stephen Silber as chairman of its investment committee.

Sir Stephen, who retired earlier this year after 15 years as a High Court judge, said: “The portfolio of funded cases is already impressive, and I look forward to working together with the team to build a further pipeline of successful cases.”

He is joined by international arbitration expert Bernard Hanotiau, professor at the law school of Louvain University, Belgium. Paul Morris, consultant senior counsel at offshore legal services provider Appleby, has been appointed to the group’s board as non-executive director.


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