England: Calls for regulation of litigation funding
Four out of every five London litigators are now engaged in cases where at least one party is supported by litigation funding, a survey has found.
Furthermore, 90 per cent of litigators believe it is time to regulate the third-party finance sector.
These are the findings of the latest litigation trends survey, undertaken by the London Solicitors Litigation Association. Nicholas Heaton, the association’s president and head of competition litigation at Hogan Lovells, detailed the findings during the association’s annual dinner at the Law Society.
Contrary to last year’s prediction, in which 60 per cent of respondents anticipated an increase in litigation, the actual growth experienced by litigators over the past year was 50 per cent. Meanwhile, only 14 per cent reported a decline in their caseload.
Looking ahead, 60 per cent of litigators foresee growth in the next two years, a scenario Mr Heaton described as “encouraging but not a boom”.
He added: “A staggering 79 per cent of respondents have some cases in which one or more parties are using litigation funding. Given this, one might think that the judgment of the Supreme Court in the PACCAR case, making some of those arrangements unenforceable, would be a major concern. However only about 10 per cent of respondents foresee a reduction in the availability of funding or increase in its cost as a result.
“Eighty-eight percent did think however that further regulation of some kind was required for litigation funding.”
Leading costs lawyer Jim Diamond said: “I welcome the result of this survey which underlines the urgent need for regulation of litigation funding. The recent Horizon scandal saw wrongly convicted sub-postmasters awarded £57.5 million in compensation but after the litigation funders took their fees and costs only £10 million remained for distribution among 550 litigants.
“It is completely outrageous. Scotland is not exempt from the need for urgent and comprehensive regulation of the activities of litigation funders.”