There are no plans to change the voluntary code for third-party litigation funding, according to one of its creators.
Professor Rachael Mulheron, a member of the Civil Justice Council, said the code was still appropriate one year on from its adoption.
Speaking at the Westminster Legal Policy Forum yesterday, she appeared to rule out statutory regulation of funders and instead placed trust in judges to uphold good behaviour and practice.
‘The code is working well and is fit for purpose for what we intended,’ she said. ‘It remains under review and judicial oversight is the sight for funding regulation in this country.’
Mulheron said membership of the code was a ‘badge of honour’ for those that adhered to it and made funders more attractive. She added that judges were ‘convinced’ that a voluntary code had a significant role to play so long as it was properly managed.
The code, released in November 2011, states that the funder will take reasonable steps to ensure that litigants receive independent advice and will not seek to influence the solicitor or barrister.
The funder must also maintain financial resources to meet its obligations to finance all the disputes it has agreed to fund.
At the same event, Mary Terzino, from the business lobbying group US Chamber Institute for Legal Reform, explained why her organisation was in favour of statutory regulation.
‘Funders are not concerned with justice but with profit,’ she said. ‘Less reputable players are already attracted to an industry where there are few barriers to entry.
‘It’s like saying you can’t have speed bumps for fear of preventing people buying cars – third-party funding deserves more thoughtful attention, more speed bumps and perhaps a few stop signs.’