Third-party lawsuit funding on the up – claim funders
Third-party funding of lawsuits is on the cusp of taking off in the UK – according to the funders themselves.
A survey released by one of the big players claims that 70 per cent of litigation partners at the country’s leading law firms reckon that clients are showing an increasing interest in turning to commercial funders.
Funding is highly controversial, not least with large corporations, with many in-house lawyers fearing that its increased availability will take the UK further down the road towards a US-style compensation culture. Others warn that funding could breach longstanding rules of champerty.
The survey – conducted by Therium, a funding business, and Just Costs Solicitors – purports to show an increasing appetite for the model. Nearly 80 per cent of litigation partners said they were aware of specific third-party funded cases within the last year.
Neil Purslow, Therium’s chief investment officer, said there had been a significant increase in third-party funding in litigation involving financial institutions, industrials, energy and natural resources. Purslow commented: “The ability to meet costs, risk management and accounting benefits are closely ranked as benefits.”