News & Blog

Litigation Funding Market in the UK Reaches £2 billion

For the first time ever, the value of court cases and capital held by the top UK litigation funders has reached £2 billion, reports City AM. The litigation funding market in the UK has quadrupled since 2015. This data is based on research by British law firm RPC.

Geraldine Elliott, Partner at RPC, says “the growing amount of capital litigation funders now have to deploy means they are running out of more obvious cases to fund.  As a result, they are interested in kick starting cases from scratch. This can involve funders looking for a potential group action that they get off the ground, using heavy publicising of that case in order to gather more claimants.”

Elliot adds that, “[i]n order to satisfy that demand for cases, litigation funders and law firms are now looking at areas where large financial damages can be shown to have been caused by the wrongful actions of deep-pocketed corporates – such as price fixing by a cartel. For corporates who might face these claims, this is an innovation they need to bear in mind.”

The UK should be a lesson for the rest of Europe. As the EU Member States prepare to implement the new EU Directive on Representative (Collective) Actions, they would be wise to consider adding additional safeguards to their new collective action laws, in order to protect consumers and defendants from speculative lawsuits initiated by litigation funders, who have increasing resources and pressures to invest in cases to remain profitable. Recommended safeguards for TPLF include:

  • Member State courts should be empowered to verify the amounts actually delivered to consumers in every funded case.
  • Funders should not be able to control decisions of the case, such as which lawyers to use or when to settle.
  • Member States should require that the relevant funding entities be established within the EU.
  • Funders must be required to demonstrate to courts that they have access to sufficient funds to meet their obligations related to the case and are legally committed to see the case through.
  • Funders should be responsible for adverse costs if the case is lost.
Share on facebook
Facebook
Share on google
Google+
Share on twitter
Twitter
Share on linkedin
LinkedIn

More to explore:

Lawsuit Crowdfunding Raises Serious Concerns in the UK

Litigation crowdfunding has the potential to take the already serious ethical and practical problems with litigation funding and multiply them by injecting dozens – perhaps hundreds – of mystery investors in civil lawsuits. In the interest of consumers, decision makers must not allow this trend to continue unchecked.

Latest:

CATEGORIES:

Categories

This website uses cookies to ensure you get the best experience on our website. ​Read More