The world’s largest litigation financier wasted no time responding to Capitol Hill’s surprise tax gambit. Hours after the Senate draft dropped, Burford Capital issued a statement warning that taxing funding profits at ordinary rates would “make it more expensive for businesses to secure litigation financing” and could stall innovation.
Burford Capital notes that the House version of the reconciliation bill omits any mention of litigation finance and stresses that reconciliation rules limit unrelated revenue raisers, foreshadowing a procedural challenge. The firm also highlights the draft’s retroactivity, arguing that investors priced cases under existing tax assumptions and could face punitive clawbacks if rules change midstream.
Market reaction was swift: Burford’s London-listed shares dipped 3 percent before recovering as analysts handicapped the bill’s prospects. Rival funders privately debate strategy—some push for a technical carve-out, others want the clause scrapped entirely. Defense counsel predict a burst of settlement offers aimed at closing cases before any rate hike can bite.
Burford’s rapid intervention shows the industry cannot afford silence while its business model is rewritten. Expect funders to beef up government-relations teams, demand wider tax indemnities from claimholders, and explore non-U.S. opportunities should Washington decide their profits look more like wages than capital gains.
