LITIGATION FUNDING: CJC to investigate emerging market


The Civil Justice Council (CJC) will next month hold a summit to investigate whether the emerging third-party litigation funding market should be regulated, the Gazette can reveal.



There has been an explosion of interest in third-party funding: Germany's Allianz ProzessFinanz opened an office in London last month; Harbour Litigation Funding has just been launched, headed by Susan Dunn, formerly of UK pioneers IM Litigation Funding; accountants Smith & Williamson are offering litigation funding; and Calunius Capital has been authorised by the Financial Services Authority (FSA) to arrange funding on the capital markets.



CJC chief executive Robert Musgrove told the Gazette that the event will discuss minimum standards for commercial funders, and whether a form of self-regulation will be effective. Key players in the market, as well as the senior judiciary, FSA and Solicitors Regulation Authority have been invited.



In a report earlier this year, the CJC recommended to the government that properly regulated third-party funding should be recognised as an acceptable option for mainstream litigation. It said rules of court should also be developed to ensure effective controls over the conduct of litigation where third parties provide the funding.



'If this is going to be an effective market and improve access to justice, it will need proper quality standards from the start,' said Mr Musgrove. Protecting defendants from unmeritorious litigation will also be important.



Issues to be addressed include the degree of control the funder should have over the litigation and the oversight role of the courts.

l The Gazette's sister publication, Litigation Funding, is investigating the third-party funding market in its December issue, published later this month. Call 020 7841 5523.



Neil Rose