The landscape of legal financing in the UK has evolved significantly over the past decade, with litigation funding emerging as a crucial tool in ensuring access to justice. But what exactly is litigation funding, and why has it become such an important part of our legal system?
What is Litigation Funding?
At its core, litigation funding (also known as legal financing or third-party funding) is where a third party agrees to finance all or part of the legal costs of a claim in return for a share of the proceeds if the case is successful. If the case is unsuccessful, the funder loses their investment and typically pays the defendant’s costs.
The Purpose and Benefits
Access to Justice
The primary purpose of litigation funding is democratizing access to justice. Many legitimate claims never make it to court simply because potential claimants can’t afford the significant costs of litigation. Funding bridges this gap, allowing cases to be pursued based on merit rather than financial means.
Risk Management
For businesses and individuals, litigation funding offers a way to manage the financial risks of legal proceedings. Instead of tying up valuable capital in lengthy legal battles, they can pursue claims while maintaining their cash flow and operating capital.
Quality Control
Funders conduct thorough due diligence before investing in cases, effectively providing an additional layer of scrutiny. This helps filter out weaker cases and ensures that only claims with real merit proceed to court.
Key Applications
- Commercial Disputes
- Group Actions
- Insolvency Cases
- International Arbitration
- Professional Negligence Claims
- Competition Law Cases
The Current Landscape
The UK litigation funding market has matured significantly, with established funders now managing substantial portfolios of cases. The industry is largely self-regulated through the Association of Litigation Funders (ALF), which maintains standards of practice and a code of conduct for its members.
How Taborns Can Support You
At Taborns, we understand that navigating litigation funding options can be complex. Our dedicated team works closely with established funders and has extensive experience in securing appropriate funding arrangements for our clients. We can help assess your case’s suitability for funding, connect you with reputable funders, and guide you through the entire process.
Our expertise includes:
- Initial case assessment for funding viability
- Connecting clients with suitable funders from our trusted network
- Structuring funding arrangements that protect our clients’ interests
- Managing the relationship between client and funder throughout the litigation
- Ensuring transparency in funding terms and costs
Looking Forward
As legal costs continue to rise and access to justice remains a concern, litigation funding’s role is likely to grow further. We’re seeing increased innovation in funding structures and a wider range of cases being considered for funding. At Taborns, we stay at the forefront of these developments to ensure our clients have access to the most appropriate funding solutions for their needs.
If you’re considering litigation and want to explore funding options, our team is here to help. We can assess your case and guide you through the funding process, ensuring you have the resources needed to pursue your claim effectively. Get in touch today.