Here, we’ll look closely at how litigation funding works and the current legal position of both funders and claimants who benefit from these funds.
What is litigation funding?
Individuals or companies involved in a legal dispute may not have the resources to ensure they have access to justice in England and Wales. This is clearly not a satisfactory position, but there is a solution. Litigation funding is available from third parties who have no direct interest in the action.
The funder will have agreed a share of the damages if the case is successful, but they run the risk of losing their contribution to costs if they are on the losing side. Naturally, litigation funders will rely on the original counsel’s opinion on the potential success of the matter.
If you feel you are in need of this kind of funding, you can search online for sites such as //www.novo-modo.co.uk/litigation-funding.
Are there any current obstacles to acquiring this kind of help?
In July 2023, the Supreme Court ruled in a matter which has become known as the PACCAR case. This majority decision ruled that litigation funding agreements meaning funders could recoup their investment from damages were, in fact, damages-based agreements and are subsequently subject to the regulations relating to the latter.
Although the PACCAR case involved an opt-out collective procedure before the Competition Appeal Tribunal, the Supreme Court decision affects all funders expecting to recover their investment from the level of damages recovered.
How do you find litigation funding?
You will discover that the number of firms offering litigation funding is growing, to ensure that litigants have access to justice despite the financial constraints they are under.
One issue to address is to ensure the litigation funder has the cash needed to pursue your case and that they do not solely rely on other third parties to raise the funds for the legal process. It is also advisable to check that they have access to law firms who can take your case forward.
We trust this helps if you are seeking litigation funding.
