19 March 2015Print This Post

Burford’s profits rise by 43%

Chris Bogart

Bogart: Cost of commercial litigation in the UK “continuing to rise”

Burford Capital, the world’s largest litigation funder, increased operating profits by 43% to $61m (£41m) in 2014.

Announcing its financial results for the last calendar year, Burford said income for the year increased by 35% to $83m.

The funder said “robust demand” for its capital was reflected in $150m of new investment commitments for 2014 – more than three times the level in 2013.

Burford’s after-the-event insurance business contributed $19m to the profit figure, while income grew 16% despite a previous expectation that it would fall. The acquisition purchase price was recovered “long ago”.

Chris Bogart, chief executive of Burford Capital, said the majority of the firm’s investments were in America, but a “significant minority” were in the UK and Europe.

According to the AIM-listed company’s report to shareholders, average investment size, excluding UK matters and new initiatives, is currently $8m. This compares to $4m when the company started in 2009.

However, Mr Bogart said only 37% of Burford’s portfolio involved single cases, rather than multi-case portfolios and complex actions.

“There remains a strong tendency, especially in the UK market to regard litigation funding as the funding of a single case only,” Mr Bogart said. “The release of these numbers is a clarion call for London to catch up.”

Mr Bogart said his concern about commercial litigation in the UK was the cost, which was “high and continuing to rise”.

He went on: “Court fees are a symptom of that, though they still represent only a small percentage of the costs involved in bringing an action. It is becoming increasingly difficult to justify litigating in the UK.”

Mr Bogart predicted that foreign jurisdictions and arbitration would benefit as a result.

Burford said it completed a successful issue of retail bonds on the London Stock Exchange last year, raising £90m of capital for litigation finance.

Mr Bogart added: “I am very excited by the uptake of capital from the legal profession and looking forward to this continuing in 2015.”

Burford announced its acquisition of business intelligence firm Focus Intelligence in January. Last month it launched a funding option for claimants with cases valued between £25,000 and £500,000, aimed particularly at disbursements. Known as ‘Sprint’, it is marketed and administered exclusively by broker TheJudge.

By Nick Hilborne

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