Litigation funding has grown exponentially in markets across the world. While many litigation firms were only established around 2009/2010, this burgeoning industry has grown in leaps and bounds with markets forming in the USA, Canada, Australia and parts of Asia. But what does the future hold for litigation funding in a post-COVID world? We’re going to take a brief look at how litigation funding and arbitration could become more dominant in litigation.
A Brief History of Litigation Funding.
To understand where litigation funding will go, we need to understand where it began. The roots of this practice can be traced back to the 1967 Criminal Law Act, a change in regulation that changed Maintenance or Champerty offences in public policy as neither tort nor crimes. While a step in the right direction, the act did not make it easy to pursue such claims due to the opaque nature of the act.
This wouldn’t change until the 1990s when a series of laws abolished Maintenance and Champerty as torts. This opened the door for middle-income individuals who could not seek legal aid to pursue funding. It also enabled lawyers to turn this business into a more profitable model where they could receive success fees as well as their regular rates.
However, despite this, the litigation funding industry only really took off in the 2000s with the rise of major firms. Since then, the litigation funding market has grown significantly with markets in the US, the UK, and Australia potentially worth hundreds of millions and even billions of dollars.
Before the outbreak of COVID-19 and the subsequent lockdown, Ed Truant of Slingshot Capital estimated, in the Litigation Finance Journal; that the implied annual commitments across Australia, the UK, and the USA were worth AUS$ 333M, £667M, and US £3.3B respectively. This looks set to rise as many turn to settlements and arbitration to settle disputes.
A Backup of Court Dates
Even with the growth in this market, the backlog of court dates stemming from the lockdown measures we’ve experienced over the past year may mean more people turn to settle disputes through arbitration. Arbitration is often the preferred method of settling disputes as the issue is often kept private and settled without the need for expensive, time-consuming full trials.
Arbitration is also easier to manage remotely as all it requires are the parties involved and an arbiter. Logistically, this makes arranging meetings with parties and their legal counsel easier and thus quicker to resolve. As a leading name within the industry, we have seen the trends of this industry first hand. Therium prides itself on providing an incredible level of service, insight, and success that supports claimants and rewards investors.
A Shift in Settlements
The end of lockdown will also affect the amounts a settlement may return. With courtrooms shut for large parts of the year, claimants and defendants who don’t have the financial muscle to weather the storm may revise their expectations and change the settlement. This means that ongoing cases that have come to an impasse may be dislodged by the lockdown and parties may be open to changing their negotiating positions.
Therium Litigation Funding
At Therium, we have developed our litigation models to provide specialised litigation finance designed to assist in cases around the world. We work across all sectors and have clients from all walks of life including companies, institutions, private individuals and groups, law firms, barristers, accountants, patent attorneys, trustees, public bodies, and charities.
We provide clients with access to litigation and arbitration expertise. We are active in 5 continents and have to date funded claims valued at $36bn. We provide litigation finance in all forms, arbitration funding and single case litigation. Contact us now to find out more about our litigation funding process or sign up to The Brief to stay up to date with the latest in litigation finance.