Review of Third-Party Litigation Funding Market: A Chance for UK Leadership

The future of third-party litigation funding in the UK is under scrutiny as the Civil Justice Council (CJC) prepares to conduct a review of the sector. The Lord Chancellor, Alex Chalk, has requested the review, with a preliminary report expected this summer and a final report a year later.

Former Lord Chief Justice Lord Thomas of Cwmgiedd has cautioned against relying solely on regulation to address the challenges facing the third-party litigation funding market. He suggested that alternative approaches, such as codes of conduct or voluntary agreements, may be more effective in ensuring fair outcomes for claimants.

Lord Thomas emphasized the opportunity for the UK to demonstrate leadership in the legal field through thoughtful and innovative solutions to the issues facing third-party litigation funding. He praised the Lord Chancellor for his proactive approach to addressing these challenges.

Conservative peer Lord Hodgson echoed the need for transparency and accountability in the funding process, highlighting the importance of ensuring that plaintiffs are informed about the distribution of proceeds and costs. He also raised concerns about the potential influence of unknown funders, calling for measures to disclose beneficial ownership to prevent foreign entities from disrupting UK companies through litigation.

The review will delve into the practical details of third-party litigation funding, examining the implications of grouping claims together and the potential conflicts of interest between funders and plaintiffs. It will also consider the work being done by the European Law Institute on the principles governing third-party funding, led by High Court judge Dame Sara Cockerill.

As the UK navigates the complexities of third-party litigation funding, stakeholders are hopeful that the review will pave the way for a more transparent, fair, and efficient system that upholds the principles of access to justice and accountability.