Disclaimer: This interview is for informational purposes only and should not be relied upon as a basis for investment decisions. In Practise is an independent publisher and all opinions expressed by guests are solely their own opinions and do not reflect the opinion of In Practise.

{audio:0:00:01} Can we discuss how you've seen the market change over the last 18 months? 

{audio:0:00:13} First off, there is a lot more capital in the market, so there are more players and competition for funders. That doesn't mean there are more opportunities. I think there are the same amount of opportunities. You'll hear people talk about anticipation of up-ticket insolvencies given the global situation this year, both physical and economical. For example, living crisis, war in Ukraine, pandemic. 

{audio:0:00:43} Interestingly off the back of it, Laura Keunssberg did a look-back piece on the BBC; she spoke to commerce and made a very good point in that we haven't completely sorted out the global financial crisis, but the central banks have done their job and have stepped in and frozen things. Then, of course, we have the pandemic. I think the fear on that side is there's an unabated economic storm coming, and therein lies some opportunity. That would perhaps be the analysis that the insolvency practitioners and, therefore, funders would look at it and see as an opportunity. Does that mean that there's less competition? No. The competition is continuing, particularly as unallocated investment capital looks for uncorrelated asset classes.

{audio:0:01:43} Which part of the market do you see most or less competition? Case type or size of case?

{audio:0:01:50} To be honest, any good case is competitive, and that will come down to whom you know, whom the lawyers want to work with, and whom the claimants want to work with. In terms of specific types of cases, group actions have been really popular, and they're keenly contested because they're seen as good opportunities. However, the Lloyd and Google decision changed the view of GDPR cases, those data breach cases. The large insolvencies are always interesting, and I think you'll see that the estate of Carillion has got a claim against a claim against its auditor. I know that had a good competitive tendering process in the market. 

{audio:0:02:49} Take the Carillion case, for example, it depends on whom the claimant wants to work with and the law firm. How do you look at the incentives of both in that case, for example?

{audio:0:03:01} That's a good example. You've got an insolvency practitioner and their primary the duty is to act in the best interest of the creditors, to get as much money as possible. Using funding, they've got to get the best terms they can with the funds they think are most likely to support them. That then interleaves with what the lawyers want. The lawyers are probably more concerned about how much control a funder will want. That varies from whether the funder wants to look at everything the lawyers do, which would be annoying for them and operationally encumbering. Or is it, as most funders I suspect would want, a monthly report and the ability to discuss any developments coming out of that monthly report, which is fairly market standard, the second level.

{audio:0:03:58} How much control or influence does the funder typically have?

{audio:0:04:07} It's a moot point. You can pull the purse strings, so you have lots of control on one level. And there are two angles to that. One is, does the funder want control? Operationally, a case manager and a funder may have between five and fifteen cases in their portfolio. That's a lot of work, and if you compare that to a legal practitioner in private practice, I would imagine if they're handling more than three cases at the same time, that's a cause for concern. That's a heavy workload because there's a timetable of the litigation procedure, and you have no control over how that works. 

{audio:0:04:52} You can make a best guess, but if you get it wrong and end up in disclosure across your whole in-tray, that's tricky on three cases. If you have five or more, that's tricky by a similar factor in the increase. Generally speaking, it's an investment. I approach it because I'm an investment manager; I'm not there to lawyer things. Being a lawyer helps understand the asset class and understand the language and the demeanor, but I am not being paid for the legal team’s briefings and correspondence, for instance.

{audio:0:05:37} You mentioned who wins the case depends on the claimant and the law firms choosing a funder. How much do you look at the legal expertise of the funder and the value of that given that supposedly they're not supposed to have a say in strategy?

{audio:0:06:00} That's a very good point. On one level, a funder has to demonstrate a good understanding of the law in overview. You need to understand what an unlawful means conspiracy claim requires, for instance, what the strategy is, where the pressure points may be for the claimant and the claim, and clearly where the pressure points and vulnerabilities may be for the defendant. Otherwise, for the legal team, they almost try and teach you as they go along, so you can understand what they're saying, and that's not helpful. That’s how a funder should interleave with a lawyer. 

