The Civil Justice Council has launched revised proposals for regulating third party litigation funding
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 Lord Justice Jackson’s recommendations, which were included in his review of civil litigation costs.
Lord Justice Jackson recommended a voluntary code for all litigation funders with effective capital adequacy requirements and restrictions on funders’ ability to withdraw support for ongoing litigation. His review 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, which was published in draft form in July 2008, has been revised to include these recommendations.
The CJC has also published a draft constitution for an Association of Litigation Funders, which would oversee the code.
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 purpose of the code and the association is “to 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. It is anticipated that the considerable majority, if not all early customers in this market are informed consumers, mostly commercial organisations with ready access to professional legal and financial advice”.
Responses to the six-week consultation are due in by 3 September 2010.
