A report published by the Legal Services Board in May contained some interesting insights into the litigation funding industry.
The LSB commissioned Professor Rachael Mulheron KC (hon), professor of tort law and civil justice at Queen Mary University of London, to lead a research project assessing how litigation funding relates to the LSB’s regulatory objectives, which include promoting the public interest, the interests of consumers and access to justice.
The report identified 44 cases involving litigation funding between 2019 and 2024. It found that litigation funding has a role to play in helping parties to access the courts, providing a means to access justice for some individuals, SMEs and corporations who would otherwise be unable or unwilling to self-fund legal costs. However, according to the research, funders currently select only 3 – 5% of potential cases.
The report also noted that litigation funding has often been used in cases involving issues that affect a significant proportion of the population. These cases are often about broader consumer interests, and their results may influence consumer markets, as well as the development and enforcement of the rule of law.
In broader industry developments, the timing of the general election has meant that the Litigation Funding Agreements (Enforceability) Bill has now fallen by the wayside. This short bill, which had been on track to be passed this summer, would have put an end to the uncertainty over LFAs created by the Supreme Court’s ruling last July in the PACCAR case. From the perspective of funders and also the clients who rely on their investment to enforce their legal rights, the timing of the election was certainly unfortunate; and the funding industry is keen for the next government – whatever its political colours – to recognise the urgency of a legislative solution to the PACCAR problem.
Meanwhile the Civil Justice Council has begun its review of the funding sector, and I understand that it will publish a first paper, setting out the issues for consultation, sometime this summer.
June 27, 2024 by Rachel Rothwell
Insights