{audio:0:06:43} On the claimant side, it's like everything else; it's a simple case of trust. Funding is not cheap; they arguably are making a reasonable sacrifice of the potential upside, but at the same time funder is taking a risk. Actually, in the whole equation, the funder takes a material risk by putting capital into it, so there has to be that trust. That sounds like a trite thing, but I think it’s worth saying. 

{audio:0:07:13} How do you compare the legal expertise of teams like Burford versus Harbour, for example?

{audio:0:07:21} That's a really difficult one to answer. We have no sight of how each of us works in detail. I would say they're broadly similar across the whole space. The change is coming with credit funds; big credit funds with lots of assets under management are looking to play in the space. They approach it from the modeling and spreadsheet approach, which has merit, but they're not able to overlay that into how litigation develops, progresses, and unfolds. Even though big investment funds will come in, there'll be a question of whether they can deal directly with a lawyer, and they're probably almost better dealing with a claimant. The issue will be whether they understand what's going on. As you monitor its progress, for instance, interlocutory applications on a case, lawyers will understand that. I'm a corporate lawyer; I'm not a litigator; I understand it; I understand what the defense will do. Someone without that background may not. To come back to your point of how do we stack up? I think we're all broadly similar. If you look at the personnel in the funders, pretty much all of them have a legal background of one sort or another.

{audio:0:08:56} One thing I found interesting was that Burford now claims that the average case they fund is upwards of $20 million, which seems pretty high to me.

{audio:0:09:08} What was the average at Harbour?  

{audio:0:09:18} When they say $20 million, is that the amount they're committing, or is that the size of the quantum? 

{audio:0:09:26} That’s the amount they’re committing.

{audio:0:09:31} That would make sense. Burford was a different model from Harbour, and other funders are structured differently as well. The standard one is the private equity offshore GP/LP structure. Burford is listed, and of course, they have issues around that. They're now listed in the States. They each have different pressures because I think with Burford as well, they're finding that it's as much work to deploy $2 million as it is to deploy $20 million. The risks are much higher. You put $20 million at work for three years, and the duration risk is quite long. The maxim the bigger they are, the harder they fall stands true in my view. If you're defending a $100 million claim, you will fight that harder than 10.

{audio:0:10:54} How do you get access to those $20 million cases?

{audio:0:11:00} Good question. I think a lot of it has to do with legal teams knowing whom they want to go to with something of that size. For instance, in multijurisdictional asset recovery or judgment enforcement, you probably wouldn't come to me for state arbitration if you were to find my name somewhere alongside Burford. If Burford says their standard ticket size is now 15 to 20 million, that sounds like state arbitration, which has a duration risk because I've never seen state arbitration resolve in less than seven years.

{audio:0:11:43} For example, the YPF case they have, eight or nine years in the making?

{audio:0:11:48} Yes, that's a long time and of course, if you're a private equity fund, you're probably closed-ended. Maximum's probably a five-year duration.

{audio:0:12:06} What pressures do you find the Harbour structure or the PE offshore LP structure face, for example, in relation to Burford’s balance sheet?

{audio:0:12:15} I think broadly they’re the same; everyone faces deployment pressure. Investors want the money at work because once that capital is committed, they can't use it for something else. If they don't see it being deployed or used, they're right to ask questions. Once it's committed, it very quickly turns to when is it coming back. I don't think the pressures are different if I'm honest. I think they manifest slightly differently, mainly because of that duration risk point I talked about. I think also it depends on what sort of things you're doing. State arbitrations is a long haul. Lots of jurisdiction asset recovery can be hard work as well. It can take a while, and of course, things like the pandemic and lockdowns have made people question how long it is to get through the litigation process. 

{audio:0:13:23} This is the big question; the duration of these assets and the return on that, and what drives the IRR for these investments.

