The Royal Court of Jersey has once again endorsed the legitimate role of litigation funding in bringing cases on the island.

In Barclays Wealth Trustees (Jersey) Limited v Equity Trust (Jersey) Limited and Equity Trust Services Limited, Equity Trust was the former trustee and manager of real property unit trusts that ran into financial difficulty in 2007. The case, which is being brought by the successor trustee and manager, Barclays Wealth, involves serious allegations of breach of trust and breach of fiduciary duty and is being funded by Harbour Litigation Funding.

Equity Trust asked the Royal Court to strike out the litigation because the claimants had the benefit of litigation funding. The Master of the Royal Court rejected the strike-out motion and ordered that it pay Barclays Wealth's costs.

The ruling follows an earlier Royal Court judgment in another matter funded by Harbour which had endorsed litigation funding in Jersey (in the Re: Valetta Trust in December 2011).

In a statement today, Harbour pointed out that the earlier judgment was handed down in the context of a trustee directions application and so was not the subject of full adversarial argument. The significance of the new judgment, it added, is that the application was contested and the Royal Court had the benefit of full adversarial argument. Mourant Ozannes advocate and partner, Justin Harvey-Hills, appeared as counsel for Barclays Wealth. Marcus Pallot of Carey Olsen appeared for Equity Trust.

In his judgment, the master referred with approval to the Valetta Trust case where the court concluded: ‘[Harbour’s funding agreement] cannot be said in any way to corrupt the purity of justice. On the contrary, it facilitates access by plaintiffs who would otherwise be unable to bring the proceedings because of a lack of resources.

'Importantly, the agreement provides that control of the proceedings will remain with the plaintiffs and their lawyers; the sole right of Harbour will be to be kept informed... All in all, far from this agreement being contrary to the purity of justice, it fulfils the important role of facilitating access to justice without endangering the purity of that process.’

Susan Dunn, Harbour’s head of litigation funding said today: ‘We are delighted with this outcome. The Royal Court reached its conclusion having heard representations from both parties about funding and quite rightly, in our view, concluded that the fact a case benefits from litigation funding cannot be a basis for a defendant getting out of its potential liability. It would be an odd outcome indeed if defendants facing funded claimant with good claims were absolved on that basis alone.’

Brett Carron, Harbour’s chief executive, said: ‘The court’s decision confirms our core belief – that claimants with good claims have a right to pursue those claims and wealthy defendants do not have a monopoly on justice. Responsible funders, like Harbour, have an important role to play in litigation.’