Litigation funding giant forecasts hefty loss

Burford Capital has today forecast a net loss of $70m-$80m for 2021, blaming in part ’slow case progress’ arising from court delays caused by the Covid crisis. However, in a trading update the listed litigation funder disclosed a strong pipeline of new business, stressing that no new client has pulled out of a case as a result of time-lags.

On a group-wide basis, Burford made $1.1bn in total new commitments and deployed $841m in cash in 2021. Those levels represent ’significant increases over the prior year’ - 48% and 41% respectively - and ’demonstrate that the strong recovery in new business activity in the first half of 2021 continued through the second half’, the company said.

Case realisations in Burford’s capital provision-direct portfolio remained modest in the second half of 2021, ‘due in part to continuing court delays caused by the pandemic impacting the pace and progression of matters in our portfolio’. But realised losses for the full year totalled just $9m, the company stressed, adding: ‘Our portfolio remains robust, and resolutions are simply a matter of timing subject to the idiosyncrasies of our specific cases and the vagaries of the litigation process.’

CEO Christopher Bogart said: ‘We are delighted with the strong performance of new business in 2021. To write more than $1.1bn of new commitments during an ongoing pandemic is a significant achievement and positions the business well for future potential income.

‘We would have preferred cases to move through the judicial system faster than they have since the pandemic began, but the slow pace we are experiencing is a timing issue, not one affecting our view of the ultimate realisable value of the portfolio. No client has discontinued a single matter due to these delays.’