New Environment in Litigation Funding

N E W S    R E L E A S E

Date: 9 February 2012

New Environment in Litigation Funding

Tips the Balance in Clients’ Favour

 

A flurry of recent activity in the UK Litigation Funding market has grabbed the headlines in the legal press, with new funders entering the market and the publication of a voluntary Code of Practice for UK Litigation Funders.

London-based Commercial Litigation Funding Limited (CLFL) has welcomed the recent Code as it will allow potential clients to select relevantly-accredited litigation funders most suitable to their needs.

CLFL’s MD, Ben HawkinsHawkins, explains: “The launch of the new voluntary conduct code is something that has been long overdue as it sets a new barrier for compliance that should have been in effect from the start. This offers potential clients simplicity and ease in selecting properly-qualified companies to work with, and which are right for their case.

“And that’s the point: the shift in environment that is demonstrated by the new market entrants will see the Code of Practice introduce a more competitive landscape. The emphasis of this new landscape will be finding the right funder rather than hoping to find any funder who is able and willing to get involved. The market is maturing and the client finally matters.”

Educating clients on how to select the right funder for their case will be the focus and this new Code gives a helpful start by including provisions to ensure funders not only have enough funding capital to cover liability but can only withdraw that funding from a case when absolutely necessary.

Ben continued: “A funder’s expertise in particular case types is of growing importance and clients should be aware of this when selecting which funders to approach. Those funders who review statistical case factors that can be used with confidence and rely on their experience to reach funding decisions are better placed to act in the client’s interests over those who simply look at the currently available facts of a case and judge whether it is worthwhile on that basis.”

Companies which have generated large investments in exchange for the promise of attractive returns cannot afford to leave those funds idle or use them in non-winning cases, so there is always an added pressure from investors to find those cases to support. . This pressure can then lead to micro-management of cases, making for a painful risk assessment process at a time when the main priority should be progress in the litigation itself.

Ben Hawkins comments: “Service levels must come to the fore. Litigation Funding is a challenging and complex process, but few funders are able to put this in the context of what it is: an important part of a bigger picture which is the litigation itself. Insurance-based litigation funders like us, who work on a portfolio approach, may succeed in differentiating themselves from competitors by being able to provide creative funding solutions for some cases where companies need funding quickly or are concerned about meeting investors’ unrealistic or unreasonable returns.

“In conclusion, we at CLFL welcome this new Code of Practice for UK Litigation Funders because it will not only encourage competition and motivate solicitors and clients, it will also empower them to make choices rather than opting out of the whole process due to their funders expecting to call the shots and, in some cases, matters costing far too much money.”

For those interested in learning more about litigation funding and taking advantage of CLFL’s consultation services, Ben Hawkins can be contacted on 020 3051 8645 or via email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it . Alternatively, visit www.litfunding.co.uk for more information.

 

 

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