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Litigation Funding - Underwriting your day in court |
A recent decision in the High Court has legitimised the litigation funding industry. |
Litigation funding is the funding of legal costs by a person not a party to the case and who has no direct interest in its outcome. |
The seminal case concerned claims for the recover y of amounts paid by tobacco retailers to tobacco wholesalers. |
The proceedings were instigated by a litigation funder who was prepared to underwrite the litigation (and meet any costs order against those bringing the case) in exchange for one-third of any amount recovered, plus the benefit of any costs order. |
There were a number of different proceedings, but in each case individual retailers made a claim against a wholesaler. |
However, the summons filed in each proceeding said that the proceeding was brought on behalf of other tobacco retailers who had purchased tobacco from the wholesaler during the relevant period, had not recovered any licence fees and had decided to opt-in to the proceedings by accepting the litigation funder's terms. |
Funders are now emerging who support general commercial litigation with no interest other than the potential for a commercial return on investment. They usually agree to fund an action in exchange for a proportion of any amount recovered plus any costs order. A whole new industry is emerging. |
