A code of conduct for third-party funders of litigation has cleared its final hurdle and will be published later this month, the Gazette can report.

The voluntary code, drafted by a working party set up by the Civil Justice Council as a means of providing a badge of respectability to genuine litigation funders, received the green light last week after the CJC’s main board said it was ‘content’ for the code to be published.

Publication will represent the culmination of several years’ work in seeking to achieve a set of rules that can be agreed upon by funders, and which also address concerns raised by Lord Justice Jackson in his final report on civil justice. In particular, the CJC said that provisions to ensure that funders have enough money to invest in cases have been bolstered in the final version.

The code will also contain a ‘QC clause’ to ensure that where there is disagreement between, for example, a claimant and funder over whether to pull out of the litigation, a senior barrister will be drafted in resolve the issue.

It is understood that the final version of the code has met with widespread approval by third-party funders, with the main funders expected to sign up and become members of a new Association of Litigation Funders created by the code.

Organisations acting as brokers to the third-party funding industry but are not funders themselves will be able to become associate members.

The working group that drafted the code was chaired by Irwin Mitchell senior partner Michael Napier, supported by a committee including Rocco Pirozzolo, legal expenses underwriting manager at QBE; Leslie Perrin, chair of funder Calunius Capital; and Susan Dunn, head of litigation funding at Harbour Litigation Funding.

Pirozzolo said the development would prove ‘an important milestone’ for the funding market. ‘Funders will look forward to the association and the code forming the basis for the market to grow. If solicitors or their clients were not persuaded by the legitimacy of funding as an option to finance a case, then any such doubts should now be dispelled.’

The final code will be launched on 23 November. A full analysis of its provisions will appear in the December issue of Gazette sister publication Litigation Funding magazine.