Burford Capital’s annual report has predicted that the litigation industry will enjoy fresh strength in the wake of Britain’s vote to leave the EU. ‘Substantively, Brexit will give rise to significant uncertainty for businesses, and demand for legal services tends to flourish during periods of business uncertainty, boosting our business collaterally,’ predicts the report. On Wednesday, Burford announced pre-tax first half profits of £42.5m – more than double the £18m reported for the same period last year. Meanwhile, total income for the half was up 88 per cent year-on-year from £40m in the first six months of 2015 to £76m this year.

Currency impact

Burford Capital, which has offices in both London and New York, has also benefited from the impact of the Brexit referendum outcome on the British pound. While the majority of the firm’s assets are in US dollars, the bulk of its debt is denominated in pounds sterling. According to Burford chief executive Christopher Bogart, the pound’s decline relative to the dollar has already reduced the principal owed on a $131m bond it issued in April by around $43m, saving Burford around $2.4m in annual bond payments. ‘[The] decline in the value of Sterling makes UK courts and arbitral centres (and the UK lawyers who practice in them) somewhat more economically competitive globally, which we would expect to be good for our business,’ the annual report adds.

Sources: Law Gazette; American Lawyer