Litigation Funding 2022- your global guide to the law and practice of funding in 23 key jurisdictions.

Woodsford is proud that the 6th edition of Litigation Funding, published by Lexology and edited by our very own Steven Friel and Jonathan Barnes is available to download.

The guide covers the law and practice of litigation finance in 22 jurisdictions and international arbitration and is an invaluable tool for anybody using or considering funding in any of the jurisdictions covered.

As evidenced by new chapters from India, Japan, Luxembourg, Spain and Sweden, the global business of litigation funding continues to develop and grow.

While the federal government in Australia has continued in its efforts to increase the regulatory and other burdens on litigation funders, in what many consider to be an attack on access to justice, elsewhere the growth of litigation funding continues to be widely encouraged.

In September 2020, the Commercial Court of the British Virgin Islands approved a litigation funding agreement, in the first written judgment of its kind in the BVI (In the Matter of Exential Investments Inc (In Liquidation) and In the Matter of the Insolvency Act, 2003). The Commercial Court had previously sanctioned the use of third-party litigation funding, but no written judgments confirming the Court had this power had been recorded in the jurisdiction. The court stated that ‘without the funding, the liquidators would be unable to obtain recoveries for the benefit of the creditors of the company’ and that ‘approving the funding arrangement is in the current case essential to ensure access to justice’.

There were similar developments in the Cayman Islands, which provided welcome clarity around the permissibility of litigation funding in that jurisdiction. The Private Funding of Legal Services Act 2020 was gazetted on 7 January 2021 and is set to revolutionise the litigation funding environment in the Cayman Islands. While litigation funding is not entirely new to the Cayman Islands, the Act is an important develop- ment which brings the Cayman Islands into line with other jurisdictions that have embraced litigation funding more widely and enjoyed the benefits of an active litigation funding market.

There were further pro-access to justice decisions from the English courts, including that in DAF v The Road Haulage Association and UK Trucks Claims Limited [2021] EWCA Civ 299. The Court of Appeal unequivocally confirmed that litigation funding agreements cannot be labelled ‘damages-based agreements’ and are permitted, indeed neces- sary, in the opt-out, collective action regime in the Competition Appeal Tribunal. The judgment is another welcome example of the most senior courts of England and Wales acknowledging that:

Third party litigation funding is now a substantial industry which, although driven by commercial motives, is widely acknowledged to play a valuable role in furthering access to justice.

In late June 2021, the Singapore Ministry of Law announced that its third-party funding framework would be extended to cover certain proceedings in the Singapore International Commercial Court (SICC), domestic arbitration proceedings and related mediation proceedings. As the Ministry stated:

“This offers businesses an alternative avenue to fund meritorious claims and further strengthens Singapore’s position as an inter- national commercial dispute resolution hub.”

Singapore was the first major Asian jurisdiction to actively embrace third-party funding when it introduced a framework for the funding of international arbitration proceedings and related court and mediation proceedings in 2017. Unsurprisingly, the Ministry stated:

“Funders and the business, legal and arbitration communities … responded positively … and businesses have shown increasing interest in additional options for financing litigation.”

A pair of decisions from Delaware provide further comfort that litigation funders and their counterparties can engage in thorough discussions about a potential litigation without fear of discovery in the district. In United Access Techs, LLC v AT&T Corp, No. CV 11-338-LPS, 2020 WL 3128269, *1 (D Del June 12, 2020), defendants had sought production of communications between plaintiff and potential litigation funders. The court held that the defendants were required, but failed, to demonstrate that the requested documents were relevant to the claims and defences of that specific case. In a second case, ELM 3DS Innovations LLC v Samsung Elecs Co, Case No. 14-1430-LPS, Dkt No. 372 (D Del Nov 19, 2020), defendants sought production of litigation funding agreements, and both pre-suit and post-suit communications with funders. The court denied the motion, finding that litigation funding agreements are not relevant to patent litigation disputes for the purposes of discovery, and that funding communications are protected work product. The court indicated that it would have rejected any argument that work product protection was waived by disclosure of the documents to a third party.

As Hon Shira A Scheindlin, a former federal judge of the US District Court for the Southern District of New York, stated in a keynote address at an industry conference in New York in September 2021:

“Those who seek to restrict third party litigation funding or to cabin its effectiveness with burdensome and unnecessary regulation are, in my opinion, merely afraid of the level playing field that such funding creates. I do not think they will succeed. Litigation funding is now an accepted part of the litigation landscape and is here to stay – and that is a very good thing.”

As ever, we are grateful to all of the chapter authors, each of them experts in their particular jurisdiction, for their contributions.

You can download the entire guide here.