The Role of Litigation Funding in Securing Access to Justice

16th February 2023

By providing claimants with the means to pursue a meritorious claim, often against defendants that are much larger and better resourced than they are, litigation funding has supporting access to justice and upholding the rule of law at its core.

Group and class actions provide an important route for large numbers of individual claimants who have suffered a similar loss to seek redress through the courts. The defendants are typically large and well-resourced corporates so, without funding such legal actions could not proceed. The availability of funding for these actions helps to ensure justice for all affected individuals and entities. For example, Therium funded a group of claimants following the Post Office scandal, which was one of the UK’s most egregious miscarriages of justice, with over 700 sub-postmasters prosecuted over a faulty computer system that had shown account shortages.  Following a hard-fought legal battle funded by Therium, substantive justice was achieved and the sub-postmasters wrongful criminal convictions were overturned. They also secured a public inquiry and ultimately compensation from the government for all affected sub-postmasters. This case highlights how litigation funding can provide access to justice for victims who lack the resources to seek redress from a state-owned company, which deployed its extensive resources in an attempt to defeat the claims made against it.

The Competition Appeal Tribunal was set up in the UK to allow both opt-in and opt-out claims to be brought against companies that have breached competition law. The tribunal made litigation funding compulsory, recognising the importance and necessity of funding in enabling access to justice.

As well as enabling access to justice, litigation funding plays an important role in upholding the rule of law by ensuring that bad actors can be held accountable and by deterring companies from breaking the law and breaching governance standards.

Litigation funding also strengthens the rule of law in jurisdictions where it is weak. Investor-state dispute settlements (ISDS) arbitrations are a way for foreign investors to resolve disputes where states have breached their treaty obligations. Funding this type of legal action helps to ensure that states are held accountable. This acts as a deterrent against bad governance and corruption and ensures that international law is upheld, particularly in regions of the world where the rule of law and governance are weak.

Therium also leverages its experience of investing in law in order to promote social justice. Therium Access, the industry’s first not-for-profit vehicle, provides funding by way of grants for claims, organisations and projects that promote access to justice for the most vulnerable and marginalised in society. Therium Access marks Therium’s wider commitment to the pursuit of justice and the rule of law. As the justice gap continues to widen, the work of these organisations is increasingly important. Funding from Therium allows them to continue to deliver key services that support social and legal justice.

Legal finance comes in many forms as the industry continues to grow and evolve, but ultimately, by promoting access to justice and helping to uphold the rule of law, litigation funding plays an often crucial role in supporting the functioning of our legal systems.