Burford Capital looks to benefit from economic fallout of Covid-19

(Sharecast News) - Burford Capital said the widespread economic upheaval caused by the Covid-19 outbreak was likely to create "significant" new business opportunities going forward.
The finance and investment management firm, which specialises in funding litigation, said progress in some existing legal cases may be hindered by the outbreak. It also warned that in the short term, new business would "inevitably slow".

But it said that over the longer term, "economic disruption tends to generate litigation and thus potentially significant levels of new opportunities for Burford".

It continued: "We are cognisant that the Covid-19 pandemic is greatly disrupting the global economy as well as people's lives, and remain sensitive to that fact.

"Nonetheless, looking out at the longer term, just as the global financial crisis of 2008-09 was followed by a large amount of litigation, Burford expects that the current global crisis, and what is likely to be a time of economic pressure, will result in a significant increase in the volume of large dollar litigation and arbitration matters in which Burford specialises."

Burford said it was in a "strong" liquidity position, which enabled it to meet the needs of its current commitments as well as operating expenses. However, results for the year to 31 December have been delayed because of logistic issues caused by remote working at its auditors Ernst & Young.

Christopher Bogart, chief executive, said: "All of us are having to adjust to a new reality with Covid-19, just as the courts are, and while near-term delays will certainly occur in our business as well as in our financial reporting, we have a great deal of optimism about what the future holds as businesses face an environment that is both dispute-heavy and liquidity-constrained."

Burford said that one of its employees had caught Covid-19, as had the child of another staff member. But it said there were no indications of widespread illness among employees. Its offices have now been closed for more than two weeks and will remain shut until further notice.

The UK's courts are currently open to receive new filings and hear existing cases, and continue to issue decisions, although hearings are usually held via video-conferencing. On Wednesday, the UK Supreme Court delivered its verdict via live-stream after ruling that Wm Morrison could not be held responsible for a data breach.

Jury trials have, however, been suspended.