{audio:0:13:31} And they are illiquid, let’s be clear. It’s a binary accum asset. Credit funds are going to struggle coming into the market directly, simply because they're used to dealing with, let's say, a distressed asset, like a factory that produces something. In your business model, you can say, okay, we can probably wear only getting 80% of our capital back over a two-year period. It's a loss, but it's not an absolute loss. If you lose it or discontinue in a litigation case, you've lost that capital, and there's no way you're getting it back. 

{audio:0:14:09} And you don’t know when.

{audio:0:14:11} Precisely; and you lose control. If a funder were to say, we're not going to continue funding this case, it's a really brave decision because, effectually, they're saying we don't think anything will come out of this anytime. Not even anytime soon, but anytime at all.

{audio:0:14:31} How have you seen credit funds try to enter the market?

{audio:0:14:36} Fortress is probably a good example in some respects in the way that it used to be much more in the shadows; it's now much more in the fore. They were probably the first to move that way. You do hear in the market lots of other funds. They're probably trying to get hold through a medium like this where they want to understand the dynamics and opportunities. Classic SWOT analysis, and again, I think the issue is finding the right personnel to run a desk. 

{audio:0:15:13} You'd think the obvious choice would be let's hire an experienced litigator from a top firm, but the issue is that a litigator is a litigator. They’re not necessarily an investor. I'm slightly different from most because I was a corporate lawyer; I wasn't a litigator. I see it very transactionally. I come at it from the point of view of what we think the chances of recovery are and how long it is to get there. You've got to be clear about defining the win for the asset. Traditionally, lawyers would see the judgment as the win because it is, but you need the cash from a commercial and investment point of view. It's all well and good for a judge to say you're owed $100 million, but that’s just the check, just the promissory note.

{audio:0:16:05} Back to Fortress, they made a big splash entering the market. Where do you see them operating, given their structure? What kind of cases are they doing? 

{audio:0:16:23} I think they're a bit like Burford. Burford and Fortress are playing that game where they want to make big single commitments. I think they've probably got more exposure in North America than in Europe, where there's more appetite. Litigation is bigger. American law firms are more aggressive, and I don't think that's bad. I think what they're trying to do is get into those big set pieces.

{audio:0:16:59} Can Fortress compete there with Burford, in terms of legal expertise?

{audio:0:17:06} Yes, they can. I think they’ve got such good connections. If we were to go to Chicago and New York and look through the lists of law firms there, the big hitters, I think you'd find Fortress and Burford competing directly with each other. Both In terms of single case opportunities but also, I suspect, in providing financial facilities.

{audio:0:17:36} How has Fortress entered relatively quickly? They've been around for a while, but in terms of the history that Burford claims to have and the expertise they claim to have, how does Fortress compete on those big state arb deals?

{audio:0:17:54} I think they've always had the network, to be honest. They've been working quietly in the background. I think they've been marketing in North America for as long as Burford has. I think they were perhaps later to the European market, and of course, you've seen there are many US firms now in London and Europe doing big class actions. I should think if you were able to find out, you would find that Fortress and/or Burford might be responsible for bringing them across. Because they'll say, well, if you want to exploit that market, we'll give you the financial resources.

{audio:0:18:46} How do you think it’s possible for anyone else to enter and compete in these bigger deals with these two?

{audio:0:18:54} That's a good question. I think it's down to personalities and what we talked about earlier; how do people feel about working with you. Let's take, for example, a shareholder class action in any jurisdiction. Let's say you need an opt-in claiming group. You've got to build the book, and get people to sign up as opposed to an opt-out where you go to the court, make an application, get the order saying yes, you will be the guys that run the claim and if you're successful, everyone comes through you for their winnings. 

{audio:0:19:36} On the opt-in models, you would look to get hold of a share of a class action; you would look to get hold of institutional investors. As we all know, institutional investors, much like the credit funds trying to get into the space, will be asking questions of the law firm and the funder because the key thing they are considering and want to understand is the reputational risk. How will this play out when it comes back to them? That's actually where it's quite important how a funder works, their demeanor, how well they fit in with the legal team and with the claimant and manage it. You have to be fairly straightforward, in my view, about how you bridge that. 

