Burford’s asset tracing business is built on a highly specialized research team that delivers actionable intelligence to help progress legal cases and help recover assets. (While the image of the grizzled private investigator in a trench coat tracking down recalcitrant debtors is certainly alluring, it is wholly unrealistic.)
Below we’ve answered the most frequently asked questions about our asset tracing capabilities.
How much will it cost and how long will it take to enforce a judgment or retrieve a judgment debt?
Frustratingly, the cost and timing of judgment debt enforcement depend on the client, judgment debtor and jurisdictions involved, among other considerations.
Broadly, we only invest in recoveries where the size of the debt in question is $20 million or more. This is because the probability increases that a debtor is more likely to have an international footprint, which means there is greater opportunity to enforce in friendly jurisdictions. However, it also means this kind of significant debtor is going to be more recalcitrant than others, thereby increasing potential time and cost. As you can imagine, once the debt gets into the hundreds of millions of dollars, it obviously increases the likelihood that any recovery will take longer and be more expensive than a smaller debt.
Furthermore, the amount the client wishes to recover also impacts the recovery timing and costs. Burford often advises clients to take a commercial view of their judgment debt and evaluate the risk-reward profile. For example, if a client is chasing a $50 million judgment or award and is ready to settle for $10 million, that will likely be a relatively swift process, whereas if the client won’t settle for less than $40 million, it will be a longer and more expensive process.
Can Burford search for bank accounts?
Yes, but not in the way people imagine. Everything we do must be suitable for use in courts around the world. One of the strategies we use on every matter when searching for bank accounts is gathering niche bits of legal discovery in multiple jurisdictions. It is important to remember that there is a difference between where assets sit and where information sits, and often bank account data exists in references in jurisdictions unconnected to where the debtor lives or even where the bank account in question may be. If the judgment debtor has a bank account in an offshore haven, it is common that the information about that bank account will sit in a different jurisdiction. Burford’s job is to map out the debtors’ asset profile, proxies and nominees, to ensure that any intelligence it develops can be used as evidence in international litigation.
What is Burford’s pricing and would you buy my judgment debt?
Yes, Burford may be able to buy your judgment debt, but pricing varies based on the risk of enforcement and collection, not just the face value of the debt itself. There is no ‘one size fits all’ formula we apply. Instead, Burford is keen to provide a solution that addresses the needs of each client and the challenges it is facing. For example, if an outright purchase isn’t the best solution, Burford may provide some upfront capital as well as capital and expertise to enforce against the judgment. In that instance, Burford structures its deals to provide its potential recovery on a multiple of what is spent, a percentage of what is recovered or some combination of those components. We strive to be flexible in pricing because ultimately, we want to focus our efforts on pursuing the judgment debtor.
Does it matter if I already have a judgment?
As long as a debt is undisputed, it may not matter whether a final judgment has been entered. That said, in a typical commercial dispute, having a fully contested judgment is important, especially when seeking to have the judgment recognized in different jurisdictions. Often, clients come to Burford confident in their default judgment in jurisdiction X, only to learn that the default judgment from their local court won’t be all that helpful if trying to go after assets in jurisdiction Y. The bottom line: Depending on the nature of the dispute, a judgment may be helpful, but it is not necessarily crucial to have at the outset.
How do you deal with judgment debtors in unfriendly or opaque jurisdictions like Russia and China?
There is a crucial distinction between assets' physical location and their legal location. The view Burford takes from the outset is: If a debtor owes a relatively small debt, say $1 million, it’s quite conceivable that its assets exist in its home jurisdiction, posing recovery challenges in jurisdictions like China or Russia. But a debtor with north of $20 million in debt is much more likely to have geographically dispersed assets, incentivized by domestic tax and other issues. Also, judgment debtors with this profile often have international assets such as yachts, jets, properties and offshore accounts. With an international profile, there is more opportunity to restrain and recover assets.
When dealing with hostile or opaque jurisdictions, Burford attempts to find a non-hostile solution to get debtors to settle. Often the key to successful collection is not necessarily enforcing against a single bank account or asset but developing a multi-prong strategy that likely involves investigation and proceedings in multiple jurisdictions to gain leverage and incentivize the debtor settle.
Our expertise isn’t just in finding a bank account—it’s in understanding how bad guys think, how they hide assets, and how to bring them to the table. So, how do we deal with debtors in places like Russia, China, etc.? We find a non-Russian, non-Chinese solution: i.e. we find and restrain their assets in international locations.