By Tom Callaghan, Director of Partnerships at Legal Futures Associate Sentry Funding
The Civil Justice Council’s review of litigation funding could see big changes across the industry.
This article looks at some of the key points that the two funding industry bodies – the Association of Litigation Funders (ALF) and the International Legal Finance Association (ILFA) – have been making in their joint submission to the review.
The first point is to highlight the critical role that litigation funding plays in access to justice. It provides the only available route of redress for many claimants, including consumers and SMEs. And for other businesses, it helps them to avoid tying up budgets for litigation costs, so that they can use their capital to grow their core business and create jobs instead.
ALF and ILFA also point out that litigation funding works well in England and Wales. As well as providing access to justice, it promotes equality of arms between parties. Funding also brings other benefits, such as promoting the public interest through exposing corporate wrongdoing, driving good litigation behaviour, and supporting the development of English jurisprudence.
The two bodies point out that commonly stated criticisms that litigation funding supports frivolous or vexatious claims are not supported by evidence; in fact, the evidence is that funders are highly selective in the cases they fund, providing a reality check that benefits parties beyond the funded client, and helping direct resources towards meritorious claims.
And as well as enabling access to justice, ALF and ILFA point out that litigation funding has developed into a crucial pillar that supports the UK’s leading global role as a legal and financial centre. They urge that to ensure this continues, urgent legislation is needed to address the uncertainty caused by the PACCAR ruling.
The two bodies also argue that without evidence of harm that needs to be addressed, and given the detriment that extra regulatory burdens would cause, the current self-regulatory approach strikes the right balance. But they accept that it will continue to evolve by, for example, potential updates to the ALF code of conduct in consultation with the CJC.
These are just some of the key points made by ALF and ILFA in their submission to the CJC review. The Council’s final report is due to be published this summer.
