The Civil Justice Council (CJC) has launched revised proposals for regulating third party litigation funding
Its consultation paper, published last week, A Self-Regulatory Code for Third Party Funding, takes account of Jackson LJ’s recommendations, which were included in his review of civil litigation costs.
Jackson LJ recommended a voluntary code for all litigation funders with effective capital adequacy requirements and restrictions on funders’ ability to withdraw support for ongoing litigation.
He recommended revisiting the prospect of statutory regulation when the third party funding market expands, and ensuring that funders be potentially liable for the full amount of adverse costs, subject to the discretion of the judge.
The CJC code has been revised to include these recommendations.
Third party litigation funding is a small but emerging industry—according to the CJC, it has so far been used in no more than a hundred cases in England and Wales.
The CJC says the code and the association will help ensure that “the nascent litigation funding industry develops in a fair and responsible way, affording protection for consumers who wish to contract services in this market to fund their litigation”.
The CJC anticipates that the considerable majority, if not all customers in the funding market are “informed consumers” and will “have ready access to professional legal and financial advice”.
Responses to the six-week consultation are due in by Friday 3 September 2010.
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