{audio:0:20:23} Is it possible for someone to break in and start competing on these $20 million deals with Fortress and Burford?

{audio:0:20:33} Yes; would you see anyone else at that level today that can get them at that size and take that risk?

{audio:0:20:40} Not without having done something somewhere else already; not without having some understanding. There are more and more US funders coming into the London market. The bit that they don't understand is the adverse cost risk because the adverse cost is rarely rewarded in the US. In this jurisdiction, it's quite common, and it's quite high. It goes back to the point about when it's a binary outcome, which if you lose and you haven't thought it through, not only do you lose your capital of the funding, you could be on the hook for the adverse costs unless you've figured out a way to back that risk up with ATE, for example.

{audio:0:21:27} One of the big questions from an investment standpoint, whether it's Burford or any other players, as with any industry, is that such high returns attract capital and drive the returns of the cost of capital. What's your view? Have you seen the return profile change over the last couple of years, and more specifically, for what types of cases, if we assume, for example, Burford and Fortress are at the top end, and the most commoditized cases are at the lower end?

{audio:0:22:04} If you were to do a statistical analysis, I think you'd find that the smaller cases would give you a better return. With capital plus two times your capital, I think on the smaller cases, you might see that, and Manolete, for instance, might have some interesting figures on that because they're listed. Because they're in insolvency, I'm afraid I'm not across the detail of what they're up to, but I think they would have an answer. The bigger case is I think there's a statistical analysis, and I think your returns are probably not as great. Below two would be my estimation.

{audio:0:22:47} It's down to duration and the amount of capital. IRR is only an investment-specific metric. If you ask a man on the street, they will say, what's the point in IRR? If you get someone to get their stocks and shares ISA, their stocks and shares ISA could actually be a negative value, so they’ve lost value, but still the IRR is positive, and to the ordinary person, that doesn't make sense. If you look at the straight-line saying, I'm down 2% and what I put in my pot makes sense. I think the way these things are measured is slightly misleading. I would accept that's probably me being simplistic and not a sophisticated professional financer.

{audio:0:23:37} Why would the smaller cases be higher returns if they're arguably easier?

{audio:0:23:44} It's only a higher return in terms of the metric. If you look at it in actual money, raw data, you're not getting as much money back, but you're not putting as much money at the door. If you were going for a $200 million state arbitration, you're probably looking at, I would say, at least five to seven years to get the money back. The longer it goes on, it's just that point of there's more opportunity for things not necessarily to go wrong but to be challenged. Budgets can increase, and therefore, not just your duration risk but your capital risk increases in terms of size.

{audio:0:24:29} So the IRR is higher but the absolute dollar return is higher for larger deals. The IRR can be statistically lower because it takes you 10 years to get the money.

{audio:0:24:37} Yes, but you might also spend more money to get the $200 million. For instance, you might win the arbitration after four years, and you might spend another four or five years trying to get the money back in. The Akhmedova case is probably interesting, and Harbour had a similar case in the public domain, which is the Kazakhstan Kagazy case. The broad similarity between those two cases is the enforcement aspect. You're going to come onto that later in the asset recovery, but that's what pushes those up. So you're not increasing the claim's actual value; your headline value has not increased unless you can recover it. You're saying maybe the pot's smaller, in terms of just writing you've got 200 million, maybe we’re going to get 150 back.

{audio:0:25:33} Doesn't that limit who can play in that world? Because unless you’ve got these good asset recovery teams, good luck trying to get money off these Russian oligarchs.

{audio:0:25:49} There's an art to it; there's definitely an art. 

{audio:0:25:52} How does that work? Let's say, for example, the YPF case, the Burford claim against the Argentina state, let's say that wins. Where do you start with this?

