Statement Re US Budget Reconciliation Bill

Burford Capital Limited ("Burford"), the leading global finance and asset management firm focused on law, today issues the following statement in connection with proposed tax provisions relating to litigation finance included within the US Senate's draft of the budget reconciliation bill as released late yesterday.

As has been widely reported, the US Congress is wrestling with a wide-ranging budget reconciliation process - "the One Big Beautiful Bill". The US House of Representatives has passed one version of a bill, totaling more than 1,000 pages. The US Senate released the proposed text of the tax-related provisions of its version late yesterday, which has not yet been reviewed for compliance with the Senate's reconciliation procedure nor been subject to a vote. The tax provisions alone in the proposed Senate bill run to 549 pages; the entire Senate version of the bill is similarly over 1,000 pages.

The House version of the bill as passed makes no reference to litigation finance, while the Senate draft version includes a provision that aims to increase the statutory tax rate on litigation finance transactions. The provision's language is not sufficiently precise to enable Burford to assess its potential impact were it to be enacted in its current form, which would then need further interpretation from the US Internal Revenue Service. Given that the House and Senate bills are very different, if the Senate bill passes in its current form, the two bills will require extensive negotiation in a conference process between the House and the Senate to reach a single agreed bill (if such agreement is possible), and then both the House and Senate will need to vote again on the revised bill. Each step of the process involves political uncertainty about the contents of the final bill, if any. There has been extensive public reporting about the narrow margins associated with the ultimate passage of this bill and all that is clear today is that nothing is close to certain and it would be premature to predict any particular outcome.

Commercial legal finance levels the playing field for businesses, providing capital to pursue meritorious claims. Litigation finance allows businesses of all sizes to invest in economic development, innovation, and job creation in local communities, rather than expend limited resources on litigation. We are hopeful, as this labyrinthine process continues, that the US Congress will not set back the business growth and innovation that is fostered by the availability of our capital by making it more expensive for businesses to secure litigation financing.