A leading litigation funder has predicted that Britain’s protracted exit from the European Union will be a fillip for the industry.
Burford Capital, a listed company with offices in London and New York, said the company had already benefited from the impact of the Brexit vote.
The company’s annual report said demand for legal services tends to flourish during periods of uncertainty for business and Brexit is likely to lead to more litigation.
‘Substantively, Brexit will give rise to significant uncertainty for businesses, and demand for legal services tends to flourish during periods of uncertainty, boosting our business collaterally,’ said Burford.
‘A further substantive positive is that the decline in the value of Sterling makes UK courts and arbitral institutions (and the UK lawyers who practise in them) somewhat more economically competitive globally, which we would expect to be good for our business.’
Burford said the first year of 2016 ‘broke the mould’ as it featured more settlements reached before summer.
But the company confirmed it will cease to write new after-the-event insurance business from the end of this year after finding decreasing demand in the UK.
Burford had entered the ATE market in 2012 with the acquisition of FirstAssist but to continue would require ‘significant investment in technology and systems’.
The report added: ‘Once the Jackson reforms were implemented in 2013, premiums were no longer recoverable and demand for the insurance product fell sharply, as we expected, and it has never recovered.’
For the first six months of 2016, Burford Capital posted an 88% increase in total income, from $40m (£30.5m) last year to $76m (£58m) this year.
Profit before tax rose from $23.7m (£18m) in the first half of 2015 to $55.8m (£42.5m) in the first six months of 2016.