{audio:0:26:04} They’ll probably hope to leverage something through the New York bond market and look to effectively make the Argentinians want to pay it because it's too painful to do otherwise. In terms of seizing assets against a state, it's really tricky, because there's sovereign immunity protection. You're looking for embarrassment and the geophysical risk. When you start the arbitration or the process, there may be one administration in power making decisions, and by the time you get to it, maybe another. That can work one of two ways. It can either work in your favor in terms of they just want to settle it and move on, clean sheet, or they may say this has nothing to do with us, this is the old administration, we don't recognize it, which just makes your problem worse. That's why funders are wary about state arbitration; it's the recovery risk. It's really hard and expensive.

{audio:0:27:08} How are the asset recovery teams structured internally?

{audio:0:27:12} The short answer is, I don’t know. Burford is probably the only funder with a specific asset recovery team. We outsource it, and we would loan someone like me with the knowledge of the sorts of information we need. Harbour would be the same. My view is the first thing you look at in any case, the first question you want to know is, can the defendant pay, and will the defendant pay. You could have a £10 million claim, but if the defendant's only got £2 million worth of assets, it's not a good investment.

{audio:0:27:57} Who do you outsource it to?

{audio:0:28:01} You generally build a good network of investigators and intelligence specialists. I've worked in that world, and that's the network I fall back on. It's trickier for lawyers because lawyers are, inherently, risk averse, and with good reason. There are many examples where an investigator got it wrong just to go after the information, but with a laissez-faire attitude to whether it would stand up to scrutiny in court. There's no point in getting that information or intelligence if it can’t be adduced as evidence to withstand cross-examination. You’ll just blow your case up.

{audio:0:28:55} How do you look at the potential advantages of having it in-house instead of outsourcing the asset recovery?

{audio:0:29:03} One is it's your team, and that subdivides into trust and cost, so you know exactly what you're looking for. The third aspect is speed. Those are the advantages. I think the disadvantage is that when you look at something and think, well, this is good, they can almost get swept up into that. They can almost end up looking at it through the same lens. I would say that is a risk. Another aspect is if you have it in-house, you run the risk of conflict. Having anything like that internally gives you a potential for conflict at some point, commercially. You may have been looking at things for someone else and then find that another matter comes in, and you say, we can't act on that because we did this on something else. It can close down your opportunities to some degree. 

{audio:0:30:06} I think Burford acquired Focus Intelligence.

{audio:0:30:11} Yes, a while ago. That team got the success in that Akhmedova case, which was publicized. The Akhmedova case is interesting. I think it probably took longer. I think internally, there was, at various points, some concern as to will this come good. And it has; they've got their money back. Back to the point about IRR, I'm not sure what the IRR on that would be, and I can't remember how much money they put in, but I'm pretty sure it was more than they thought they would have done from the outset. 

{audio:0:30:52} How did they recover the assets in that case?

{audio:0:30:55} A lot was centered on the yacht. There was a yacht that put a lot of pressure on things. Where they did well there was getting it into the mainstream media, and it became something that people wanted to read about. The fact of how these high-value Russian divorces are being heard in the English courts and then what happens; they leveraged off that very well. They did a good job of that.

{audio:0:31:31} How much of the asset recovery piece do you do before investing the money versus during and after?

{audio:0:31:43} I would do a lot. I almost reverse engineer it. I would rather see an investigator's report saying, here are the assets. If there's any sense that the assets aren't clear to get at, like a bank account, you’d want to know what assets you could seek to recover from the defendant to satisfy your recovery. That is a question best answered by investigators rather than lawyers for three reasons. It's quicker, cheaper, and you'd rather use them than the lawyers because you want the lawyers to focus on the litigation stuff, not just running around. With the more sophisticated deployments, there will often be some sophisticated structuring in terms of how those assets are held. A lawyer will want to use a Norwich Pharmacal. You don't want that too soon because they know you're coming. 

{audio:0:32:55} It's almost more difficult to recover the assets than win the cases, in some of these instances.

