Your guide to the law and practice of litigation funding in England & Wales

The 5th edition of Litigation Funding, published by Lexology has recently been updated.

Third-party litigation funding is permitted and endorsed by the judiciary and policymakers as a tool of access to justice. Consistent with modern public policy, English courts have a generally positive attitude to third- party funding.

The Competition Appeal Tribunal recently described third-party liti- gation funding as ‘a well-recognised feature of modern litigation’ that ‘facilitates access to justice for those who otherwise may be unable to afford it’ (UK Trucks Claim Limited v Fiat Chrysler Automobiles NV and Others and Road Haulage Association Limited v Man SE and Others [2019] CAT 26). The tribunal’s view underlines how far the law has changed since the days when funding another party’s litigation could constitute both a crime and a tort.

The historic, and long-abandoned, prohibition of third-party litiga- tion funding was rooted in the ancient concepts of maintenance and champerty. Maintenance is third-party support of another’s litigation. Champerty is a form of maintenance in which the third party supports the litigation in return for a share of the proceeds.

At the start of the twentieth century, maintenance and champerty were both crimes and torts. Following the Second World War, the law on funding civil litigation changed dramatically. The introduction of legal aid in 1950 created a state-funded exception to the historic prohi- bition on litigation funding. Further exceptions came with the growth of insurance and trade union-funded litigation. The Criminal Law Act 1967 abolished the crimes and torts of maintenance and champerty. While those principles continue to exist in the public policy relating to litigation funding, their scope has been much reduced, and they apply nowadays largely to discourage funders from exerting undue control over the litigation that they fund. ‘No win, no fee’ arrangements between litigants and lawyers (in effect, another form of litigation funding) were introduced in the early 1990s and substantially liber- alised in 2000.

The guide covers the law and practice of litigation finance in 18 key jurisdictions and international arbitration and is an invaluable tool for anybody using or considering funding in any of the jurisdictions covered.

You can download the updated chapter covering England and Wales here.