{audio:0:33:02} I think that's right. It's an area that I find fascinating because, for me, you want to use funding for the achievement outcome, and the outcome is more money back than goes in. In that respect, claimant and funder are aligned very straightforwardly on a very simple basis. Where lawyers are on some form of contingency arrangement for their fees, they too are aligned. This is helpful because, of course, everyone's then focused, saying we're only going to get a full payday if we get back what we say we're owed. 

{audio:0:33:41} If you start there, you can then work back, saying, is the defendant good enough to pay the money? What’s the critical path to getting the treasure? Part of that may be the judgment, it may be that you have to do that and think about how you enforce it, but you need to get ahead of that problem, in my view, before you issue any form of claim anywhere in the world. Because you want to say this is what it looks like before anything happened, what it looks like afterward, what's the difference. 

{audio:0:34:14} Of course, if you've got a civil fraud, normally they’ll have gone from living in a very nice part of town to living in an Airbnb in a not so nice part of town comparatively speaking, and there will be a manifest difference in their lifestyle. That then begs the question of, how did you sustain that lifestyle? You'll go through the usual round of, I'm bankrupt now, borrowing off friends who are looking after me. Why has that all stopped? Some very simple questions fall out of it.

{audio:0:34:46} How do you typically pay the outsourced investigator for these services?

{audio:0:34:56} There are a number of ways. Some investigators may say, we'll do it on a 50% or something similar contingency due during court to get you funding. We'll have the other 50% as part of the funding package if you get funding. The client may pay that initial 50%. It may be that the client pays the whole lot themselves and just instructs the investigator to obtain an asset tracing report. Or maybe a funder does it as part of their due diligence, and any one of those can be wrapped into the funding package. 

{audio:0:35:35} The key thing I would say is the investigators I use need to be investigators that firstly, can stand up in court and be cross-examined should it come to that, at every point, and secondly, can work closely with the legal team throughout the whole life of the case. And the legal team needs to understand how to use investigators properly. It's not simply a case, for example, in disclosure going, all right, enough about this, can we just find out and investigate it. You need to have a continuous picture throughout the life of the case so that you can quickly identify the gaps and how you might work out those in your knowledge.

{audio:0:36:18} You don't just do a piece of recovery or recovery asset work out front and leave it there; you have to keep working on it throughout the case?

{audio:0:36:31} Yes; what it's starting at is what could ultimately be your enforcement picture. If you keep that going throughout the life of the case, it enables you to understand the minds of the defendants.

{audio:0:36:48} They could be moving stuff around, changing assets, moving assets.

{audio:0:36:50} All of that. And of course, with the advent of crypto – though obviously, that fell off a cliff last week – that's a highly mobile asset class. It’s virtually impossible to trace quickly. You can trace it eventually if you get good start points. If someone has decided that they don't want their assets found, it's easy for them to say, I don't have an online presence, and then use proxies. The only way to find those proxies and how they're accessed is through human intelligence, so figuring out who's in someone's network, how they meet them and piecing that together. That's my point about adducing the evidence and being able to stand up in court and say we got it this way, this is how we did it, it’s all perfectly legal, and this is what we saw. 

{audio:0:37:49} Do these recovery guys get a contingent fee if you recover the assets in some cases? Or is it mainly fee-based work?

{audio:0:37:59} To be honest, investigators are fairly straightforward people. They love their work, and it is fascinating. In straightforward terms, it's not as well paid as being a lawyer. Some will consider a contingency fee, and most will just want to be paid on the run. They're too busy doing what they're doing to think about the other piece. Increasingly, I believe they are thinking around a success-fee model pegged against amounts of recovery, which, to be honest, is only fair.

{audio:0:38:35} Do you think crypto is going to impact their recovery rates?

{audio:0:38:41} Short answer, I don't know, but if you push me to guess, I think the issue with crypto is how to convert it. So you get the crypto, and you convert it back. It's like any asset class at that point, and it's only as good as the market that you're going to convert it through. If the market is high, great; you could have done all right. If the market is depressed, it's not so good, so that's tricky. I think you'll see it increasingly used as defendants use it. As I say, it's highly mobile. If you remember the Bradley Birkenfeld case at UBS where he blew the whistle saying they were moving lots of money offshore with just bags of diamonds and stones, it’s a much more compact form of value.

{audio:0:39:35} What happens if you win the case and struggle to recover the assets?

{audio:0:39:43} Where you haven’t considered enforcement from the beginning?

{audio:0:39:45} Even if you have and you’ve miscalculated the enforcement capability?

{audio:0:39:53} The key question is very simple; where do you think you're going to get the money from, and if you can't do that, how do you create enough pressure that the other side just wants it and are willing to make a meaningful payment. In the circumstances where you've got the judgment, you've spent lots of money on getting that judgment. Let's say you spent five million. You may be looking at another five million if it's not a jurisdictional asset recovery just to get there, possibly more. If you look at the Akhmedova and other similar cases, I think you’ll find that if they’d spent 30 million getting something, I suspect 10 of that would have been spent on winning the trial, and 20 would have been spent on recoveries.

{audio:0:40:47} What could you spend 20 million on? Is that all investigators?

{audio:0:40:53} No, it's on multijurisdictional applications, it's on disclosure costs, third party disclosure orders, and attachment orders. You're probably going to end up making various applications in Cyprus; you will possibly end up making 1782 applications in the States; you’ll probably be in the Caribbean at some point; you may end up in Switzerland and France.

{audio:0:41:18} You’re just chasing these assets around, trying to find them?

{audio:0:41:22} Yes, and this is why I say you should get your intelligence picture from the beginning and keep it refreshed throughout. Though I've not seen it done yet – it's my working theory, and I'm willing to be proven wrong – I think you could halve that enforcement aspect to the budget if you did it that way and took a more task force approach to that litigation. With this hard sort of enforcement stuff, you're talking about civil fraud cases where it's fairly clear that someone will not want to pay. If they can't pay, that's a different process and a wicked problem. You’re not going to be able to magic that up from somewhere.

{audio:0:42:04} And the divorce cases are somewhat rare, aren’t they? They’re more public, not the everyday case for Burford or Harbour. Have you got an example in the past where you've struggled to recover the assets, and why was that?

{audio:0:42:24} Yes, there are a number of cases that I've seen. One has resolved that they've gotten to the point where they've got the assets, and now they need to dispose of them. That’s the other point. It's all well and good getting hold of a £30 million property in London. What's the market like for a £30 million property? If someone has decided to structure their asset holding in a certain way – protectively – there are good reasons why people want to do that, such as to maintain anonymity. But it's a very short step; it's the same modus to do that if you're going to do that for nefarious reasons and you don't want people to get at it. 

{audio:0:43:10} With very complex structuring through lots of offshore jurisdictions, you've got to join the dots for the courts so you can say yes, that is their asset, we can prove it's their asset, or you paint such a complex picture there's only one piece of the jigsaw missing. You invite the court to draw the inference whereby the only plausible explanation is those properties or those assets belong to the defendant. Therefore, because the defendant owes us this, those are now our assets, you can invite the court to give you ownership of them so you can dispose of them. All I've explained there is three to five years of work, probably.

{audio:0:44:03} How do you look at the duration of the case and how that’s changing?

{audio:0:44:12} I think people are getting wiser. Certainly, in the cases I've described, I think initially, people didn't think the enforcement would be such an issue. They saw it more like a straight line rather than a matrixed problem. By that, I mean you went to court, you got the judgment, they didn't pay, you enforced. Whereas what I'm suggesting, by matrix, you've got three or four workstreams, you've got litigation as the spine of the whole thing, you've got your intelligence line which is at the top, and at the middle, you've got a mixture of the two, which is what I call your influence stream. 

Burford Capital, Harbour Litigation, IRR's, & Asset Recovery

Former Director at Harbour Litigation Funding

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Burford Capital, Harbour Litigation, IRR's, & Asset Recovery(May 31, 2022)

Former Director at Harbour Litigation Funding

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